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October 9, 1909
RECORD AND GUIDE
635
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BifsftfESs Alto Theses of GE|feRftl iKTERfaiv
PRICE PER YEAR IN ADVANCE EIGHT DOLLARS
Communications should be addressed to
C. W. SWEET
Published Every Saturday
By THE RECORD AND GUIDE CO.
President, CLINTON W, SWEET Treasurer, F. W, DODGE
VIce-Fres, & Genl, Mgr,, H, W. DESMOND Secretary, F, T. MILLER
Nos. 11 to 15 East 24tl> Street, New York Ctty
{Telephone, Madison Square, 4430 to 4433,)
"Entered at tlic Post Office at New York. N. Y.. as second-class matter."
Copyrighted, 1009. by The Record £ Guide Co.
would be politically impossible, Iiowever, to introduce the
English system into New York, and it may be hoped that
little by little the local voters will come to take more o[ au
interest in questions of municipal economy. The current
campaign, however it comes, out, will at least have the merit
of familiarizing the voters with certain important aspects
of the business administration of New York City. During
three elections these purely business questions have beeu sub¬
ordinated to moral and personal issues, wliich, however
important and interesting iu themselves, tended to obscure
the fact that the city of New York is primarily a business
corporation. The prominence which these business ques¬
tions will obtain during the campaign will at least enable
the voters to estimate with more knowledge and accuracy
the success cr failure of any administraLiou that may he
elected.
Vol, LXXXIV,
OCTOBER 9, 1909,
No, 21G9
THE increase in the rates for call money, which has
prevailed in Wall Street of late, is probably only a
temporary disturbance, and its effect upon the stock mar¬
ket has heen distinctly wholesome. It is wholly improhahle
that the real estate and building market, will during the
coming year be distiirbed. by any embarrassing scarcity ol
loanable capital, because if for no other reason, the dominant
financial interests will uot allow the speculative campaign
for higher prices in securities to tie up too large a percentage
of the available supply of floating capital. At the same time
it must always be remembered that the inelastic currency
system of the LInited States distinctly encourages alternate
periods of excessive ease in the money market and excessive
stringency, and one can never he quite sure that au ac¬
cumulation of speculative aud legitimate business demands
on the money market may not suddenly snatch the situation
out of the hands of the controlling financial interests. Those
interests need to keep money comparatively easy, because
of the large amouuts of new securities, which they will be
obliged to float during the coming year; but there are cer-
taizi factors in the situation which they cannot control—in
spite of the object lesson in the necessity for control, which
they received two years ago. They have no way of adapting
the supply of loanable capital to the bnsiness needs of the
country; and they can have uoue, until some kind of a
central bank is organized, with a power of note issue, which
can be properly regulated. There is no branch of business
in the country that would be more benefitted by an efl'ec-
tive regulation of the money market than the real estate
and building interest. That interest suffers far more from
periods of tight money than it gains from periods of easy
money. During periods of easy money the interest rate
even on thoroughly good mortgages never falls below a
certain figure, whereas in periods of tight money the spec¬
ulators, the manufacturers and the merchants almost crowd
the real estate borrower out of the market. A sound regu¬
lation of the supply of loanable capital would consequently,
help the real estate borrower in periods of stringency with¬
out doing him any harm in periods of ease. It is only specu¬
lators in stocks and in general business who benefit from
very low rates for call money.
THERE is every evidence that the current municipal
campaign will not arouse as much excitement among
the voters as fhe last three municipal campaigns have done.
The contest wil! lack the sharp personal mora! interest
which it had on those former occasions. The most promi¬
nent issue di=cussed hy the campaign speakers will neces¬
sarily he that of municipal economy, and it is at the present
time very difficult to make the New Yorker take a very eager
interest in an issue of that description. When taxes are
heing increased the immediate burden falls upon a few
thousand tax-payers, and the hundreds of thouKands of ten¬
ants who constitute the voting population of the city do not
have the fact of the increase brought home to them in any
tangible way. Of course they will be obliged to pay most
of the increase eventually, but when they pay th&y will uot
know it, and it usually takes a good many years to distri¬
bute the increasing burdens among the actual tenants ot
the buildings. This is one of the reasons why in England,
where the tenants pay the taxes, the municipal voters take
so much more interest in questions of municipal economy. It
LAST SPRING it looked as if the proposed constitutional
amendment of permitting the city to issue as much
stock as it wants for subway construction would bulk large
in the campaign; but events have since reduced this matter
to one of subordinate importance. It is true that the plat¬
forms of the several municipal parties all of them favor
subway construction with the funds of the city, and that
consequently, the party voters will in all probability be in¬
structed to vote for the amendment. Inasmuch, however,
as the funds of the city will net be required for the con¬
struction of new subways, it is unimportant whether tbe
amendment is or is not passed. At least two responsible bid¬
ders have agreed to construct new subways with their own
money under the indefinite franchises provided for by the
new Rapid Transit Act, and it would of course he foolish for
the city to use its credit for the huilding of new
lines, unless it were necessary to do so. No doubt
it is still on the whole advisable to adopt the con¬
stitutional amendment, because it is possible that the atti¬
tude of these bidders might change in case they saw that
the city was physically disqualified frora protecting its own
interest in a municipal subw-ay system. But we do not be¬
lieve that even though the amendment were defeated, the
Interborough Co. and the Gaffney syndicate would refuse to
make their bids under the existing law. They must realize
that local public opinion is absolutely agreed upon demand¬
ing the effective municipal control of the subway system,
and that the people of New York would submit to eveu fur¬
ther delays, rather than consent to any alteration in the ex¬
isting Rapid Transit Act. They want new subways badly,
but they have decided that these means of communication
shall not be alienated by the city even for so long a period
as has the existing subw-ay.
IN CONNECTION with the subway it is only fair to point
out that the anti-Tammany speakers are wholly unjust to
the existing Board of Estimate in criticizing it for not having
appropriated more money for subway construction. The
Board has cordially co-operated with the old and the new
Rapid Transit Commission in all their plans for subway con¬
struction except one. It promptly approved the plans of the
Id Board, and if those plans went astray it was only be¬
cause private capitalists would not and the city could not
carry them out. Neither would it have been possible for the
Board of Estimate to have authorized the construction of
the Broadway-Lexington avenue route. The debt limit was
absolutely prohibitive of any such action. The only sub¬
way which the Board of Estimate refused to finance which
it could have financed was the Fourth avenue subway- in
Brooklyn, and in this refusal the Board was wholly justified.
Moreover it has received its justification at lhe hands of that
very body which criticized it most virulently for its refusal
—tliG Public Service Commission. Under the new law the"
cost of the Fourth Avenue Subway will be levied on the
[jroperty benefitted by its construrtion; aud the city will be
spared tho expense which the Public Service commission
wished to impose upon it, and which the Board of Estimate
rightly refused to sanction.
THERE can" he no doubt that during the past few montliH
Times Square has been the location of the most inter¬
esting real estate developments. Indication.s are accumula¬
tive that the long expected business development of the
Square is destined to take place during the next few years.
It is true that the proposed improvements include two new
hotels, and two new theatres, which will tend to keep the
Square restricted to its existing employment. But, on the