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Real estate record and builders' guide: v. 25, no. 625: March 6, 1880

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EAL Estate Record AND BUILDERS^ GUIDE. YoL. XXY. NEW YORK, SATURDAY, MARCH 6, 1880. No. 625 Published Weekly by TERMS. OWE YEAR, in advance... .SIO.OO. Oommuuications should be addressed to C. W. SAVBJET, Nos. 11,5 AND 137 Broaoawt. INVESTMENTS IN REAL ESTATE. There are a few notable characteristics in the recent movements in the real estate market, the chief of which is the proportionately smallaniount of capital going into these investments. Take the West Side, which is a favorite field, all the money which has gone into investments there in the last year would not aggregate over two million dollars. Contrast this with the movements of capital in Wall street; it does not exceed many a single operation of daily occurrence. The result is that there has not j-et been enough money put in the real estate market to move it more than one section at a time. If the time should come that any respectable amount, say flve inillionF, is employed there in purchases, the effect, as every real estate dealer s-ees, would be sur¬ prising. Real estate used to be the great field for investment and speculalive enterprises. Now it is compar-atively one of tho smallest. Govern¬ ment securities take up the money held for investments by the hundreds and thousands of millions. If this money were released, or if there were no such securities, millions would be expended in improvements and building on prop¬ erty. Hundreds of Nevv York capitalists would do what Edward Clark is now doing alone. If there comes the feeling that a row of buildings or a large apartment hou:e, is a safe and profitable investment, and Mr. Clark is now proving this, the transfer of a few millions from four per cents into real estate would make a boom that would start theniarket into an extra¬ ordinary activity. Iu the present peculiar state of the marKet with not enough money moving to keep all parts of the field active at ^the same time, the phases are very interesting. Take one illustration; street lots between Fifth and Madison avenues, aud from Sixtieth to Seventieth street, will sell at §35,000 to a builder who will erect a house on it, and sell it at a profit. This establishes that value for the lot, as actual and productive and not a speculative value. Taking this as a start¬ ing point, the scale of values, according to just gradations, shows tbat lots on that part of Fifth avenue are worth $.50,000. Eighth avenue, with its finer and higher grade, and unobstructed views over the park, and, being a few years behind in point of occupation, will be worth about half of the Fifth avenue. The Boulevard, if the surf ace railroad is extended through ifc as promised, will be worth a propor¬ tion, say three quarters of what the Eighth avenue is worth; and Riverside, which a year ago was worth nothing ^to^ speak of, with its magnificent river views, the beauty of which few have any conception, will be worth as much as the Eighth avenue, or, as some people think, worth ra ore than the Fifth. If there was a full flow of money into investments of this character, prices would be 'pretty well sustained in these different divisions of the fleld. As ifc is, the tide of value is approaching these graded levels with irregular and fitful moveraents, and the fitten tion of buyers is attracted to only one line at a time; the different divisions are taken up and advanced in turn. If the profitable employment of money should attract a large amount of capital, and particularly if improvements should goon, the phases of theniarket might change in a dav. A QUIET LOOK AHEAD. Last week we reviewed the situation in the general business of the country in a somewhat hopeful spirit, bufc perhaps ifc would be well to poinfc ont some possible dangers which cautious business men should constantly keep in mind. VVe are living in "bull" times, when prices are advancing and all the evidences of wealth are in¬ creasing in market value. Hence everyone is di:posed to be jubilant and perhaps incautious; for steady, old fashioned business men have noticed that in the race for wealth it is the rash and adventurous who have made the most money during the past year and a half. We ourselves have no serious apprehensions for the next few years, and yet there will be certain minor disasters against which we wish to call the at¬ tention of the business community. First, in importance, is the condition of our currency. We have repeatedly pointed oufc in these columns the danger which has come upon us from the addition of all the gold and silver of the country to our greenback and bank circulation without any attempted reduction in the volume of paper. Our gold and silver practically did nofc count before resumption. Since then we have added at least three hundred million of gold and silver to the available currency of the country. Ifc is the experience of history that all such additions to the currency, whether it be gold or silver, or paper, have a tendency to swell prices. Voltaire, the famous French philosopher and writer, was asked how he became rich. "Oh," he said, "I have a friend among the directors of the Bauk of France. When the bank is about to issue currency he lets me know and I buy; when the currency is to be contracted I sell." And this is the secret of a great deal of the money making of the day. The keys of the financial situation are nofc held so much by the great stock speculators as by the inside money lenders and those who are familiar with the secrets of the Treasury Department, and the banks and capitalists who lend money have an advantage over all other operators. The outside public playing against these greafc money kings in the end surely lose the game, "for the dice are loaded and the cards are stacked." Ifc is the great bankers who are absorbing the money of the world. The danger lies just here. Resumption was all righfc, so long as our exports lai-gely exceeded our imports and gold came pouring into the country. This has kept prices rushing up, and wiU continue to keep them advancing until such time as our imports begin to exceed our exports. Already our importation of gold and silver has ceased and our exportation has commenced. Since the Isfc of January over a million dollars has left this porfc for Europe, and by May it will be found that a steady drain of the precious metals will be leaving our coast. We should have tried to re¬ tain our bullion by putting behind every green¬ back an honest dollar of gold or silver. In place of one, two five and ten dollar bills, we ought to-day to be circulating gold and silver. In other words, we ought to have made every possible use of bullion in our own counti-y. But the present is a Greenback Congress and would not listen to anything that favored contraction, while the business men were so absorbingly employed in making money thafc a reform in the currency did not interest them. Hence we are going ahead recklessly with our top-heavy currency, and some¬ time within the coming two years there will be a crash. When the drain of gold becomes so great that an alarm is created, there will be a rush upon the Treasury for a liquida¬ tion of the greenbacks; gold will disappear from circulation and be quoted afc a premium, and then look out for a terrific break in prices. It will bo temporary of course. The prosperity of the country will continue, bufc people who hold high priced stocks or goods on margins will suffer severely. The speculative element will be sharply punished. Wise action by Congress would anticipate this trouble and avoid it, but Congress is not wise, and the busi¬ ness men of the country do nofc appreciate and do not care for whafc will happen in a couple of years from now. Here, then, is the first peril in the future, namely, the suspension of specie pay¬ ments by the government upon an excessive demand for gold for greenbacks. Secretary Sherman evidently anticipated some such trouble for he insists that Congress shall leave him his power to pay oufc greenbacks instead of gold upon demand. Our second danger is unprofitable investments. The country is so hopeful, people ai*e so eager to make money, there having been a margin of profit on everythmg dealt in since 1877, that the adventurous and sanguine are looking around for new investments. So long as they confine them¬ selves to the legitimate business of the country, no harm will come of it. But there are many mining adventures and railroad enterprises which are certain to be unprofitable. The city is swarming with people from the Pacific coast with mining schemes, and some of our mosfc con¬ servative operators and bankers are catching the fever. The fall in Little Pittsburg foreshadows what may happen lo a number of equally promising stocks. We now recall the petroleum mania and its disastrous issue, bufc the losses in thafc business will be as nothing compared with what may come through unwise investments in mining shares. We have nothing to say against the business. It is one of the mosfc promising indus¬ tries of the country, bufc somehow stock opera¬ tions in connection with mining matters have usually resulted disastrously. Ifc is inevitable that after a time dividend paying mines will be discredited, and the dealing in mining stocks .\vill be regarded as mere gambles. For years past,