Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 51, no. 1313: May 13, 1893

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iSmj 18,18B8 Record and Guide. ESTftBUSHED ^; /A«^CH 51«"^ iase.,_ BtfswiEss Asfe THEMES Uf Ge^r^ 'iii^^^^n PRICB, PER TEAR IN ADriNCE, SIX DOLLARS. i*it&Iis/ied euery Saturday. TBLBPHOKH^ .... COBTI^RDT 1S70, Oonmmn loa tioua should be addressed to C. W. SWEET, 14 & 16 Vesey St. J. 7. LINDSEY, Sttsiness Manager, "Entered at the Post-offlce at Neto York, N. Y., as second-class matter." Vol. li. MAY 13, 1893, No. 1,813 THE little strength that has been seen in the stock market has recalled into use the rusty stereotype phrases about the return of public confidence. As a matter of fact public confideuce is a matter of prices. "When these get very low people will come in and buy irrespective of any value whatever. This has been seen hun¬ dreds of times and wil! be seen hundreds more. The stock most in discredit to-day will probably a few mouths hence be most eagerly bought merely on a supposition that the price will go up and the buyer can get out w^ith a profit before the inevitable collapse comes. The people who control the corporations now enjoying the public opprobrium understand this very clearly. In Cordage the same tac¬ tics are being employed as were em},loyed iu Distillers and in the ease of Eeading to shield Mr. McLeod's little indiscretions. There is a combination inside to keep the outside stockholders ignorant of what has been done or what it is proposed to do. The true facts are only divulged piecemeal and at long intervals when the public mind is occupied with other things. Thougb tbe break in Reading came months ago it is only now its losses in stock operations are leaking out. To a persistent holder of Cordage prominent men who have lent the prestige of their name to the scheme are not ashamed to plead ignorance of its affairs, and the officers of the Company refuse to supply any information. No one will be likely to press the inquiry home, and consequently no one will suffer for the injury that has been done. That prices are now low enough and the outlook good enough to attract outside buying is very doubtful. There are still snarls at home and abroad to be straightened out before thatiwill be the case. The most reliable reports on trade in the West are not flattering. The iron trade is persistently dull, with prices low; in the one branch where there are signs of better demand, (iron-pipe) business is likely to be checked by the advance that has been made in prices. Crop reports cannot be considered satisfactory, even if a larger foreign demand is probable and likely to raise prices of grain. These things continue to influence the stock market. On the other hand, it must not be supposed that there are no encouraging signs in Wall street. All the injury of much that was weak and rotten has been di.ne. There has been a very heavy liquidation, for which the atmosphere is much better and clearer. The failures of the past week were no more than might have been expected to follow the disasters of the preceding ones—the succumbing here and there of a weakling whose esistence has for j long been threatened with destruction by the coming of a stormy day. In the past two days the stock market has developed some rallying power and ability to resist the pressure of, at any rate, profes¬ sional sellers, though it remains to be seen how it is prepared to take any important liquidation of long stock should such be necessary. There is a very strong party prepared to take advan¬ tage of any weakness that may develop. BRITISH investors are beginning to believe that there is no end to the failures of Australian banks. During the past month, in which six important institutions closed their doors, tele¬ grams were received in London daily from tha Antipodts announc¬ ing that the panic had subsided and that the banking busi ness was being restored to its normal condition, but iu spite of these encouragmg assurances one failure has been succeeded regu¬ larly by another. Well-informed observers of the situation are now pretty certain that the end of these disastrous bankruptcies is at hand. All Australian banks have not been conduct¬ ing business upon the same lines. The banks which are most affected are those that have during the past few years been making the greatest efforts to increase their deposits from Great Britain, the reason being that it is they who, in employing these accretions of new money, ministt red most largely to the past " boom," and who, therefore, now that the collapse has come, are biirdened with the largest proportionate amount of unrealizable securities. To this policy of inflation the older and more conserva¬ tive institutions refused to lend themselves. Some of them have a limit for British deposits which, as a rule, tbey do not care to exceed, while others that do not work upon such fixed lines have been chary of increasing their obligations and commit¬ ments in a time of