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REAL ESTATE
AND
NEW YORK, AUGUST 22, 1914
WAR'S EFFECTS ON BUILDING INTERESTS
I As Viewed by Manufacturers of Construction Materials an(d Real Estate 1
I Brokers—A Big Business Revival After a Time, the General Expectation I
iiiiiiiiiiiiM^^^^
A GREAT market is opening up for
American building materials if our
producers can avail themselves of it. The
Government has this week made it pos¬
sible to quickly enlarge the merchant
marine so that American exports can
be sent anywhere in neutral bottoms,
but the question of freight rates remains
to be settled, and on these will largely
depend how much material our manu¬
facturers ma^' be able to send abroad.
Confidence in the ability of the Ad¬
ministration at Washington to keep this
country out of the armageddon that has
cut off or paralyzed thc exporting indus¬
tries of Europe is firmly established, and
the general expectation is for a great
acceleration of our foreign trade, and
that this will eventuate into a general re¬
vival of buildine construction in New
York.
Many manufacturers, including those
engaged in cement, steel and building
equipment lines, are already arranging
for banking facilities: and, on the other
hand, the South Americans are looking
to us to supply their needs. The di¬
rector of public works at Santiago,
Chili, has opened a bureau of informa¬
tion for American building materials,
where Chilean architects and engineers
can come and examine American cata¬
logues, price lists and samples.
Interviews with representative manu¬
facturers and dealers here this week dis¬
close that they are waiting only for the
apparent opportunity to be made prac¬
tically available. The general expecta¬
tion is that a general revival of all the
various lines of business related to real
estate will eventually result from the
war.
Ironmasters Expect Big Business.
James Wells, of the Wells Archi¬
tectural Iron Company, said:
"The intiuence of the European war
on building material values will natural¬
ly advance prices, which may result in
a temporary check to Building activities,
but the effects of advanced prices are
likely to be discounted by a decided im¬
provement in general business later.
"The key to the new conditions is
now in the hands of the alert manufac¬
turing and financial leaders of this coun¬
try, who arc not likely to lose the pre¬
vailing opportunities of securing a great¬
er portion of Europe's vast export busi¬
ness.
"This country's enormous capacity
i.ever was in better condition to enter
into contracts to supply the world's re¬
quirements, and when investors recog¬
nize a movement for new export busi¬
ness, then our building trades will im¬
mediately receive an impetus to prepare
for the demands of progress."
Foreign Cement Business in Prospect.
Albert Moyer, of the Vulcanite Port¬
land Cement Company, with offices in
the Fifth Avenue Building, said:
'The price of Portland cement is de¬
pendent upon the relation of the num-
b-^r of barrels manufactured in any one
district to the consumption of Portland
cement in the market supplied by that
district. New York City is supplied by
the Lehigh \'alley region of Pennsyl¬
vania and New Jersey, and by New York
State mills located on or near the Hud¬
son River. These two districts also sup¬
plv nearly all thc cement which is ex¬
ported.
At the present time the stocks in the
Lehigh Valley are as low as they have
been since 1910 and the prospects for
doing a tremendous export business are
excellent. South America consumes
millions of barrels a year and the coun¬
tries south of us buy nearly all of their
cement from either Great Britain, Ger¬
many or Belgium. Not over a million
barrels of American cement is export¬
ed annually to South America.
"Owing to the war, it will now be im¬
possible for these countries to obtain
their supply of cement from their usual
sources, and they will be forced to turn
to the United States. The amount that
we can export to South America de¬
pends upon a merchant marine and prop¬
er banking facilities. It is to be hoped
that the New York banks will make ar¬
rangements to furnish facilities in the
South American countries so that drafts
can be drawn on New York. Up to the
present time, practically all drafts have
been on either London, Berlin or Paris.
"This tremendous prospective export
business undoubtedly will have the ef¬
fect of -stimulating prices on Portland
cement for the New York market."
All Depends on Shipping Facilities.
William P. Corbett, of the Alsen Port¬
land Cement Company, said:
"There is an enormous market for first-
class Portland cement in South Amer¬
ica and the West Indies, which amounts
to approximately 15.000,000 barrels. If
all the mills in the Lehigh Valley ran at
top capacity, thev probably could not
make more than 8,000,000 barrels above
the present supply, and by that we mean
mills that could be suitably run. There¬
fore, if they should increase the output
8,000,000 barrels in the Valley, the mar¬
ket in question would take practically
twice that. It has been shown that the
moment the consumption of ceinent
reaches or exceeds the production to
even a triflino- extent, the price cannot
be held in check, because contractors
naturally become nervous the moment
shipments are delayed. They cannor
have important contracts retarded, as the
cost would be enormous, and their anx¬
iety is then as great to buy as their
procrastination when there is a chance
that prices may be a little lower.
"This country having no ship subsidy,
such as England possesses, we have no
adequate merchant marine. There are
numerous commodities besides cement
which could be advantageously sold to
some of the rich Southern countries if
we had reasonable freight rates. Fur¬
thermore, in regard to cement, a great
advantage would he the fact that those
countries, on account of their warm cli¬
mate, would use cement right through
the winter when work up here is more
or less shut down. The deplorable situ¬
ation abroad has brought a great oppor¬
tunity to this country if advantage can
be taken of it. Our Congressmen, not¬
withstanding our enormous expanse of
coast, have often been very shortsighted
in such matters.
Need of a Big Merchant Marine.
"This country needs a splendid mer¬
chant fieet besides a war fieet, and with
it we could now profit tremendously,
owing to the lamentable position of
those in Europe. Germany, England
and Belgium, the great exporters of
cement to South America and the West
Indies, are now shut off completely.
Germany has the best of this trade and
England comes next. Belgium exports
large quantities. The American cements
are fully equal to the English and much
better than the Belgian brands and are,
in fact, equal to most of the German
cements which run verv high in quality.
Germany especially has been able to ship
enormous quantities of very high grade
Portland to South America and to do
so at a price which American brands
could not meet because of the exorbitant
freight rates as compared with those
from abroad.
"From this you will draw the con¬
clusion that any advance in Portland
cement because of this war would be de¬
pendent on the question of facilities for
transportiner promptly. Even if a rea¬
sonable number of vessels could be ob¬
tained at this time, it would take, of
course, a few weeks to get any great
quantity loaded and shipped, but a start
would be beneficial, and furthermore,
a market once gained is much easier to
keep than it is to obtain a new market.
Personally, the writer does not look for
any immediate advance; or, if there is
an advance this fall, for more than a
moderate increase in the price, and cer¬
tainly not enough to injure or interfere
with any hoped-for revival in the build¬
ing trade. A difference of say 10c per
barrel would not be felt at all in good
times, while a large export business
would wonderfully stimulate things in
this country and perhaps hasten the re¬
covery from the unquestioned depres¬
sion from which business men have suf¬
fered. All of the large contracts which
we are supplying are going along just
as usual, with no indication of any ces¬
sation which, of course, would not be
expected."
A New Era at Hand.
William K. Hammond, a director of
the association of Dealers in Building
Materials, said:
"For the immediate present, in my
opinion. building construction must
await the eventualities of the war.
Many kinds of material will for a period
be sold at prices so near a loss to the
producers that those who are now able
to purchase and use these goods will be
greatly advantaged over those whose
operations are long deferred.
"Not that I predict a sudden or sharp
advance in prices, yet the results to this
country from its own internal com¬
merce, together with the world's busi¬
ness which will presently be transacted
here, all make for changes and in¬
creases in demand in our Greater City
and surroundings, not to speak of the