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Real estate record and builders' guide: v. 76, no. 1972: December 30, 1905

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December 30. 1905 RECORD AND OTTTDE 1041 ESTABUSHED-^ hyJtpH SiV>-1868. Div&teD p Re.\L Estate . Building ^crfiTEcmiRE .KousErioiD DEecif(ATioif. BiTsii^Ess Alto Themes Of GeSeR.^!- ifiTER,EST. PRICE PER YEAR IN ADVANCE EIGHT DOLLARS Published every Saturdag Communications sbould ba addressed to C. W. SWEET, 14-16 Vesey Street. ____ York Telephone. Cortlandt E157 "Entered at the Post O.ffice at Netv York. N. Y.. as second-class iiiatUT." Vol. LXXVI, DECEMBER 30. 1905. No. 1972 INDBJX TO DEPARTMENTS. Advertising Section. Page. Page, Cement ....................xxvii Law .........................xiii Clay Products...............xxvi Consulting Engineers........vii Metal Work .................xxiil Contractors and Builders.......x Quick Job Directory.........xxxi Electrical Interests .........vili Real Estaie.................xvi Fireproofing..................ii Roofers & Roofing Materials.. ,v Granite ....................xxviii Stone ....................xxviii Heating ....................xxiv Wood Products Iroa aad Steel................xxii IN observing the current business situation one caunot help fearing that it is assuming a number of dangerous charac¬ teristics. Until recently the current activity and prosperity were wholesome and were not accompanied by excessive in¬ creases in prices or by any signs of the kind of boom which inevitably necessitates a sudden and disastrous reaction. But it looks now as if the steel industry, for instance, was freeing itself from the moderating influences which hitherto have kept prices in check, and was getting into a condition similar to that of 1902. It looks also as if the leading financiers were again beginning to feel their oats, and were planning further corporate combinations, which will largely increase the ex¬ isting supply of securities. Finally the speculative fever has undeniably taken possession of "Wall Street, and it may well be that wild and excited markets will prevail during the next few months, until the excess brings its inevitable reaction. There seems to be no danger that the reaction will come in the near future, but the time is certainly not far distant when money will be more valuable than securities, and when the wise man will sell out and wait patiently until he can re¬ cover his stocks at a considerably lower level. Such a seller may not get the very best prices for his speculative holdings, but he will do well to take a substantial profit, and not to risk being caught with many stocks when the decline begins. THE current week brings to a close the most active real estate and building year which the city of New York has ever experienced. A full description and analysis of the year's operations will be published in an early number of the Record and Guide, but in the meantime we should like to call attention to certain fundamental facts. There have been ap¬ proximately 35,000 conveyances recorded in the New York County offices, and 42,000 in the Kings County offices. The percentage of increase over the preceding year has been about 50 per cent, in Manhattan and the Bronx and about 35 per cent, in Kings. Furthermore, it must be remembered that these in¬ creases, large as they are, follow upon a constant succession of increases stretching over five years, the net result of which is that real estate in this city is just about three times as active as it was in 1900. It should also be noted that the aggregate value of the Manhattan real estate transferred dur¬ ing the past year was not far from $875,000,000, and if the value of Bronx propertry were added to tbis the total would be considerably over ?1,000,000,000. The mortgage tables show increases which are smaller, because of the discouraging effect of the mortgage tax during the past six months; but heavily as that tax has weighed upon the lending of money on real estate, there has been about $500,000,000 loaned on Manhattan and Bronx property, which is an enormous increase over the total of the preceding year. The figui'es for projected build¬ ings tell the same story. In New York and Kings counties buildings have been projected to cost not far from $250,000,000, which is about 70 per cent, larger than the figures for the pre¬ ceding year, and the great mass of this money has been spent upon the erection of new living accommodations, necessitated by the growth of the city. These are figures which only a few years ago would have seemed inconceivably big; but it can safely be said that this activity is the normal and inevitable result of the growth of the city. It does not mean inflation in prices; nor does it mean, except in some few sections, an excess of speculative activity. It means a solid expansion in business and a sufficient increase in population. Such a pace cannot be indefinitely maintained, but ao far it has shown few unwhole¬ some symptoms. THB question of the debt limit has been raised in its most serious form by the rapid transit merger. The city i,B confronted by the s,-.:!t that it cannot spend the money qeeded for the subway extensions, nG matter- - how de¬ sirable it may be to do so, and the consequence is that varioiis- methods are again being proposed to efEect an increase in the municipal borrowing capacity. It is suggested, for instance, that the assessed valuations of real estate be raised to a still higher level, so as to provide an early increase of working capital. But no such idea as this should be entertained for a moment. Real estate in this city is assessed at the present time quite as high as is safe. A 10 or 15-per ceut. margin should be allowed to remain between the assessed and the selling value, because the best real estate appraisers cannot pretend to estimate more closely than that of the actual value of a piece of property. If the general level were raised 10 per cent, it would provoke the utmost confusion, because in that case thousands of parcels would be assessed at more than their selling value; and as this fact could be proved it would involve the city iu endless contests with individual taxpayers. We are glad to see that the Mayor has announced his opposition to this proposal. Another suggestion is that the city should be allowed to borrow 10 per cent, of the value of the real estate owned by the city. This seems to be a moderate and reasonable idea, and, as a matter of fact, it is defective because it is too moderate. If the constitutional provision affecting the debt Hmit is to be modified at alt, let it be modified in a radical and effective manner. Adequate preparation should now be made for all the probable future needs of the city. Any debt in¬ curred by the' city for the purchase of remunerative property, such as subways, docks or lighting plants, should not be counted as part of the debt included within the 10 per cent, limit; and such preparation should be made, even if the use of the addi¬ tional borrowing power is not found to be necessary in the present emergency. In this connection it is a fortunate thing that Mr. Bird Coler will after -January 1st again have a seat in the Board of Estimate and Apportionment. He is the gen¬ tleman who originally called attention to the absurdity of the existing debt limit and to the effective and scientific manner of modifying it. Now that he is again a city official, he may be trusted to keep up the agitation for remedial action, until such action is consummated. MR. LAWSON PURDY is right in saying that the longer the mortgage tax endures the more difflcult it will be to repeal it, and the obvious inference is that no effort should be spared during the coming session of the Legislature to effect its repeal. Up to the present time it has been very decidedly a failure as a producer of income; but, of course, its efficiency in this respect will increase year by year, until at the end of flve years it will yield such a large sum that it could not be re¬ pealed without dislocating the finances of the State. Hitherto, however, the yield has been so small that its repeal would make no difference, and a larger income could be raised immediately from a mortgage recording tax. In the matter of the repeal, a great deal depends upon the attitude of Governor Higgins, Not only would it be impossible to pass a repealing bill over his veto, but the Legislature obediently follows the Governor's lead in matters of taxation, and the Governor's attitude, so far as it has been made public, is not highly encouraging. The existing mortgage tax is to a large extent his own personal measure, and he will have to be pressed hard in order to submit to its repeal. His message wiil doubtless contain his revised opinions on tbe mortgage tax, and it will be interesting to observe how far he can reconcile the actual effect of the tax with the argu¬ ments which he used in its favor last winter. The tax is not olily being paid by the bori'ower, but in many instances it has served to inciease the rate of interest by more than the aniount of the tax. This fact can be pi'oved from the figures published by the Record and Guide, and it substantiates the claim of the opponents of the tax, that the impost is a flagrant piece of double taxation. It remains to be seen whether these arguments will have any effect upon the mind of tbe Governor. It should be added that any legislative action which may be taken on matters of taxation wil! depend upon the financial position of the State, as revealed in the Governor's