Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 48, no. 1238: December 5, 1891

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t)ecember 6,1891 Record and Guide. 711 ^ ^> ESTABUSHED ■^NWPHSI'i^ 1868. De/oteO to R|e\L Es we . BuiLoiKc Ap.crfiTECTji\E ,Hoijse«old Desor^tioiL Bilsir^Ess Atto Theme? of GeSeiV^- 1^t£i\est PRICE, PER TEAR IIV ADVANCE, SIX DOLLARS. Published every Saturday. Telephone ... - Cortlandt 1370. Communications should be addressed to C. W. SWEET, 14 & i6 Vesey St. J. 2. LINDSEY, Business Manager. "Entered at the Post-offlce at New Tork, N. Y., as second-class matttr." Vol. XLVIII DECEMBER 5, 1891. No. 1,238 THREE startling and telling failures, disturbing and menacing the standing and security of the largest three nooney centres of the country, give imperative empha.sis to the demand for the more adequate protection of the credit system. Witbin the short period of a year the reputation of Philadelphia as the most conservative aud safe of the seaboard cities, in its financial dealings, has been shattered; the most astonishing rascality and official indifference disclosed. Boston, hardly less conspicuous in its conservatism, has been rudely shaken by tbe failure of one of its heaviest banking houses. While, close following, a leading New York iiouse has gone down in disaster and dishonor; its balance represented in $d,OOU of assets and liabilities of three millions. Financial centres are but just recovering breath at the natrow escape fiom a serious panic. Yet neither the wreckage of the Keystone, at Philadelphia; the Maverick, at Boston, nor the house of Field, Lindley, Weichers & Co., in New York, are the result of the late stringency nor related especially to it. In yet another light, if we cousider how slight a percentage of the immense business interchange of the country is upon an actual money basis, and how large a proportion rests upou the credit system alone, the need, the necessity of a better, surev and sounder basis for the credit system than at present exists becomes manifest. Whatever be thH objection to governnient interference, whatever the cry against gro whig socialistic tendencies, it is evident that the State, represented either in its Jiatuial or loi.ial functions, must assume a more direct responsibility, with the entail of stricter and sharper supervision, and complete the work which it has so imperfectly begun. In the three prominent instances the year has presented, the fact of inadequate protection of the public against speculators and thieves has been unequivocally stated. It has been demonstrated that governmont examiners do not examine, and thac clearing house associations are no alternative for reUef. For the immediate protection of public credit a reserve fund col¬ lected by taxation or assessment pro rata upon the amount of deposits appears the most effective and feasible. Whether this fund be lodged with the government or with the clearing house associations it matters little. The one or the other then becomes a responsible guarantor to every depositor in the land. The direct responsibility thus entailed insures the most searching scrutiny of bank affairs possible, while each bank made liable for the conduct of every other in return for the absolute protection of its own customers would become not the shield, but the agent for tue detection of corrupt mstituti jus. in 1876—very muoh as it is now. Bonds and stocks were depressed. Investors were scared and would not buy. Tbese bonds commanded only 85 per cent in the market, and the effect of using them in lieu of cash for the payment of the divi¬ dends was nothing more than the selling of $3,476,233 thereof to the stockholders at par instead of to the public at 16 per cent dis¬ count. They are now quoted at above 180. Interest has been reg¬ ularly paid. They have yet fifteen years to run, and there is no better secured bond in the market. Certainly the preferred stock¬ holders have had no reason for complaint. It is singular that roads that are in want of cash for the payment of floating liabilities, addi¬ tions to their properties, new coustruction or new equipments do not adopt the same policy." THIS is the only way the Commercial and Financial Chronicle, in its supplement of November 28th, page 67, answers our questions of November 31st. It says, " In June, lb90, it was voted to authorize $3,635,000 of second mortgage bonds ($5,000 per mile), and $1,5x0,000 was afterwards sold, dated June 80, 1891, but the issue was not known to the public till October, 1891." The sentence is a little clumsy, but we are glad that at last the Ch onicle states things as tbey are ; but it should have added, as it is the fact, that' the stockholders of the Lake Erie & Western R. R. Co. also knew nothing about the issue until October, 1891, and tfais is the meat of their complaint, and of this they will ever complain. THAT expert corporation accountant and write^-, Mr. Cha£>. Bar¬ rett, has in a recent article furnished a strong illustration of our point in criticism of the financial management of