February 3, 1900'.
RECORD AND GUIDE.
189
ESTABUSHED-^ SARPHSlsi^ 1S58,
"DeAteD P Rea,l Estwe . Bui LOTffc AR.cKiTEeTUR,E .KotJSEKou) Desqi;atioiI.
Bi/si^/ESS Alto Themes of GEjto^l WiERfsi.^.
PRICE PER YEAR IN ADVANCE SIX DOLLARS.
I'libliKhed every Sat-arday.
TELErilO.NE, COItTLAKDT 1370.
Communications should be addressed to
C. W. SWEET, li-16 Vesey Street.
/. T. LINDSEY, Business Manager.
•Eiuercd at IhB Fost-Ogiie al Neio Yoric, N. Y.. as second-class muller."
other states. It is right to point out that any money coming from
without the borders of the Slate does so because the opportu¬
nities for investment are betier and the return higher nere than
it can obtain at home, and to the extent that the half of one per
cent, neutralizes these attractions, such money wiil be driven
back to the place whence it came. That the policy has hitherto
been to encourage toreign capital to come here is shown by its
exemption from liability to taxation as personalty. This policy
the Stranahan bill will set aside entirely because not only does
it place a tax upon foreign capital, hut it conveys no guarantee
that the moderate tax new prcposed may not be larger in an¬
other year, so that if any foreign, money is placed here on mort-,
gage subject to a tax it will be with a reservation of the right o£
prompt withdrawal should any further change of the conditions
give such investments a disadvantage, eilher of position or re¬
turn, iu our markets, which they would avoid elsewhere.
Vol. LXV.
FEBRUARY 3, 1900.
No. 1065.
The [iv-lcjo to VolnmeLXLVofthe Record and Guide, covering
the pBrh:l between Jidij 1st and December 'ilst, lbyS», mil be
read-j for dcUvsry on Taesdai) next. I'riee, t|<l. This
Tndex in its enlarged form Is now recoonized as indispensable to
evenj one oijarjerl or interested in real estate and huildin'j opera¬
tions. It covers all transactions—deeds, morlgages, leases, auction
sales, hdldinrj plans filed, etc. Orders for tke Index should be sent
at once to the office of liubUeation, X4 and 16 Vesey Street.
IT did not take long to test the accuracy of our last week's
statement that the stock market would relieve itself of the
influences of British reverses in South Africa. A day or two and
prices advanced while the story of the attack and repulse on
Epion Kop was the sensation of the hour. As we pointed out,
there was really no reason why we should make more of the
military situation than was made of it at centres more directly
affected. Our market has now settled itself to discounting the
good and the bad in our own home situation. While the steel and
iron shares advance under reports of the profitable business
done and being done in the industries they represent, and gen¬
erally the market is strong, the occasion is taken to expose some
weakness in other lines, as the Third Avenue Railroad for in¬
stance, so that the customary weaklings in a strong situation
are not absent. The steel and iron reports cannot fail to have a
gocd, wide-spread effect when their larger significance is appre¬
ciated. The iron and steel industry cannot be active and profit¬
able without many collateral branches of trade being active and
profitable also, or in fact without reflecLing the general condi¬
tion of business iu the country. This again airecLly affects the
railroads, and explains the prompt following that railroad stocks
and bonds have made into speculative favor, and a substantial
advance may he expected in them. The buying this week, though
not extensive, is indicative of a renewal of public inte^-est in the
stock market, which will grow as prices strengthen. There is
nothing like a rising market to attract outside buying, and we
are entitled to a good speculative move before the bogey of the
Presidential election is trotted out to scare things back into
dulldom, whither they generally trek in Presidential years.
There is, however, much more than usual to support the situation
now, not only in the trade reports previously referred to, but
also in those movements that express a consolidation of hnaaciil
strength to meet new conditions that have arisen and which
breathe of a period of profitable activity in this country hitherto
unprecedented for length.
