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Copyrighted.   1907,   by  Tbe  Record   &   Guide  Co.





Vol.   LXXX.





OCTOBER  12,  1907.





No.  2035.





INDEX TO DEPARTMENTS.
Advertising  Section.

Page,                                              Page.

Cement    .....................xviii  Lumber   .....................xxii

Clay  Products   ................x\ĸ  iMachlnery   ...................xvl

Consulting Engineers   .........xv   Metal  Worlc................xiv

Contractors   and   Builders......iv  Quick Job Directory..........xxiĩ

Electrical Interests   ..........xvii   Real   Estate   ...................ix

Fireproofing   ...................ii  Roofers & Roofing Materlais.xyli

Granite    ......................xx  Stone   ........................xx

Iron  and  Steel..............viii  Wood  Products   .............xsiii





A Moment

wíth

Finance





THE EXISTING FINANCIAL SITUATION
is extraordĩnary in its uncertainty and in ĩts
complexity. The financial community is,
indeed, precĩsely in tíie situation of a doc-
tor's patient, wíio cannot recover without a
surgical operation, and ■who is thoroughly
disconcerted and scared at the prospect. The economic con-
ditĩon of the country early last winter was of a líind whlch
could not endure. The business men of the Unĩted States were
expanding their operations in a way not justified by their capi-
tal, and capital was bound to become too scarce for their pur-
poses. In the same way, and for the same reasons, the labor
market had reached an întolerable condition. The demand for
labor was so great, and its price so high, as large'.y to increase
the cost of conducting business, while at the sarae time its
efScieney was decreasîng. Employers coiild not afford to select
only efficient men, because there were not enough to go around,
and they were obliged to pay high wages for second-rate worlĩ.
Manifestly, both of these evils could be cured only by a con-
traction in business. There must be a temporary cessation in
the employment of án increasing volume of capital in business,
and employers must again be placed in a positîon which would
enable them to díspense with inefficient labor, Better a smaller
volume of business, wbich was economically handled, than a
large vo'itime whîch strained a man's resources and endangered
his credit* witiiout adding to his proíĩts. This business contrac-
tion is now evidently taldng place; but the financial community,
instead of taking it with a cool head, is thoroughly frightened
hy its symptoms, and a question as to the meaning o'f this
panic can scarcely be avoided. Is it simply a matter of un-
settĩed nerves, or does it raean that the contraction cannot take
place without many more failures than have been generally
suspected? How many business men, that is, are in a condition
which permits them the luxury of contraction? These are the
questions whieh the next few months will answer. In the mean-
tîme investors, who can keep their heads and can control a cer-
taîn amount of cash, have opportunities whîch may not occur
again in ten years. The only question for such a man is:
"When should I buy?" It is true thafc stocks may be cheaper;
but the attempt to buy at the very bottom is attended with as
many dangers as the attempt to seĩĩ at the very top.





business,   and   the   Trinity   Buiĩdings   are   accomplished   facts.
For the first time in its history, it is doing no building on its
own account,  and  it  ís not making any  preparation for  new
building.    The  City  Investment  Company  still  has  its  hands
full wĩth its colossal improvement on Cortlaniĩt Street; bitt in
other respects it is apparently out of the marĩiet.- So it is with .'
the large 'individual operators.    They are holding on tight, but
they are not increasing tĩieir responsibilities.    As to the thou-
sands of smaller operators, who a year or two ago were buying
and  selling tenements  so  freely,  they,  too,  have  disappeared.
from view; and one cannot help wondering how many of tliem
will   reappear  as   factora   in   the  making  of  New   York   real
estate values.    The speculation in tenement houses, on which
they  have  lived,   has  become  an  unremunerative  occupation;
and, so far as can be discovered at present, it is not likely to
become   remunerative  again  for  many  years.    They  lack  the
capital to deal in more expensive classes of property, and under
existing  conditions  they  cannot  disengage  even  what capital
they have,    Tlie important question raised by the sĩtuation is
whether tlie apathy 'will result in mtich liquidation,    ■Will the
operators who have been buying real estate so assiduously in
tlie speculative district be obliged to stimulate the demand for
íheir holdings by means of the substantial reduction of their
asking prices?    So far little or no liquidation has taken place;
anS'the extent to which it will take place will doubtĩess depend
chiefly on  the duration of the existing apathy.    The duration
of  the existing apathy  will, ín its  turn,  depend chiefly upon
the relief in the stringency of the money market.    Such relief
can hardly be expeeted until next spring, and it may not become
really effective until nêxt fall.    In the meantime it is improb-
able tliat the  liquidation,  if it begins,  will proceed very far.
The   forces   whieh  are  making  for  the  improvement of  real
estate'values in a eity, which adds over 125,000 people to its
inhabitants  every year,  are  too  powerful  to be  quiescent for
long.





