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Real estate record and builders' guide: v. 28, no. 708: October 8, 1881

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Real Estate Record AND BUILDERS' GUIDE. Vol. XXYIII. NEW TORK, SATUEDAT, OCTOBER 8, 1881. No. 708 Published Weekly by The Real Estate Uecord Association TERMS: ONE TEAE, in advance.....$6.00 Communications should be addressed to e. W. SWEET, 13T Broadway. J. T. LINDSEY, Business Manager. FIELD, COWING AND MANHATTAN. A very refreshing document for a Manhat- t?^^ stockholder to read, and one most likely ;d>^ive him a pungent idea of how great a swindle he is innocently connected with, is the affidavit of James A. Cowing, who is n<}w, and has been for the last nine years, the treasurer of the New York Elevated Railroad Company. The affidavit named was made in the recent suit of the New York Elevated Company against the Man¬ hattan Railway Company, and is one of a series made in the legal proceedings by which it is intended that the New York Elevated Railroad shall regain possession of its property, and, at the same time, have the Manhattan Company declared bank¬ rupt, and its lease null and void. To understand this affidavit properly, it must be borne in mind that in 1879, when Cyrus Field, James A. Cowing, and'their co-directors leased the elevated railroads to the Manhattan Company, that the fixed charges fastened by them upon this corporation for the lease were $2,400,000 per year. Now let us see, according to Cow- ing's affidavit,how far these originators of the Manhattan company were'justified in loading it at this rate. Cowing swears that the Man¬ hattan Company took possession of the Ele¬ vated roads in June 1879, and at the time of the delivery of the New York Elevated and Metropolitan Companies to the Manhattan the surplus accrued earnings of each com¬ pany, from February 1879 to June 1879, amounting to $311,000, were turned over to the Manhattan company, which amount re¬ presented the earnings of the two companies for that time over operating expenses. On this showing it appears that in the four months of February, March, April and May of 1879, tne net earnings of the two companies were only $311,000, or at the rate of $933,000 per year; and yet these men knowing then as well as now, that such earnings would not admit of it, dared to make a lease by which they fastened a certain deficiency of $1,000,000 yearly on the Manhattan Com¬ pany. One can hardly believe that so stupendous and palpable a swindle was possible, and certainly it takes a goodly amount of assurance for the very men who were the most active in foisting such an out¬ rageous lease on innocent holders, to now come before a court and ask for the dissolu¬ tion of the company they created. But this financier teUs his own story when he says, further along in his affidavit, that theire has been no month since the Msnhattaa Company commenced to operate the roads, when its net earnings have not fallen considerably behind its fixed charges and dividends, and that this deficiency exists without taking into account taxes of any kind, and that the actual figures are at the rate of over $1,000,000 per year. How, under the sun, we ask, could it be otherwise ? Now, let us see in the same proceedings what the astute Mr. Field swears to. Mr. Field, in his affidavit, says that he be¬ came a director of the Manhattan Company, November 5, 1877 (mind the date). At this time the Manattan Company had only its charter and a little office furniture, and it was not until the 20th day of May, 1879, that the tripartite agreement was signed, and the lease of the elevated roads saddled on Manhattan. On the 21st day of May, 1879, Mr. Field resigned from the Man¬ hattan Company, and a few days there¬ after started for Europe. New York Ele¬ vated stock at that time was selling for about 200, and this was the figure at which Mr. Field was willing to unload, but this was so good a thing that he went to England to give a slice of it to his friends there, but how his plans in this respect were frustrated by Tilden, who sold out on him, is too well known to call for repetition now. Field, on learning of what he called the treachery of Tilden, immediately returned to this country, and, in July, 1879, again went into the Man¬ hattan directory. Then began the blowing up of the Manhattan balloon. AU kinds of stories about enormous earnings, light ex¬ penses, statistics of possible increase of travel, &c., were put into circulation, and the stock began to rise. State Engineer Sweet even went so far as to say that the expense of running the New York Elevated was only 31 per cent., and that it could be brought down to 25 per cent. This lie was put into an official document, and many people having faith in that statement, thought the stocks must be a good investment, bought, and, of course, were left high and dry. Mr. Field, how¬ ever, knew better, and when the stock reached the sixties he sold, and in his affidavit acknowledges to having sold his stock in the month of November at about $61 per share. Directly afterward he again went to Europe, so as to be out of the way when the inevitable decline should set in. He returned again in a few months and began abusing Manhattan stock and everybody connected with it. Of course he dared not just then attack it too violently, as he could not well explain why, if he had just before been a holder up to 60, it should so soon become worthless. Shortly after¬ ward, he went away on a trip around the world, and it is only since his return that he has made an open, unconipromising fight with the Manhattan Company. "When the Atlantic Cable was completed, it win be remembered that at the celebra¬ tion held in New York, one solitary message Was received^ whereupon the cable ceased working. The shaieis which had been coni- manding a high |figure suddenly fell, and somebody bought them up. After a time it was found that some one had tampered with the cable ; a nail had been driven into it in the interest of some speculative scoundrel who wished to buy the shares cheap. Sub¬ sequently, a great deal of money was made out of the Atlantic cable, and among others who got rich by it was Cyrus W. Field. CHRONOLOGICAL DATA. Nov. 5, 1877—Cyrus W, Field first becomes connected with the Manhattan Company, which at this time had nothing but its char¬ ter; no money, consequently some¬ thing must he done for it. May 20, 1879—Lease of elevated roads made to Man¬ hattan Company, wherein this com¬ pany, without capital, agreed to pay $2,400,000 per year. May 21, 1879—Mr, Field prudently resigns from the Manhattan Company, July, 1879—Having failed to sell bis stock in England, he returns to this country and again becomes a director of the Manhattan Company, Nov. 10, 1879—Sells all his Manhattan stock at about $61 per share. Decern., 1879—Thinks it prudent to again take an Euro¬ pean trip. March, 1880—Returns to this country and sells thir¬ teen sharesJVIauhattan, just enough for a poor widow who wanted a good investment, July, 1881—Begins suit to recover his property, and prays to the Court to declare tho company bankrupt, the shares of which in Nov,, 1879, he sold for $61 per share. THE MONEY MARKET AND VALUES. The figures printed in the financial jour¬ nals to-day, will show that the railroads did a much larger business in September of this year than they did during September of the previous year. The August returns showed an advance of 233^ per cent, over the same month last year, and 1880 was 34 per cent, in advance of 1879. There has undoubtedly been loss of traffic on some of the grain roads, but the aggregate railroad business of the country is larger to-day than in any other p'eriod of our history. Yet, at this time last year prices were advancing on an excited buU market, when to-day prices are steadUy receding after having gone o£f an average of over twenty points. How is this to be accounted for ? WaU street responds that the difficulty is because of tight money, and that tight money is due to the absorbtion of current funds by the growing business of the country, as weU as by the demands of the speculators who are bulUng corn and wheat. Whatever the rea¬ son, the fact remains that prices in WaU street have started downward, and there are not many comforting assurances for the buUs in the immediate future. Europe wants aU her gold, and the great national banks abroad are putting up their rates of discount so as to retain their money. Instead of gold they are sending us goods. Our speculators have so advanced the price of cotton, com, and wheat, that exports are Ught—so very little exchange is made. Secretary Windom, it is said, wiU do nothing more for WaU street. Tight money may break the Chicago comer in grain, ^which would be a benefit to the country. Of course, the tide wiU turn some time. Prices cannot always go down, any more than than they can always go up, and there wiU :>be more thau one buU market before the