Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 68, no. 1748: September 14, 1901

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September 14, 1901. RECORD AND GUIDE. 313 ^ _______ ^_ De/oteD td m- ^^ATE. BuiLDiflc AR-cKitectufie .HousoloiD DEeoF^uiorL Busit/Ess AfiDThemes of GErtERAl.IJftERpsT. PRICE PER YEAR IN ADVANCE SIX DOLLARS Pnbtished eVerff Saturday OommunlcationB ahould be addreaaed to C. W. SWEET, 14-16 Vesey Street. New YorK J. T. LINDSBY, Business Manager Telephone, Cortlandt 1370 "Entered at the Post Offi,oe at New York, N. Y.. as second-class matter.' Vol. LXVIII. SEPTEMBER 14,1901. No. 1748. President MeKinley's death is announced, but still lacks cou- firmation as we are going to press. AN anxious week closes with our doubts and fears revived by tbe latest news from BufEalo, and our desire Is moreto draw sympathy to the suffering President and attention to his many great and good qualities, than to comment on the commercial probabilities that await his fate. "Tho' I may die the grass will grow," says Tennyson, poetically expressing the necessity of the world's practical work going on no matter what tragedy may be enacting. Admitting this, we must point out that the outlook is obscured by the sad event that is occupying all minds, and the situation, previously not any too good, is made worse by it, a fact that is likely to be intensified by a fatal termination to President MeKinley's Injuries. Our recent prosperity was in a large measure due to a commercial political programme that had not been completely carried out, but was in wise, tried and safe hands. For some time doubt must exist whether the task will be finished in the same way that it was begun and this doubt must create hesitation, if not obstruction. IN our own market the ordinary incidents have not been fav¬ orable, though these have not had full play owing to the supporting policy that became necessary last week. Where events have been allowed to work they have reduced values, so that at this writing Stock Market prices are, as a rule, lower than they were made by the break of a week ago. Higher rates for money and further crop damage have been the main second¬ ary unfavorable features, but against them may be set the union of banking interests and the Treasury to hold the situation in hand as much as possible and to make the decline in prices as small and slow as possible. An encouraging offset may also be found in the surprising continuance of large railroad earnings. The circumstances, however, call for considerable further liqui¬ dation, and it is needless to say what the effect of that will be on prices. Europe sends us her sympathy heartily, but is no aid in sustaining values; on the contrary her influences, like those at home, are directed against them. Not only is she a seller in this market, but her banks show a disposition to ob¬ struct and delay a westward flow of gold, though it looks as if that cannot be delayed much longer, if it cannot be said to have already begun through the transmissions from Australia to San Francisco. There is no change in the European commercial sit¬ uation. Business is still a little better than it was in the sum¬ mer, but statistics relating to labor and wages show that the contraction of industrial activity that began a year ago is very considerable and working out -its logical effect on pay. THOSE whose business is the insurance against loss from or the extinction and prevention of fire are naturally the severest critics of modern processes of flreproof construction. One of these gentlemen opened an address before the Engineere' Club of Philadelphia with the amusing and sweeping remark: "There is but one flreproof building in Philadelphia; that is the powder magazine, and it is empty." This reminds us of the ideal fireproof building once described to us by a high authority on fire prevention, which, though made up of bricks and mortar and piled in stories, couldhave been best described by the word mausoleum, or magazine, as the Philadelphia gentleman has it. From the point of veiw of the fire expert, to be flreproof a build¬ ing must contain nothing flammable, or anything subject to easy injury by fire such as glass—in short a tomb, which, like a tomb to continue fireproof, must be sealed up when its contents are stored. This, however, is not the reasonable or practical defini¬ tion of fireproof construction. Buildings used for business and residence must have light and as much of it as can be obtained with reasonable safety. The necessary openings for this purpose render it or its contents liable to attacks of fire from the out¬ side, as was the case of the Home Life Building, and the nature of the furniture and goods generally placed in buildings pro¬ vides the materials for injury to or destruction of the building itself, material flammability or combustibility being simply a matter of intensity. So far as the constructor is concerned he has fully discharged his duty when he has made a building of itself impervious to fire. The rest he may fairly leave to the prudence of the occupants, and the vigilance of the Fire Depart¬ ment. Those who doubt the sufficiency of the modern con¬ struction are fond of pointing out the cases where fireproof buildings have been brought down by the element against whieh they were supposed to be impregnable, but if they chose they could cite many more instances where fireproof construction held conflagrations within very small limits or interposed to prevent the spread of fire among buildings ol old construction and thus averted great calamities. ^ Real Estate Corporations Again. THE Record and Guide has of late freely made the predic¬ tion that the existing tendency in the directions of cor¬ porate ownership of New York real estate would continue to prevail until it worked important changes in the methods where¬ by large blocks of metropolitan real estate were owned and man¬ aged. Some people have interpreted this prediction to mean that these large corporations would force the small operator to the wall; but as a matter of fact nothing further from our meaning. The tendency in the direction of joint ownership is not concerned with the accumulation of large numbers of small properties. It has arisen entirely because larger and larger cap¬ ital is required to conduct the more expensive class of building and speculative operations in this market. There still remains an abundance of room for smaller capitalists to deal successful in real estate, and the frequency with which the names of these smaller operators have appeared in the real estate news of the past few months is a sufficient indication that they are as much alive to their opportunities as ever. It so happens that these small operators have a much larger field for their trading just at present than the small builder; but the turn of the latter will come within a few years. Indeed, if, as seems possible, the Bronx is to be improved chiefly with one and two-family dwell¬ ings, the builder with only a limited capital will have a better chance to operate than he has had at any time since the early years of the West Side movement. Another aspect or consequence of the increasing importance of real estate corporations has been making difficulties for one of our correspondents. He objects to the statement of the Rec¬ ord and Guide that large proprietary real estate trusts would be the outcome of the existing movement on the ground that there is not sufficient margin between the profits to be derived from real estate and the ordinary interest on capital to justify the formation of large proprietary corporations. Such companies would have to pay five per cent on its capital stock, as well as at least four per cent on the mortgage bonds, which it would sell to the public, and the real estate owner, who, unless he is a shrewd and skillful dealer, can get more than five per cent on his property is doing well. It is a fact of common knowledge that a number of large office buildings yield not more than four per cent and sometimes less. What margin, then, is there for the intermediation of a proprietary company that must pay sal¬ aries to its officers, and incur a number of expenses, with which the ordinary owner of real estate can entirely dispense? The answer to this question is sufficiently simple. If small capitalists care to invest in real estate at present, when they are obliged to earn their five per cent by overlooking their property, and attending to many wearisome details, they would surely be willing to accept a half a per cent less, in order to get rid of the bother and anxiety of such man¬ agement, and in a large corporation a half of one per cent on the capital invested ought abundantly to cover all expenses. It must be remembered, of course, that such proprietary corpora¬ tions or trusts would be in the nature of fiduciary institutions. They would not pretend to offer large returns to the holders of their securities. What they would offer would be a safe invest¬ ment, and as large a rate of interest as is obtained from divi¬ dend-paying railroad shares. Such securities would not, indeed, have the speculative chance of large returns, which always gives an increased value to railway shares, but on the other hand, they would be in the way of profiting from the slow but certain increase in the value of New York real estate. It should be added that the success of any attempt to distribute real estate values in this city among a large number of small holders must depend more than upon anything else upon the ability and finan¬ cial standing of their managers. The officials must be both ex¬ pert judges of the value of New York real estate, and at the same time as worthy to inspire confidence in small investors as