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Real estate record and builders' guide: v. 73, no. 1887: May 14, 1904

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May 14, 1904. RECORD AND OUIDE IIO9 J« -gy- "i ESTABUSHED-S$/tfAR.CH21M^1868. De/OTED to f^L EISTATE. BUILDI/Jb ^RCJflTECTl/RE ,h(oiJSElfOLD DEGOfiATIOtl, Busit/Ess Alio Themes OF GeiJer^I IrJiEi^Esi. PRICE PER YEAR IN ADVANCE SIX DOLLARS Published eVertf Saturdas Communications should I C. W. SWEET. 14=16 Vese J. T. LINDSEY, Business Mana^-er . adilrossod to ■ Street, New Yort Tolephono, Cortlandt 3157 -Enln-ed at Ihe Post Offia ? al New Tork. N. T.. as s evond-class matter." VoL LXXIIL MAY 14, 1904. No. 1887 THE stock market has been suffering this week under an accumulation of bad news; and it is no wonder that prices have staggered. The winter wheat crop, it is admitted, is much below the average; gold exports have been continuous and heavy; liquidation has been taking place in Steel securities, plainly indicating a fear on the part of the trade that earnings will not be sufficient to maintain tlie present dividend rate; and railroad earnings have almost uniformly shown decreases. All this has had an unsettling effect and has enabled the bear opera¬ tors to depress prices. There has been no evidence, however, of liquidation, except in Steel shares; and considering all the cir¬ cumstances, there have been fewer and smaller recessions in prices than might have been expected. The truth is that the effect of less active business upon railroad and other earnings has been already pretty well discounted, and unless business be¬ comes very much worse than it has been there is no par¬ ticular reason to expect any serious liquidation. It is not to be supposed that under the circumstances prices will advance, but on the other hand it will require worse news than any which has yet developed to lower them much further. A tolerably com¬ plete crop failure miglit do it; but iu the absence of dearth among the farmers it is tolerably certain that the worst that can happen until after the election is a slow aud waiting market. It has heen the prosperity of the farmers which has pulled the business community through wiiat might have meen a much graver financial crisis, and if that prosperity continues, as it well may in spite of the probable failure of the winter wheat, a general recovery is the probable event easily next year. ONE could write a description of the rear estate market of the weeli before last which would apply, word for word, to the real estate transactions of the week just finished. There is the same slight diminution in the number of transac¬ tions compared with those of April, the same preponderance of tenement-house trading, the same slack demand for private dwellings, the same fair demand for vacant lots, and the same absence of individually interesting and novel transactions. It is improbable that any further very important operations will be consummated during the present spring. There are plenty of projects afoot, but their progenitors have apparently reached the conclusion that they can buy and build cheaper a year from now than they can at present. In this we believe them to be mistaken; but the delay will do no harm. A moderate amount of building activity is assured for the present year, chiefly in the cheaper grades of houses and it is to be expected that throughout the summer and fall a steady stream of flats and ten¬ ements will appear in the records of the Building Department. This branch of constructional activity will increase rather than diminish as money becomes easier to borrow, for renting con¬ ditions warrant practically an iudeflnite amount of it. This fact will keep up the demand for vacant lots, while at the same time the trading in tenement-houses will diminish. In the meantime in case the labor situation continues satisfactory, con¬ ditions will be brought about which will be all in favor of very lively activity next winter. THE proposals submitted to the Rapid Transit Board, at its meeting last Thursday, for the construction of cross-town ■ moving platforms to be operated in connection with the system of the Interborough Company, makes the competitive position of that company very much stronger. The weak points of the offer of the New York City Railway Company has always been (1) that if transfers were issued from its cross-town surface lines to its longitudinal tunnels, those surface,, lines, already very much congested, would become intolerably so, and (2) that the Lexington Avenue-Broadway route wouM practically duplicate the existing tunnel from 42d street south/and would so far be a waste of money. Very certainly two subways, one running along West Broadway, Seventh avenue and upper Broadway, and the other along Elm street, Fourth avenue and Lexington ave¬ nue, connected hy moving platforms at the important cross- town streets, would constitute a very much better planned sub¬ way system than a Broadway-Fourth avenue and Elm street tunnel operated by one company and a Lexington avenue-Broad- v.-ay-West Broadway-Seventh avenue and 34th street tunnel operated hy the oLher. The transfer privilege from the surface cars would not compensate the city for such an inconveniently operated and wastefully planned system—particularly when the Interborough Company can offer transfers with a system of cross-town moving platforms. In our opinion the Interborough Company has now the best of the bidding, and the New York City Railway Company should raise its list of attractions. It should offer, that is, to include a four-track First avenue tun¬ nel in its system, as well as some provision for rapid transit along Jerome avenue. The Bronx has a right to protest against the neglect with which it is being treated in the plans of the Commission. It is entitled to a Jerome avenue line, and to better provision for express service from the Harlem River south. The Value of Business Stability. (^ NE difference lietweeu a mature and a comparatively imma- **-^ ture business community, is that in the case of the latter there is a great lack of business stability. For a period of sev¬ eral years industry and commerce will be exceedingly profitable and its volume will increase enormously, but the very excess of profits and the large volume of transactions tend to produce con¬ ditions which eventually bring about an equally severe reaction. Of course, the tide of industry and commerce waxes and wanes also in countries whose business habits are more completely formed; but the changes take place within narrower limits. While the periods of prosperity are less of a feast, the periods of depression are less of a famine, and the business of a country naturally struggles towards a condition in which the inevitable fiuctuations of trade do not become too severe. In a rapidly growing country, such as the United States, the business oppor¬ tunities have been wonderful and have enabled many men to accumulate prodigious fortunes; hut if one could see equally clearly the other side of the shield, it would be found that the failures are more numerous than the successes. The wreckage is much larger than it is on the smoother seas of a more fully developed industrial condition, and it is only the instinct of self-preservation which forces the business men of a country to get away from business methods and habits which balances such a year as 1872 with a year like 1873, or an 1890 with an 1893. There can be no doubtthat the period of high profitsand volum¬ inous business which culminated in the spring of 1903 had man> of the old fatal characteristics of a "boom," The difficulty about a "boom" is that under the infiuence of the opportunities and the excitement it affords the usual conservative business motives fail of their effect. An increase in prices does not di. minish the volume of business as much as it should, because, business men find it easy to figure out that the opportunities being what they are, they can make money in spite of the higher prices. The enormous business of 1902 had just this character. In spite of the high rate of wages and the high price of supplies of all kinds, the raih-oads found it impossible to retrench either in their operating expenses or in their outlay upon improve¬ ments. The enormous business which was offered had to be carried at a higher cost, and the improvements, also, were ne¬ cessitated by the volume of traffic. The management would doubtless have been glad enough to postpone these expendi¬ tures at least in part until a period of cheaper labor and sup¬ plies; but they were unable to do so. The traffic which was being offered demanded that money be spent freely all along the line. At the same time these prices were so high that at the first sign of any diminution in the volume of business, pru¬ dent managers would cut down their expenditures in as drastic a manner as they could. We all know how the condition worked itself out. In a few months the steel industry, which depends to a large extent upon the purchases of railways, passed from a period in which it had more business than it could handle to a period in which the companies could scarcely earn their fixed charges. Other industries also, passed through a similar change; and it looked for a while as if the last six months of 1903 and the first six months of 1904 would repeat the severe depression of ten years before. These sinister forebodings have not, however, been entirely realized. It is true that various excesses were committed during the high times of 1901 and 1902, and it is true that these ex¬ cesses did encourage a corresponding reaction; but It is also true that the new organization, which the larger industries of