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Real estate record and builders' guide: v. 16, no. 406: December 25, 1875

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Estate Record AND BUILDERS' GUIDE. Vol. XVI. NEW YOEK, SATURDAY, DECEMBER 25, 1875. No. 40fj. Published Weekly by THE REAL ESTATE RECORD ASSOCIATION C. W. SWEET...............Pbesident and Tbeasubeb PEESTON I. SWEET... w......Seoketaby. L. ISEAELS.........................'Business Manageb TEEMS. OWE YEAR, In advance....$10 00. Communications should be addressed to C. "W. ©TVESETs Nos. 315 AND 34.7 BeoaD-WA-T. THE CRISIS IN REAL ESTATE. IV. , The Eeal Estate Eecoed lias in previous ar¬ ticles sketbhecl many of tlie ca-ases that have produced the present stagnation in the real estate'market. In preaentiiig these causes,-we have torn off the mask that has heretofore veiled the doings of the land speculators lo the unwary outsiders. For this we have been abused in some quarters, but have received abundant praise in other directions. With an honest de¬ termination to discharge our -whole duty as journalists toward that great class of investors who looii to this journal as the true and only exponent of all that pertains to the real estate market, its past and present history, we continue to-day to re-view additional causes that have aided to bring about a state of affairs decidedly without precedent in the annals of New Tork. The effect of this plain speaking on the part of The Eecoed has been thus far that, -while for months past not even the slightest interest -was taken in the market, while a complete lethargy overhung everything connected with real estate, we now hear of re-viving interest on the part of solid capitalists and renewed inquiry about the state of the mjarket and the probable price at which certain jjieces of property can be bought. Those who still preached their in¬ flated ideas have lowered their, tone and are resigned to look stern facts in the face— facts such as are daily demonstrated by the foreclosing process of leading operators of the past, by the widespread ruin among those over¬ loaded "with vacant property,.and the failure of upto-wn banks built upon the hopes and not the cash of blatant speculators. While the field is thus being cleared for renewed activity at low prices—siire to follow the pressnt stagnation— we will do our share toward preventing the re¬ currence of methods and tactics that forever must be eschewed in the sale and transfer of property on Manhattan Island. We have had enough of Wall street tricks in the real estate market in the past. In the future, let the honest investor, when he lays down his hard- earned doUars to buy himself a home, be satis- fled that tie people he deals -with are as solid as the. ground he seeks to acquire. The real estate of a vast and growing city is not a field for the play of imagination, as are the shares of some distant -wild-cat concern. It is too "real," indeed, as those have by this (ime found out to their sorrow who in the past have placed faith in the predictions of would-be "keen and shrewd" operators. BEOKEES AND AUCTIONEEES. We have in the Beal Estate market a number of these gentlfemen, the large majority of whom are honorable, conservative business men.- They are a credit to ova community, and have earned their positions by long years of faithful service. There are,- however, a number of speculative and reckless brokers who mistake their calling. Wall street is their proper field, and not Pine street. They are an incubus on the market, and think they can handle a block of solid upto-wn lots and cram them down the throats of in¬ vestors -with the same ease as if they had 40.0 shares of Erie to seU. Not that these men fail in perfecting transactions, but their nonsensical palaver about matters they do not understand, their ignorance of a trade that requires the most thorough information—their ever bullish ten¬ dencies are enough to disgust any one com¬ ing in contact with them ; and they virtu¬ ally injure the business of the legitimate broker, who unfortunately is classed with them by the uninitiated outsider. How they ever expect to earn their daily bread in the Eeal Estate market, as it is to be conducted hereafter, is a mystery we cannot fethom. The practice of knocking property do-wn to Mr. Smith or Mr. Jones without selling it is fortun¬ ately not so common among the auctioneers as in times past. Indeed many of the most promi¬ nent among them, even when the owner instructs them to knock it down, nowadays willingly voluSteer the information that the property is not disposed of. Still it would be far better if the rules of the Exchange Salesroom should requite each auctioneer to loudly proclaim the name of the buyer. Then those interested can readily ascertain for themselves whether the property has been bought in or disposed of. Some auctioneers do so now, and we trust all of them will do so whenever the "plaintiff in the suit" shall be no longer the ubiquitous buyer at the Exchange Salesroom. POOLS AND ErsrGs, During the speculative years of-1870, 1871, and 1872 there were several ''real estate pools" and rings. . They were a great lever in the hands of those working for inflated prices, and they must be remembered with chagrin by those who participated in them. Immense operations, as if by syndicates, -were conducted by them,'some parties having a fourth or an eighth interest in the pool, others having one as low as a sixteenth. Of course there is a far greater stimulus to pur¬ chase when there are a number of buyers joining one another, than if-the property, is offered to single individuals. When the crash comes, the burden is finally thrown upon the strongest and most responsible of the "pool." At first he has to bear the brunt of the entire transaction, keeps on paying interest on the mortgages, while his partners have defaulted, until at last he is him¬ self driven to the wall. When it is remembered that the parties originating these pools have taken in retired merchants, who considered themselves dealing in staple values, and now find themselves ruined, the nefarious charac ter of such schemes ought to warn future in¬ vestors against all propositions like these. The game class who in the past hare been con¬ stant promoters of pools were also dealers in "points." They always have a "point," as in Wall street, and for that "point " they used to get their one-ststeenth share of the pool. If the speculation fails, the parties participating are loaded with mortgages and ironed for any other business they may be engaged in, thanks to the man with his "point." This pool business is done on contract and is binding, sho-wing that WaU street tactics transplanted to Pine street are extremely dangerous. Before concluding this chapter we must not omit to sketch some of the subtler aud more in¬ sidious artifices df^the speculative campaigners. These are the rumors and inventions they spread through the market. The prospective erection of a church, a hotel, or other large structure, although the land may be unpurchased and the | plans unformed, affords a first-class basis for ae- i tivity and enhancement of values in the estima- / tion of these gentlemen. Property lying adjacent to the imaginary im- ■provements changes owners, profits are reaped, and commissions earned. The rumor serves its puj"pose, even though the contemplated struc¬ tures never appear. The Industrial Exhibition building, the new Episcopal Cathedral, and that unfortunate waif— a Central Park Hotel—are apt illustrations of our idea. That other creature of the imagination on which we here bestow no stronger term than invention embraces assurances of large purchases in certain localities by leading operators, foreign capitalists, or builders. The | contemplated opening of streets, boulevards and parks, aU clearly displayed on paper, but doomed \ to have no other existence—these and kindred ^ devices are sufficient to start the nimble feet and unloose the facile tongue of operators. The ' strong delusions which periodicaUy or chronic¬ ally take possession of the real estate devotee are subjective faults of his ardent nature, bom of civic enthusiasm or a profound conviction of the inestimable value of eveiy cubic inch of Manhattan ground. Calculations of the annual increase pf population enable the real estate seer and prophet to determine how many square inches of land -wiU be aUotted to each inhabitant attM the lapse of a given number of years. _ Compjirison of values, with; pyercroyirded and feudal Eoropeau cities has fui'oished the stapl^