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Real estate record and builders' guide: v. 81, no. 2098: May 30, 1908

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May 30, 1908 RECORD AND GUIDE 1003 BtfsBteBC«btHE«KoF'GEjto^V iKreiijsT^ WtlCB PER YEAR IN ADVANCE EIGHT DOLLARS Communications should ba addressed to C. W. SWEET fablUfitd EVerg Satardaff By THE RECORD AND GUIDB CO. ffeatdent, CLINTON W. SWEET Treasurer, F. W. DODGE Tlo»-Pres. & Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLER Nob. 11 to IB Eaat 24th Street, New Yort City (Telephone, Madison Square, 4430 to -4433.) "Entered al the Post Offict *t Hoc York, N. T., us second-class mader." Copyrighted, 1908, by Tha Record *: Guide Co. Vol, LXXXL MAT 30, 1908. No, 209S. THE more cheerful attitude of Wall Street towards the business situation Is beginning to have a good effect generally. The credit of the several railroad companies, whicli have needed ' to raise money, has strengthened, and tfiey have provided, not only for immediate ne¬ cessities, but even for a resumption of certain sus¬ pended improvements. Milla are beginning to resume all over the country, and business men in all departments of trade are beginning to regard the future with more confi¬ dence. No doubt a good many mouths must elapse before this better feeling has its full effect, iDut in case no disaster overtakes the crops, there is every reason to suppose that the summer will witness a slow but sure process of recovery. It is such a process of recovery -which the business of the coun¬ try needs. Any sudden and violent revival of business would necessarily be temporary in its nature and unwholesome in its effects. In writing and talking about the existing de¬ pression, both the newspapers aud many business men too often forget that some such depression was necessary for the permanent industrial well-being of the country. Business had become disorganized by the effects of too much prosper¬ ity. A period of quiet was necessary in order that econ¬ omies might be effected, operating and manufacturing ex¬ penses diminished, the efficiency of labor increased, and blind capital accumulated. A sudden revival of prosperity would Interfere with the proper achievement of al! of these essential tasks, whereas a gradual resumption of business activity extending over a couple of years would permit the necessary re-organization to be accomplished and would lay the foundation for a longer subsequent period of business activity. THE veto by Governor Hughes of the amendments to the Rapid Transit Act contained in the Robinson bill kills any expectation of the early construction of Manhattan sub¬ ways. Even if private corporations could be induced to as¬ sume an operating contract for the term provided for in the existing law, the city cannot possibly appropriate any money for the purpose unless some drastic means are adopted of increasing the assessed valuation of real estate. The veto consequently means a long delay in the beginning of any new subway construction, and Governor Hughes has assumed a severe responsibility in refusing his assent, to the Robinson amendment. Neither are the reasons whereby he defends his actiou any sufficient excuse therefor. Those reasons can be grouped under two heads. In the first place, he does not believe tbat private capital could be induced even by the offer of a fifty-year franchise to come immediately to the rescue of the city. This, however, is only his opinion, and it does not seem probable that he is right. At the end of four years of operation the existing subway will be earning IJIO.OOO.OOO gross, $5,500,000 net, and carrying 200,000,000 passengers a year. Surely after such a showing it looks as if capitalists who would not risk their money in an enterprise which promised just as well would have lost their sense of a "good thing." It is true that the fixed charges on the cost of construction would be larger for a new subway than it is for the one now existing, both because a higher interest rate would have to be paid on fhe bonds, and because the cost of construction per mile would be larger. But on the other hand, as the report of Mr, Bion J. Arnold shows, a new sub¬ way could be made capable of carrying a much denser traffic —a traffic so dense as more than to counterbalance the higher fixed charges. In any event, however, the attempt to secure the immediate cooperation of private capital was worth while and could have done no harm in case it failed. Just here, however, comes in the Governor's second reason. "The city," said Governor Hughes, "should not lose control over its highways for rapid transit purposes for such a pe¬ riod. Any one who reflects upon what the city was fifty years ago, and upou what it is likely to become in the course of the next fifty years must realize this." The Record and Guide believes this second reason to be much more valid than the first. In fact, just in so far as it is valid, it abso¬ lutely kills the force of his contention that private capital would not be tempted by a fifty-year franchise. A franchise which is too valuable to alienate for so long a term would also be too valuable not to be snapped up by a private cor¬ poration, and the really practical question is whether tho city would lose more by a long delay in the construction of an improved transit system than it would by the surrender of the franchise for a longer term. We believe tbat the loss of time, the discomfort and the burden upon the business efficiency of the city due to an indefinite delay in rapid transit construction will cost the city more than it will gain because of the shorter term for which the franchises will be surrendered.) WHETHER Mr. Hughes was or was not justifled in his veto it is a fact that the attempt to secure the co¬ operation of private capital in subway construction has failed, and that, furthermore, this failure must be considered final. Even if New York elects a new Governor next fall, it will scarcely be worth while to renew the attempt, because relief from another source will then be near at hand. The L'egislature has passed a concurrent resolution for an amend¬ ment to the Constitution, providing that indebtedness in¬ curred for rapid transit improvements shall not, under speci¬ fied conditions, be considered iu estimating the debt limit, and the efforts of everybody interested in rapid transit should uow be concentrated upon the passage of a similar resolution at the next session of the Legislature, and its popular ap¬ proval one year from the coming fall. The worst impedi¬ ment to an adequate system of underground rapid transit will then have disappeared; and it will he possible to plan a subway system like the one lu Paris, which will be really comprehensive and which can be constructed gradually, but without any serious delays or interruptions. Moreover, the public opinion of the city must understand the consequence of constructing au improved transit system under the terms of the existing law. It means, probably, that the city will be obliged to bear the expense of not only constructing the new subways, but also of providing a certain amount of equipment. No doubt at the end of another two years the credit of the Interborough Co, may be so restored and the obvious advantage even of a short lease may have become so great, that it will be ready to equip extensions to the present subway in return for a lease of twenty years with one renewal of fifteen years, but after the failure of a year ago to secure bidders under the legal terms, it would be foolish to count upon such a contingency. As long as it will offer only'a short lease, the city must be prepared to put up more money in order to secure a tenant for its subways. It must even be prepared, if necessary, to provide all the equipment, or to operate the subway by its own employes. It is now definitely committed to a policy of municipal construction and short leases, and it must pursue such a policy in a con¬ sistent and thorough-going way. It wilt suffer grave losses because of its having been obliged to persist iu this policy after it had failed to be immediately successful; and the one way of partially remunerating itself for these losses will be to obtain every advantage it can from a subway system leased only for a short term. In constructing subways and leasing for a period of at the outside only thirty-five years it will be creating for itself an asset of enormous future value. The next two years should be passed in carefully considering the routes which ought to be Included in a com¬ prehensive subway system, their order of construction, and the probable assistance which can be obtained from private capital. ANOTHER LANDMARK DOOMED.—The old-fashioned 4- sly brownstone dwelling 405'4th av is going to be altered beyond recognition. This house is situated 2.^.5 feet north of 2Sth st and is going to be converted into an ofhce building, with a store on the ground floor, and bachelor apartments upstairs. This property is centrally located, there being a subway station almost directly in front of the door, and an elevated raiload station on 3d av and 2Sth st.