the Lake Erie & iTestem Railroad Company. " In 1873,1874 and 1875 the dividends on the preferred stock of tho Chicago, Milwaukee & St. Paul, aggregating $3,476,333, w ere fully earned, but in lieu of the cash which was in the company's hands the amount was paid in newly- created consolidated 7 per cent bonds of 1875-1905 at par. and a great outcry was raised because the St. Paul was paying dividends in bonds instead of cash. The situation was then— A NERVOUS inaction characterizes all the exchanges of Europe at the present time. The panic which took place in Vienna on November 14th was traceable directly to the apprehensive feel¬ ing with which the Austrian bankers and speculators regiirded the present political situation. It is known that the German ])eople are becoming very belligerent about Russia; and it is feared that, despite the pacific intentions of the Emperor, he may be forced into beginning the inevitable conflict. This in itself would be sufficient to keep the markets of Europe quiet; and when, in addi¬ tion to tbis, general business is depressed and credit shaken, the prevailing depression is scarcely a matter for surprise. Neither can any revival of business be looked tor until the present situation has worked itself out. The strain under which the commercial fabric of Europe is suffering acutely must be removed; and the many weak issues on the Stock Exchange lists must be either gotten rid of or else flnd their proper level. Even, however, if nothing occurs violently to disturb the current of events, no very great activity can be expected abroad during the immediate future. In Germany, it is not only the stocks of foreign' countries which are declining, but the values of domestic industrial securities are adjusting themselves to what is apparently to be a seasou of small business, narrow profits and declining prices. France will during the next year be adapting itself to a tariff, the schedules of which have undergone consider¬ able alteration, which in itselt will be a task difficult and of uncer¬ tain outcome. England's manufacturing industries are far from being in a prosperous condition. The exports of that country show a heavy falling from the figures of last year, and the cotton, woolen and iron manufacturers are particularly depressed. Ic is, however, some political thock only which would be likely to pro¬ duce a panic. The depression has come on very gradually and will not culminate for some time yet. THE consents of the property-owners along the route laid down by the Rapid Transit Commission are not coming iu as fast as they ought to. The refusal of some large owners and the hesita¬ tion of many more mean that these gentlemen do not appreciate all that the proposed system will do for cheir property. In the absence of any reliable expert testimony to the contrary efl'ect, Thf. Record and Guids takes it to be settled that existing founda¬ tions will not be endangered by che tunnel. The guarantee of such skilled engineers as tnose who have passed on the plan ought to be sufficient for the most cautious owner of the biggest building along Broadway. If all possibility of danger from this source is excluded, there can be no shadow of doubt whether the interest of a property- owner lies on the side of acquiescence or refusal. A rapid transit system such as the Commissioners propose for Broadway would make that thoroughfare to a greatel: extent even than at present the very heart and core of New York Uity. The fact that the street runs diagonally across the city at a very long angle has been suffi¬ cient in the past to secure its supremacy over every other thorough¬ fare in the metropolis; but, nevertheless, there has always been something of a straining co get away from Broadway. Down town, during the past five years, the capitalists and corporations who could afford to erect office buildings many stories high, have built off that thoroughfare jusc as much as they could—mainly because the present rapid transit lines never ^et nearer to that screet than a block away. Thus property on other streets was to some extent more convenient than Broadway property; and hence it is that, although the value of real estate on that thoroughfare has been strong, there no longer exists che same difference as for¬ merly betweeu the price which it brings and the price paid for land on contiguous streecs. A process of leveling up has been going on whereby Broadway has been gradually losing its marked pre-emi¬ nence. Neither is this true only of the district south of Chambers street. The last two or three years have seen the transferral of much business formerly transacted on Broadway, becween Broome and 14th streets, to the new mercantile district on tbe streets to tbe immediate west; and concomitant with this, there has been a rise of values on tbose side and parallel street:! to a level much more nearly approaching the Broadway standard. A similar proc¬ ess is noticeable in the retail district. The Sixth Avenue Elevated road concentrated on Oth avenue many of the best retail stores; aiu^