extravagant speculation, of which tbey were shrewd enough to see the ultimate col¬ lapse. In the matter of tbeir cash reserves, too, the older banks are relatively much stronger than the others, and while less liable to a run, are much better able to bear up against one. The more important banks that have failed recently did not in th& aggregate carry a proportion of cash to liabilities much over ISJ^ per cent, while they only held about 6 per cent in available securi¬ ties. It is no wonder that they were unable to bear the burden of any particular strain. In Austria the decbne, which we noticed recently, still continues, being brought about chiefly by the dwind- hng prospects of a good harvest. State loans, however, have not suffered in the least; and this is considered to be the best possible proof that the Austrian and Hungarian governments possess the full confidence of the financial world as to their ability to carry out the important reform tbey have in hand. Hitherto the operation of obtaining gold for the currency reform has beeu attended by a singular flow of luck. A year ago it was only whispered that the amount of gold required might be as much as forty million pounds sterling; and it was deemed impossible that such a sum could ever be brought into Austria. Yet all of this has now been acquiied, except 100,000,000 florins—a comparatively small sum. It is expected tbat in a year and a-half the currency reform will have become a reality. ', IT ia worth noting that despite the monetary stringency and the hesitating feeling that is more or less prevalent in com¬ mercial quarters generally the past few days have been unespect- edly satisfactory in the real estate market. Many brokers have reported to us, with surprise, the conclusion of a number of halt¬ ing transactions which looked very dubious a short time ago, aud natm-ally still more so when the trouble in Wall street began. This increased activity, of course, is probably only a momentary matter and is most signiflcant of the son lewhat independent place which real estate occupies amoug forms of investment. The season is now practically over and any revival of business can necessarily be only temporary. The general note in brokers' offlees is one of complaint. Expectations have been disappointed; but, then, when have expectations not been disappointed? As a matter of fact, the season has been satisfactory, though in one or two sections of the city transactions have been really dull. But, New York has become so large a place and the real estate interests so enormous and so diversified, that nothing but condi¬ tions of the very widest range can affect all parts of it. Dullness on the East Side or iu Harlem may be offset by greater activity on the West Side or downtown, or vice versa. It need not be pointed out that monetary difficulties might create the very kind of conditions that would affect real estate as a whole. So far, as we bave already pointed out, the financial stringency has had almost the reverse of an adverse effect, or perhaps it would be better to say has been accompanied by increased activity, for as a matter of fact the tightness of money has alreadj forced more than one operator to restrict his holdings, and the sales whioh brokers have succeeded in carrying through this week are the result of negotiations started some time ago. Any increase of unfavorable monetary conditions must be more or less detrimental to real estate, and conservatism is the best security against dis¬ aster until it is possible to see a little further ahead than even the most astute can just at present. ' SPEAKING of the '* season," in the foregoing, reminds us of the change which has occurred in the real estate business within recent years. Five years ago, indeed, perhaps not so far back, there was a very clear demarcation between the seasons. The rent¬ ing period came within very definite dates and the broker could almost calculate to a week when the main part of his transactions would be closed. Within the last two years, the tendency has been to blur these lines. The seasons are beginning to overlap, and for a very much longer portion of the twelve months than formerly, the real estate broker must be on the alert. The renting season, for inscance, has been in part transferred to the fall, and it will be' remembered that last year, almost before midsummer had passed, buyers turned their attention to West Side property, and good business was done while the thermometer stUl stood somewhere about 90 in the shade. At this present time of the year, three or four- years ago, the languor of summer pervaded the offices of our principal brokers, but to-dayi as noted above, agents are busy closing a number of good transac¬ tions. As our gossip columns show, the movement is general. It is not confined to any one class of property; but, as will be seen, the East Side is particularly favored. Indeed, the East Side seems to have past out of its evil days and is again receiving the attention of