The
Busíness

Season





AS THE SEASON ADVANCES the real es-
tate market does not gain either in the vol-
ume or in the scope of its actĩvîty. Apartfrom
the sale of a few private houses, and the
oecasional transfer of business property of
some importance, it is almost completely
quiescent. The widespread and buoyant speculatîve movement,
whĩch has "been the mainstay of the raarket since 1901, is at
the present time praetieally dead. The large speculative and
investment corporations are teraporari'.y out of business. The
United States Realty Corporation, for insfcance. has finished its
great constructive operations.    The Plaza Hotel  Is open  for





Cost of
Railroad

Terminals





IT IS A SINGULAR fIcT that the increase
in the value of urban real estate constitutes
both the strength and the -weakriess of the
economic situation of the greaf .American
railroads. During the ĩast few years their
expansion in business has been dut of all
proportion to their expansion in mileage; and new railroads
cannot be built, in order to keep pace with the increase in busi-
ness, chiefly because of tbe expense of securing terminals in the
large cities. The large existing railroad systems which own such
terminals possess thereby a strategic advantage in the conduct
of their business, whieh must be described as something in the
nature of a monopoly. Possessed, as they are, of means of
doing business which are essential and which cannot be dupli-
cated, tbe business raust come to thera; and it must come to
them in a volume which is somewhat independent of their
traffic effieiency. Unfortunately, however, the very conditions
whieh places them beyond efCective competition also makes it
difficult for thera to handle econoraically this increasing volume
of fcrafflc. In times of financial abundance they can, of course,
add to fcheir raileage, double-track their roads and increase the
effieiency of their systems by tiie reduction of grades and
sirailar împrovements; but when it comes to enlarging their
terminals, they are confrouted by an expense from which even
the riehest corporatîons shrink. As Mr. James J. Hill has so
often pointed out, the cost of such terrainals is almost prohibî-
tive, The experience of the Pennsylvania and the New York
Central in iraproving their terminals in Manhattan is not sucli
as to encourage other corporations in undertaking similar tasks.
They have been obliged to raise enormous sums of money, fre-
quently at a huge expense; and they have thereby impaired for
the tirae being both their credit and the security of their divi-
dends. It is probable that at the present time the stock, both
of New York Central and Pennsylvania, wouId.be selling thirty
points higher in case these euormous sums of money had not
been spcnt: aud no doubt tbe stockholders of both of these rail-
roád companies have made this reflection with some bitfcerness
of spirit. It is none the less true, however, that twenty years
from now the wisdom of these huge expenditures wil! be fully
vindicated. By these means these two railroads will have se-
cured an advantage over theĩr competifcors which will place
them in an invincibĩe position. They will have built for the
fut:ire in the most substantial possib^e manner, and will be re-
paid many times for their recent, present and prospective sacri-
fices. It would be wise policy on the part of the great Western
railroads, durîng the next period of easy money, to reduce divi-
dends if neeessary, in order to provide the terminals, without
which they cannot properly continue to fulfil their functions aa
comroon carriers,                    '^