Columbia University Libraries Digital Collections: The Real Estate Record

The Record and guide: v. 40, no. 1026: November 12, 1887

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November 13, 1887 The Record and Guide. 1409 THE RECORD AND GUIDE, Published every Saturday. 191 Broadway, N". HT* Our Teleplioue Call Is - - - - JOHN 370. TERMS: ONE TEAR, in adyance, SIX DOLLARS. Communications should be addressed to C. W. SWEET, 191 Broadway, J. T. LINDSEY, Business Manager. Vol, XL. NOVEMBER 13. 1887. No. 1,026 When General Newton was put at the head of the Department of Publio Works our citizens very generally thought it waa an ideal appointment. They knew this West Point graduate was a good engineer and an honest man; hence the complaints against General Newton and his department by the Chamber of Commerce took the community by surprise. Mr, Schultz and the other com¬ plaining merchanta doubtless overstated their case, but perhaps where there is so much smoke there may be some fire. The head of tbe Public Worka should be a business man; which army officers are not. Even General Grant failed in every business undertaking during his whole life. The West Shore Railroad was built by army officers, but it cost vastly more than their estimatei, and ruined all who put money in the enterprise. Something more than honesty and engineering ability is required in the transaction of business. As yet the public bas not been put in possefision of any facts that would discredit General Newton, but he may show, as do other army officers, a lack of business training."; One of the most discouraging results of the election last Tuesday was the inferior quality of the legislators elected to govern us from Albany. The great majority of those chosen will do no honor to the State. Quite the contrary; indeed it is an ominouB fact that since before the war New York has been unable to ©leet one Legis¬ lature which could be called honest. The majority has always been on the "make." The lobby, if supplied with money, can dictate what measures shall be enacted into laws. The new Legis¬ lature will be as bad as the worst. While the Senate and Assembly elect is very inferior as regards ability and honesty, the judicial and other officers chosen in New York and Kings County are much above the average. Brooklyn has a good Mayor, and the judges returned in New York are nearly all that could be desired. For so much let us be thankful. Among the measures that will certainly be pressed upon Congress to get rid of the Treasury surplus will be the one first presented by Mr. John Jay Knox, which aims at substituting the Government 4s and 4}4^ by a new bond bearing 2J^ per cent, interest and running fifty years; th© government paying a premium so as to expedite the exchange. It is by means of thia premium that it is proposed to get rid of the present surplus in the Treasury, There is much to be said in favor of this plan, as it would eflfectually get rid of the unused money in the Treasury and afford time for such reductions in our tariff and tax laws as would in tte future secure a more equal balance between the Treasury's receipts and expenditures. Mr. A. P, St.. John, Presi¬ dent of the Mercantile National Bank of this city objects, however, in the Bankem'' Magazine, to Mr. Knox's scheme. This gentleman declares that "either the refunding will prove a failure if attempted, or its success will at once inure to the disadvantage of the United States." He goes on to say that should the holders of the national debt agree to the refunding the difficulty would not be settled but postponed, for if the government Treasury continues to receive more than it expends it would again have to give extra inducements to the holders of the new securities in order to get them to part with their evidences of the national obligation. ---------«---------- But Mr. St, John overlooks several very grave objections to the issuing of any 2J^ per cent, government security. Money is legiti¬ mately worth in this new country from 6 to 7 per cent, Tbis fact has been lost sight of since the Treasury department has been in the market for over twenty years steadily purchasing its own obligations. Our national debt for that long period has prac¬ tically been cornered. This had an unwholesome effect upon specu¬ lation, for ik bas set a standard which has made money artificially cheap. Thia again has led to a practical inflation of all bonds and stocks, and, for that matter, of all purchasable property, including improved real estate. A stock, bond, or a security from which 6 per cent, is derived should sell at about par; but the unwholesome enhancement of the price of government bonds has made a 4 per cent, security seem cheap at par. page of government bond purchases. Prices at once responded in the general markets. Nominal rates for money were again demanded. An attempt to float a 2J^ per cent, bond would undoubtedly be a good thing for Wall street speculation. It would give a fictitious value