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Real estate record and builders' guide: v. 80, no. 2063: September 28, 1907

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September 28, 1907 RECORD AND GUIDE 471 ESTiaiJSHED-^ftWpHsm^iaee. Dn&ĩtí) p RfAJ.EsTAre.BU]LDIffc ft;pCiíITEeTvn^,K0USEtí0U)DE(KBÎ&n0lí, Si/sĸfess aiídThehes of'GEíÍERAl Ijírenpsi., PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Comniunications sliould be addressed to C. W. SWEET Publisfted EVerif 'Satarday By THE BBCORD AND GTJIDE CO. Presldent, CLINTON W, SWEET Treasnrer, P. W. DODGB Vice-Pres. & Genl, Mgr., H. W. DESMOND Secretary, F. T, MILLER Nos, 11 to 15 ĩlast 24th Street, New York City (Telephone, Madison Square, 4430 to 4433.) "Enteretl at the Post Office at New York, N. Y., as accoiitl-class matto:" Copyrlghted, 1907, by Tĩie Record & Guide Co, Vol. LXXX. SE'PTBMBER 28, 1907. No, 2063, INDBX TO DEPARTMENTS, Advertising Section, Page. Page. ílement ......................xvli Lumber .....................xxii Clay Products ................xix IVIachiĩiery ...................viii Consulting Engineers .......xviii Metai Work ................xvi Contractors aud Builders ......iv Quiclt Job Directory..........xĸii Electrical Interests ..........ix Real Estate ....................xi Fireproofing ...................ii Roofers and Roolĩng Materials.ix Granite .......................xx Stone .......................xx Iron and Steei..................x Wood Products ..............xxiii THE receivershiĩD of the New York 'City Railway Coin- pany will, it may be expected, cut the knot of a dif&- cult situatiou, wliicli it was beyond the power of financial ahiiity to unravel. By nieans of a receivership it should he possibl^ to ainiplify the organization of the surfaee- car lines in Manhattan, reduce their flxed charges to a figure justified by the earnings, and provide the nioney for necessary improvements. One cannot predict as yet with any certainty that these results will be achieved in a year or two, hecause litigation may intervene and delay a satisfactory settĩement; but a solution of this kind cannot be delayed for long. The plain fact îs that the street-car lines cannot earn their ũxed charges, and the interest of tĩie creditors aiid stockholders of the companies will be benefited by a reorganization, which will do away with the piling up of a deíĩcit iu order to declare a dividend. Manifestly, also, the interests of the public who use the cars wĩll also be beneflted by a receivership, for the company should emerge from its legal dilficulties in a much better situation to fulfil its responsibilities. Why is it that a cor- poration, controlling all the surface-ear lines in the most densely populated Eorough of New York City—-why is it that such a corporation should be unable to meet its liabili- ties? This auestion cannot he fully answered nntil after a complete ofRcial investĩgation has been made; but the salient eonclusîous which such an investigation will justify can already be sketched. In the first place, the business of consolidating the street railways of Manhattan and of trans- Eorming them into electric roads, while it was extremely profitable, was also extremely costly. The exĩsting fran- chises and properties were acquired at high prĩces, which were represented by flxed charges on the earnings of the consolidated company; and the purchasing corporation was subsequently obliged to raise more money for improvements hy the same means. Furthermore, it is apparent that' the men who brought the eonsolidation about were not above the good old practice of milking the corporation for their own benefit. To a lai'ge extent these heavy expenses in- eident to consolidation could not be avoided, but if the com- pany had been managed scrupulously in the interests oE all its stockholders they could have been very much reduced. The object of the directors of the corporation was to bond the company and its subsidiary eorporations for just as much as they could; and they undoubtedly increased the capĩtali- zation more than was necessary. OUESTIONABLE flnancial methods were used by the or- ganizers of the Metropolitan Corapany from the very start; but this fact did not prevent their operations from being in the beginning brilliantly successful. The stock in the company was selling about ten years ago for over 200, and its prospeets were apparently of the brightest. Its earn- ings had been increasing steadiiy and largely. The improve- ment in the service, consequent on the eleetrification of the lines, enabled the trolley cars to attract many passengers from the eĩevated roads. The trafflc on the elevated roads decreaaed for ;.; number of years, while that on the surface liiibs was iicrcasing at a ratio out of all proportion to the growth of thc population. It was this extraordiuary suc- cess at thc outset whích proved to be the uudoing of the comi)anv. its directors assumed' that its earnings would continue to 'iicrease at much ĩhe same ratio, and all their finajicial pians M'ere based upon sueh an expectatton. They did not reaiizo tbat the large increase in trafBc was due in part to exceptional eonditions, which would not and did not enduro. Aa a 'natter of fact the change came very soon after the late Mr. W. C. Whitney sueceeded in buying in his last competitoi', which he did in 1899- The surface lines wer í obliged to compete first with a very much improved service on the part of the elevated roads, and later with the Subway. ifi thĩs w,iy many passengers were diverted from the !i,uvface cars—-passenfe'i's which these cars would never have obtaĩned in rase tlie wo;k of giving^ Manhattan really rapĩd transĩt had been undertaken at an earlier date. Even this increased competition, however, is not suflicient to ex- plain the faet that for flve or six years the earnings of the street-car iines have been practically stationary. No matter what the competition for long-distance traffic, the surface cars would have been fully compensated for its loss by the increase in the more profltable short-distance traffic—pro- vided they could fiave maintained the quality of their own service, The failure of the company has been due far more to a deterioration in the efficiency of its own service than an improvement in that of the rapid transit roads. This was a contingency on which the finaneîers of the old Metro- politan Company never counted; and ít is the contingency which is chiefly responsible for the present receivership oE the system. I SĩNCE 1901 the increase in the general street trafflc in Manhattan has been enormous. During that period the amount of business transacted on the island was not far from doubled; and the number of vehicles using the streets has increased almost to a corresponding extent. It is this condition which has made it impossible for the City Railway Company to improve its service, or even to main- tain its old efficient standard. Their cars are subject to many more delays; and during the winter months it is im- possible to niove a suffieient number of cars past certain important points of intersectĩon. The embarrassment, which the officials 'of the company have experienced in running its cars is, as the Record and Guide has frequently pointed out, the ehief reason for the deterioration in the service; and this contention has been fully justifled by the testimony offered to the Public Service Commission. The pĩain fact is that the street system of the Eorough of Manhattan is whol- ly inadequate to the traffic it is oblĩged to carry; and the New York City Railway Company, as the most important business concern using the streets, has suffered from it more acuteĩy than any other ĩine oE business. Eut in the course of time other lines of business will suffer in a similar way, because the congestíon of street trafiîc is j'ust as sure to be- come more acute as is the business of Manhattan to become more abundant. IP THE POREGOING description of the reasons for the receivership o£ the New York City Railway Company is true, they justify certain important references. The most important of these inferences is that the service offered by the company to the public will not be materially improved by a financial reorganization, or by the aimple expedient of running more cars. The only effectuaĩ means of improvîng it will be to make arrangements which will enable the traffic to move more freely. Much can be accomplished în this respect by means of.traffic regulatious, such as have been suggested by the company's officials; but even auch regula- tions will be an alĩeviation rather than a cure. The traffic eonditions will never be radically improved without a re- planning in certain essential respects of the street system of Manhattan. Of eourse the city will never undertake the portentous taak of laying out a new street system for the beneflt of the City Railway Company, but eventuaĩly it will be obliged to undertake it for the beneflt of every corpora- tion, firm or individual who use the streets for other than pedestrian purposes.