Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 32, no. 811: September 29, 1883

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September 39, 1883 The Record and Guide. 729 THE RECORD AND GUIDE. 191 Broadway, N. Y. TERMS: ONE YEAR, in advance, SIX DOLLARS. Communications should be addressed to €. W. SWEET, 191 Broadway. J. T, LINDSET, Busineag Manager. SEPTEMBER 29, 1883. The Lesson of the Failures. The great liquidation continues. Prices steadily decline through¬ out the commercial world, As Mr, Groschen, the English states¬ man, proved in his remarkable address delivered in London last April, since 1873 the price of nearly all commodities dealt in on all the markets of the world has declined from twenty-five to thirty-three per cent. He also pointed out that this great shrink¬ age will continue to the advantage of persons with fixed incomes and the creditor class, while it will press with terrible severity on debtors and the entire business community. The advance in prices, produced by resumption, which added all the gold and silver to the paper previously afloat, relieved this country for several years from the effects of this general depression in values, but the reaction began with the death of Garfield and the crop failure of 1881. Then came the dry rot iu railway securities, which has continued down to this day. General business also has been suffering by the gradual cheapening of every product dealt in on all the exchanges and markets. When the lowering of prices produces its natural effect in bankruptcies, the newspapers all unite in declaring that each particular disaster is due tc special causes. One firm is ruined because it speculated, another because it endorsed too freely, another, it is claimed, has over-produced. These are the various causes assigned for the Shaw leather, the Mayer, Levy, and other failures, but the true reason at the back of them all is tha difference between the cost of production and what the article could be sold for iu the market ; in other words, because of the shrinkage in the values which commenced in 1873 and has continued down i;o the present time. Everyone in trade knows that prices were never at so low au ebb as they are to-day except in periods when a panic prevailed. Mr. Goschen, Mr. Gibbs, ex-Presideat of the Bauk of England, the Rothschilds in Paris, and other farseeing bankers attribute this shrinkage to the practical substitution by the commercial world of the gold unit of value for the double standard which prevailed previous to 1873. The yardstick by which measures are valu&l haa been shortened, for since the substitution of the gold unit the supply of the yellow metal has fallen off. Neither California, Australia nor any of the old goldfields furnishes the abundant sup¬ ply which so stimulated prices from 1848 onward. Gold has had to carry the burdens of all the commerce of the world at a time when its volume was relati-vely decreasing. It has been proved beyond all peradventure that from 1876 to 1881 the production of gold has been only $669,528,689, while there have been used in coinage and the arts in the same period $979,907,785, or $310,379,- 096 more than was produced. Hence the steadily increasing value of the yellow metal. It was in 1873, it will be remembered, that lhe United Statea and Germany discarded silver; since then Hol¬ land and Italy have adopted the gold unit -of value. It has required positive legislation in all the commercial nations to bring about this disastrous shrinkage in prices, which is causing the bankruptcies about which we are now hearing so much, and which will continue to keep on ruining those engaged in active business. It is a curious circumstance that the press of New York, which has vigorously denounced bi-metallism and has opposed every effort to bring silver into use to relieve the pressure on pricea, are themselves Uhe victims of the financial policy they have so strenuously advocated. The World, Tribune, Times and Herald have been conspicuous in their denunciation of all legislation which looked towards relieving the business distress by using silver as well as gold. It must be confessed that their advocacy of mono-metaUism was not very intelligent, but it was undoubtedly sincere. I'hey were so zealous and even bigoted that they would not give the bi-metallic side of the controversy a chance to be heard. In justice to the Tribune, however, it should be acknowledged that it allowed the late Thurlow Weed to publish a number of letters in its columns correcting the views of its editor¬ ials on this question. It will be a matter of astonishment to the proprietors of these papers to be told that the recent reduction in the price of their journalsjis primarily due to the acceptance by the commercial worldjof^the fgold mono-metalliem they advocate. ' But the price of their papers has been forced down by the same general causes which havo been at work in the stock market, cotton, grain, wool and all departments of business. The Real Estate Situation. October is the real commencement of the fall season for business. A survey of the real estate situation is, therefore, uow in order. The situation may be summarized as follows : 1. In the judgment of the leading dealers in Pine street the liquidations now going on in general business will not materially affect real estate prices this fail. Holders are firm and there is no pressure upon the market. The experience of all past specula¬ tive eras shows that as real estate is the last to go up it is aJso the last to go down in value. 2. Aa there has been no " boom," so called, in city property, the reaction when it comes cannot be very great, Down-town improved realty may show a falling off in values on forced sales, because of the depression in general business. Office buildings have become too numerous for the present needs of the lower part of tbe city, and may take some years to utilize them all. 3. There is a ready aale for housea costing from $15,000 to $30,000, provided they are well located and desirable, but the class who wanted $40,000 to $80,000 houses are just now crippled and are not in the market. There are not, however, enough of very high priced houses. 4. The building of apartment houses haa also been overdone tem¬ porarily. As our table shows there are many unrented suites of rooma in the first-class flats. The same remark is true of third and fourth-class tenement housea. 5. Tbere are very few unrented houses suitable for private dwell¬ ings in thia city. There haa been no atatement in rents ; indeed, in some favored up-town localities there has been slight advances. The demand is unusually large for houses renting for one and two thousand dollars per annum. To sum up the real estate market, it may be quoted strong but dull. No one expects au advance in values nor will there be any serious decline. New people arc constantly coming to the city and all houaes and desirable apartments are in steady demand. New Down-Town Buildings. A greediness that defeats itself has always beeu tbe besetting sin of the New York speculative builder. It seems lately to have taken possession of the owners of down-town property with peculiar tenacity. As the new building of the Mutual Insurance Company advances it is seen what a mistake it is to set a building of the dimeuaions and proportiona of this on an alley, and Naasau street ia little more than an alley. If the owner opposite chooses to put up another ten- atory building, he will, of course, make the fifth story of the Mutual building nearly aa dark as the ground floor of the ordinary Nassau street building, and the stories beneath will get still leas light. If Nassau street had been widened three or four years ago, when the necessity for the widening had become evident, and the immment elevator buildings had not yet been actually erected, the widening could bave beeu effected at a comparatively moderate cost. The Mutual Company might have protected itself by setting back its building with a plaza in front of it, so as to secure an ample light on at leaat one side, and would probably have found this sacrifice pay in the increased attractiveness of its build¬ ing to tenants, even if the city had not assumed and assessed upon the adjoining property some portion of the cost of the improve¬ ment. We made remarks to this effect before the Mutual building was begun, and the justice of them must now be evident to everybody. Instead of withdrawing their building, the Mutual people have apparently encroached with their portico several feet upon the sidewalk. The result practically is that a building as high as the Mutual opposite would deprive the lower half of it of light. Architecturally the building will be thrown away, since it cannot be seen from anywhere. From a point of view directly opposite the cornice will be at an angle of 75 degrees, more or less, from the spectator, who is not likely to run the risk of dislocating his neck to admire it, but will pass it with the reflection that so big and ornate a building in so narrow and dark a street is a monument of folly. All this is not to be imputed to the architect, of course, whohad to make the best of a very thankless problem. He could do noth¬ ing in general composition that would be effective with a building any front of which could not be fairly seen all at once from any point of view, for the side streets are quite as narrow as the street along the front. Really it seems that the only thing to be done was to make the openings as big as possible, to have the detail of the lower stories, which can be fairly well seen, as attractive as might be, and to let the architecture go at that. Aa a matter of fact, so far as it has gone, the building is unusu¬ ally massive; that ia to aay, the proportion of opening to wall is