to every interest-bearing security. After a time, when the conversion of the 4 and 4^8 into Sf^a had been complete, thero would occur another crisis, as money would then become dearer again. The government 2J^s would probably in time fall to 80 or less, and there would be a panio in all securities. The adoption of Mr. Knox's scheme would mean an immediate undue inflation, followed further along by a panio in pricet. The Pennsylvania Central road has at length beeu given per¬ mission to raise its tracks in Jersey City, so as to obviate the danger¬ ous obstruction and frequent loss of life from the running of trains on the surface of the streets. For several years the corporation has been trying to make this change, and at its own expense. But the local politicians, doubtless with the view of levying blackmail, have opposed the improvement. It is strange how instinctively the local government of cities will object to anything that will benefit their localities. Here is Mayor Hewitt and the Corporation Counsel opposing the laying of additional rails on the L roads, which, if done, would be a great accommodation to our citizens, as it would permit more frequent trains and tripe in shorter time between the upper and lower portions of the city. The Pennsylva¬ nia road expects to expend nearly a million dollars in constructing an elevated track and in making other improvements. Tbe result will be an advance in Jersey City property, unobstructed streets, and a great saving of human life. The construction of an elevator building at 116th street and 8fch avenue is a great convenience for the patrons of the L roads in that vicinity. There ought to be elevators at every station for the use of the sick, aged, and for women whose health forbids them climbing stairs. The horse cars now get many customers who would prefer to travel on the L road were it not for the stairs, A small charge would be willingly paid by tens of thousands of per¬ sons were such an accommodation afforded. The policy of the Treasury department seema to aim at demon¬ etizing gold. There is now stored up in the vaults $120,000,000 gold bullion. Of this over $22,000,000 came to this country from abroad as foreign coin. It was not turned into American money, but melted into bars and stored away in the Treasury. For ten months our gold coinage was something over $18,000,000, while less than $4,000,000 of the $27,000,000 we have received from abroad was American gold coin. Undoubtedly it is agood thing to import gold from Europe, but to benefit the trade of the country it ought to enter into the circulation. Under the policy of the administra¬ tion it is the silver that circulates, while the gold remains inert in the Treasury vaults. Our readers can recall tbe cry of our news¬ papers, who said : "Why keep piling up silver dollars which no one wants ?" But it is the silver which has become the active currency, while gold has been put into bars, so as to be ready for exportation when the balance of trade turns against us. The recent dcpreasion in Wall street was largely due to tbe stop- David A. Wells, in his fourth article explaining the causes which, he thinks, have led to the decline in prices throughout the world within the last fourteen years, denies that the demonetization of silver has anything to do with the depression. This is because labor, domestic service, British consols, tobacco, wool, ivory and some other articles have not declined in value. He claims tbat the scarcity of currency should affect all prices indiscriminately. Now there are special reasons why eaoh of the articles he mentions should not have declined in price; of which may be mentioned the organization of the working people—the disfavor with which domestic service is being regarded—the killing off of elephants. These and other similar causes account for the higher wages for all work and for the higher price of ivory; but the fact remains that the astonishing falling off in values in nearly everything used by man has been made to do the duty of measuring values without the help of silver._____________ The historical fact cannot be disputed tbat whenever large addi¬ tions are made to the metallic currency of tbe world a stimulus is given to commerce everywhere. In the Middle Ages society was backward because there was a deficiency in the metallic currency ; in Europe it was less than $12 per capita. After the discovery of America the mines of Mexico, Central and South America added vast quantities to the gold and silver used in commerce. Hence, in the Elizabelhian age, occurred the revival of industry the world over. Then we all know the beneficial results which came from the flood of gold which was poured into the channels of trade from the placer beds and mines of California and Australia, This great supply has fallen off, and in addition the commercial world no longer uses silver to measure values ; hence the disastrous fall in prices >?hichMr, Welle.t^lls ns pf in his recent publications. There