Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 51, no. 1296: January 14, 1893

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Janaary 14,1898 Record and Guide. 85 ESTXBUSHED ^^N^ARCH 21*^^ 185ft. ^ fipbltO TO RfA^ ESTWE , SuiLDlf/o A;B,CrilTECIdI^ .HoUSClJOUl DeOOR^TWiC PRICE, PER TEAR IN AOTAIVCE, SIX nOLLARS. Published every Saturday. ThlephombI .... Cortlandt 1370. OonuQTiDlcatlonB should be adilreseed to C. W. SWEET, 14 & i6 Vesey St. J, 7, LINDSEY, Bimness Manager, "Entered at the Post-ogtce at New Ywk, N. Y., as second-olasx matter." Vol. LI. JANUARY 14. 1898, NO. 1,391 THERE haa been p;ood buying in tbe atock market in the past week, wfiich augura well for prices in the near future, though it cannot be eaid that the advance of an industrial specialty in a few hours more than can be seen in a good raih'oad stock in as many weeks, or that rush on the Exchange and quiet in the commiaajon houses are the best ground-work for a bull movement. Manhattan has been thu leader, and its advance has been made permissible by the large withdrawals of stock from the market through recent inveatment purcbasea. The price is now much higher than it was in 1887, and the thought arises whether it has not discounted for the time being all the benefits that can accrue to tbe stock, even though the Manhattan Company is the only organization n the field capable of aupplying this immense population with rapid transit facilities, aud whether buyers at this stage may not be fooled aa were the, buyers of Reading in the sixties. It may be said that the cases are not the same, which would be true, but it cannot be denied that the tactics of the manipulators are the same, or that tbe temptation to create a reaction m tbe speculative mind is proportion to the size of an advance. Tbe real event of the week and the one that baa brought iu moat of the business from tbe outside waa tbe withdrawal by the Bank of France of its special terms for gold and the consequent failure of the exporting houses to ship any. This shows clearly that if the currency trouble could be removed there would be a rapid appre¬ ciation in the value of aecurities especially as money is piling up in the banks under the flow from the interior. LONDON brokers have been complaining of dullness in the stock market throughout tbe past year; and the complaint is uot without foundation—particularly as regards speculative business. The volume of investment business proper has been by no means small. Ir fact it appear.s to have been enhanced by this very cur¬ tailment of speculative dealing. The effects of the shock which credit received in the latter part of Ifi90 are still distinctly traceable, being tbe more jirolonged because they were not allowed to work themselves out naturally at the time, and now, on looking back over 1892, one sees plainly enough that people have been cautious, sometimes to tbe verge of nervous¬ ness throughout the whole year, aud that their capital, removed from South American securities and the kindred concerns, such as trust companies, which were involved in tbe vortex of the Baring collapse, and removed even from classes of securities which, although not connected with South America, are still of a more or less speculative nature, has sought safer channels in securities of a sound description. The general business of the United Kingdom does not present the same encouraging features which the share market did. Exports have steadily declined, the home demand fell off and not until tbe very close of the year did any signs of a revival show itself. Tbe English iron and ateel tradps during 1R92 have fared even worse than they did during 18!l . The features of these industries have been a continuous tall of selling jirices, a large reduction of output, due partly to tbe lessened demand from outside sources, and partly to the accidental circumstancea. such asthe great atrike of the minera in Durham, which compelled a suspension of productive operations—a generally keener competition on the part of continental countries, an almost complete collapse of the demand for railway iron, and a high coat of production relative to the reahzed selling prices. Nearly all these conditions have in a measure been duplicated in other induatriea. In Paris, notwith¬ standing the drop in securities since tbe explosion of the Panama scandal, the year of 1893 was not generally unfavorable to prices, with, however, some notable exceptions, adversely influenced by special circum¬ stances. French 3 per cents which, after gaining seven points in 1890, had remained stationary in ISol, beginning and ending tbe year at about 95, touched par more than once in the last quarter of lt-9!i, and still show a gain in spite of the recent reaction. In tbe commercial world the event of the year was the application of the new customs tariff. So far its effects have been disappointing. The increased revenue from duties has been only partly realized, and the measure has encountered a resistance in foreign countries for whichthe protectionist promoters of the tariff were not prepared. THE ealH of the franchises of the new street railways on 9th avenue and Lexington avenue are another illustration of tbe reckless way in which the city's property is still disposed of. In the first place the terms of the sale were such that the only possible competitor was the Broadway syndicate or some company con¬ trolled by it. No one, however, can blame the local authorities for making these stipulations, because tbe Broadway syndicate is in a position to give a better service to tbe public than is any other cor¬ poration. But this fact does not make the sale any less farcical. In both caaes it waa stipulated that ultimately the pur- chaaera of the franchiae should pay to the city 5 per cent of the gross receipts of the road; and in both cases a mock competition took place, invented, doubt¬ less, to give tbe purchasers a better title, which resulted in the city's obtaining a quarter of 1 per cent more than 5 per cent. Why, may we ask, was the percentage of the city placed at auch a figiu'e ? What reason had the Comptroller to suppose that the fran- cliise was worth juat f* per cent ? Why this discrimination against 4 or 6 per cent? There ia a story extant about a broker who sat down in a barber's chair in a very absent frame of mind to have his hair cut. "How much shall I take off':"' aaked the barber, " Ob 1 5 per cent I suppose," answered the broker, abstractedly. One might almost suppose that a'aimilar prejudice in favor of that figure exists in the minds of corporation lawyers andfcity officials. Companies wanting franchises are always expected to pay 5 or, perhaps, 3 per cent for a privilege. Nobody ever asks what the real value of tbe franchiae is, or how much tbat value may be expected to increase as the city increases in population. The Pythagoreans used to believe that certain numbers possessed a mysterious potency; and it would aeem as if their traditions were still alive in New York City during the month of January, 1893. Asa malter of fact, however, this superstitious reverence of 5 per cent ia not inexplic¬ able as it aeeoia. In truth, nobody knows what these franchises are worth. Their value varies enormously according to the length of time iu which they are operated. Our city officials, knowing nothing of the value of the property which they are selling, put down in the contract the first glib percentage that suggests itself. Let us hope that some lime they will cease arbitrarily to " take off 5 per cent." The only way in which the city can get value in full for such privileges, or anything near ic, is to keep the franchises in its own possession. Our street railways serve the same function as our streets; and they ahould as Uttle be allowed to pass into private hands. WHILE fear of intrusting the expenditure of so muob money to Tammany is the ostensible basis of the opposilion to the construction