AN indication of the trend of opinion on the tax bill, now
being so much discussed, is found in the approval of the
measure by the Builders' League, whose members are so directly
affected by its provisions. The League is the first representative
body to express their opinion of the bill. An argument employed
against the bill is that it proposes to violate an important prin¬
ciple that has prevailed hitherto, namely, to do nothing know¬
ingly that will deter capital from coming here. One of the argu¬
ments in favor of the bill is that it reaches for purposes of reve¬
nue the mortgages on real estate in this State owned by non¬
residents, which are now exempt from taxation, at the same time
that would also discourage the loaning of foreign money here to
the extent that it made New York investments less desirable than
home ones. As it is the foreign capital seeking this use is com¬
paratively small, the only large loan made wilhin comparative
recency we remember is that of the Scottish Provident Institu¬
tion on the Broadway Chambers for, say, three-quarters of a
million of our money. Doubtless other foreign Investments In
realty mortgages are made indirectly through issues of morS
gage Institutions. A good deal of money reaches this city from
A Change of Base.
THE INVESTOR WHO HAS BJ^BN A LOANER NOW A BUYER.
TH.E brokerage reports of the week emphasize certain tenden¬
cies of the real estate market which began to appear with
the return of easier monetary conditions about the middle of
January. We need not stop to consider the gratifying signs of
returning activity in residential property, including sites adapted
for improvement with handsome apartments. The overshadow¬
ing importance of the current sales at private contract lies in the
fact that they disclose, as did the brokerage news of last weelt
and the week before, a distinctly perceptible movement in invest¬
ment real estate and in mercantile prcperty. Purchases of private
houses by prospective occupants and dealing iu vacant lots and
antiquated premises in the dwelling, flat and tenemeut-hcuse dis¬
tricts by building loan operators and speculative builders, no
longer hgure exclusively in the budget, hut are suppiementtd by
a substantial body of transaccions involving new hats, pailicu-
larly elevator flats, and mercantile property, both imyroved and
unimproved. The brokerage market is unquestionably commenc¬
ing to respond to influences that maive for broader prosperity in
real estaie; the news budget is noteworthy, not only because of
an exceptionally large number ot ccnspicuous transactions—
more than a dozen—but especially because of their diversified
character.
The fundamental reason for the improvement which is becom¬
ing apparent in the real estate market is concisely stated in a
letter frcm Edward H, Gilberc, which makes editorial commenton
.he curieni change superfluous. According to Mr. Gilbert, "the in-'
vescor in real estate aisappeared from view about the middle of
1B9T, and with a tew sporadic eicepiions, he has since remained
out of view. Many exp.anaticns have been ofiiered to account for
his continued absence. The lundamental cause, which has been
a continuing one since the panic of 1893, was failure of income,
gradual but persistent, until rent uo longer represented a fair
market return upon capital. Kow, as a matter of fact, the in¬
vestor did not wholly disappear, but changed his position. He
proceeded to put his moifty cut on mortgage, wuh a hxed re¬
turn for its use, secured by real property and the bond of its
owner. He wouid loan up to 90 per cent, of value, but would not
buy. His ccnfldence iu the security was never impaired, but Jie
preferred to leave the problem of working cut the interest to tba
owner of the fee, realizing that falling rents meant failing value';,
and that there was nothing to be gained by buying. So mucn
money sought investment in this way that its value fell off from
5 to 4Vj and 4 per cent., and the prospects are that i per cent, will
become the ruling rate as soon as the industrial boom now at its
height shall have somewhat subsided and released more capital.
"Take a concrete example to show more clearly the in¬
vestor's point of view who, two years ago, had a capital of J25,-
000 to 'put out.' A mortgage loan for that amount at 5 per cent,
interest per annum would yield him yearly ?l,2oO in cash, without
deductions of any kind, the personal prcperty tax never being
collected. An investment cf the same amount in an ordinary
double fiat, with steam heat and the usual •â– improvements," held
free and clear, would show about as follows:
Cost, *2o,000.
h;-) 7IJ0
Annual reBtal ...................................... ''"
Expenses for one year— ,-,,
Taxes (assessment, ^IS.UUO).......................... ^'^'J
9'a'........................................:::;:: i^i)
Janitor ..................................... fjo
Gas .............................................; m
Water ......................................... .^-(i
10°/. cf income for repairs............................ 7,-,,
10% ol income for vacancies........................" " i â– ^â– ^^q
Jfl.aTO
Net Income.............................
"With a margin of only $120 for the risks and care of owner¬
ship In fee the investor preferred the mortgage loan. But a