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Real estate record and builders' guide: v. 85, no. 2190: March 5, 1910

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March 5, 1910 RECORD AND GUIDE 475 !MPS^' BusiWEssAffDThemes OF GEfto^l- Interest., PRICE PER YEAR IN ADVANCE EIGHT DOLLARS CommunlcaUons should be addressed to C. W. SWEET Published Every Saturdap By THE RECORD AND GUIDE CO. President, CLINTON W. SWEET Treasurer, F. W. DODGE Tice-Pres. Sc Genl. Mgr., H. W. DESMOND Secretary, F. T. MILLER Nos. 11 to 13 Bast 24th Street, Xew York CltT (Telephone, Madison Square, 4430 to 4433.) "Entered at the Post Office at New York, X. Y.. as s rr,>i:!-rlass matter." Copyrigbted. 1910, by The Record Sc Guide Co. Vol. LXXXV. MARCH 5, 1910. THE real estate and building statistics for the first two month.s of the year do not give any evidence of a prohable increase in activity. In Manhattan and the Bronx the nnniher of conveyances recorded Is almost precisely the same for 1910 as they were for 1909. In Brooklyn a small decrease is to be noted. On the other hand, the Manhattan figures indicate that, although there has been no actual increased general activity, there has been an increase in the general investment demand. Up to February 25, 1910, 117 conveyances carried with them an expressed consideration of about $6,800,000; whereas during the corresponding period of 1909, 110 transfers carried a total consideration of only ?5,2 50,000. The aggregate assessed valuation of 1,533 transfers, recorded during the current year for nom¬ inal considerations, amounted to over $108,000,000; whereas the corresponding figures for 1909 were 1,519 transfers ag¬ gregating $84,600,000. It will be reraariied, consequently, that the average assessed valuation of each parcel of Man¬ hattan real estate transferred during the first two months of 1909 was only $55,000, against $70,000 for the corre¬ sponding period in 1910. Such a considerable variation can be accounted for only by the fact that during the current year a larger proportion of real estate, improved with mod¬ ern buildings, is being transferred; and this change must be taking place in obedience to a livelier investment tiemanti. Tbe huilding figures make a poorer showing than do those for real estate. A substantial diminution of building ac¬ tivity is indicated for all the boroughs of the city, and it appears to reach about the same proportions in Brooklyn and Queens as it does in Manhattan and the Bronx. This diminution in building activity was only ■^vhat a conservative observer of existing conditions would have anticipated. The enormous amount of money invested in new construction ia 1909 was dependent upon certain exceptional conditions. The two preceding years had been extremely dull, and there was a real need for increased accommodations for both do¬ mestic and business purposes. The huge building move¬ ment of 1909 did much to satisfy this need; but if it had been continued, over-production would have been inevitable. The diminution in the rate of building is, consequently, normal and wholesome; and it will not attain any excessive proportions, A large amount of improvement continues to be carried on all over the city, and particularly on Wash¬ ington Heights and in the new wholesale district; and the year 1910, 'while not one of any exceptional constructional activity, will, nevertheless, make before it is concluded a very respectable showing. be so threatening; but the indication is that the higher cost of food products has come to stay. It is due, fundamen¬ tally, to the increasing scarcity of virgin soil and to the fact that increasing products can be wrested from the soil only at an increasing expense. If this is true, it means that the comparatively cheap food, which has hitherto constituted the compensation to the American wage-earner for a huge cost of living in other respects, has become a thing of the past, and that hereafter he will have to pay as much, if not more, for his food supplies as do the wage-earners of Eu¬ rope. Only gradually will he realize that he is confronted by a permanently higher cost of living, and a permanently smaller surplus either for saving or for expenditure ou additional comforts. But iu proportion as he does realize it, he will make up his mind to Sght for an increase in wages proportioned to his increase in necessary expenditure. How far he will succeed in getting what he demands, only the future can tell; but industrial corporations will have good reasons for refusing higher wages unless accompanied by some increase in the efficiency of labor. Their raw materials are also much more expensive than they were; and for the time being increases in wages ■would only mean au added burden to the consumer. A fight, consequently, can scarcely be avoided; and the country will be fortunate in case this flght does not raise dangerous political issues. The labor unions are on the verge of entering into politics; and if they do, the existing balance of the American political system is likely to be disturbed. No. 2190 THE role of a prophet of evil is not one which any news¬ paper likes to play, but the Record and Guide cannot help suspecting that the recent labor troubles now prevailing in Philadelphia are only the forerunners of still worse future developments of the same kind. Siuce the great coal strike of 1901, the country bas been comparatively free from really costly industrial warfare; but oonditious are becoming sucli that a larger supply of such warfare can scarcely be avoided hereafter. The plain fact is that the increase in the cost of living is EXCEEDIXG ANY INCREASE IN WAGES that can be afforded by the industries of the country, and that, consequently, the standard of living of the wage-earning class is bound to suffer. If the increase in the cost of living were due to temporary causes, whicli would disappear dur¬ ing a period of business depression, the outlook would not THE announcement that the forthcoming municipal loan will probably carry interest at iy^ per cent provides matter for serious consideration. Such a rate of interest might well have been anticipated, because the last loan issued at 4 per cent, was sold at only a shade over par, and in the meantime investment conditions have not substan¬ tially improved. Necessary as a higher rate of interest may be, it is certainly most unfortunate that the largest city in the United States is obliged to pay over 4 per cent for the money it borrows; and this fact again raises tbe question as to the extent of the future demands wbich the city will be obliged to make upon the money market. The Record and Guide has never believed that the high rate of interest at which New York floats its loans was due to any doubt on the part of investors as to the value of the security offered. New York is obliged to pay more for its loans than certain other American cities, chiefly because it has been borrowing more money than the investors in this class of security had to lend; and if this is the true explanation, the only method whereby the credit of the city can be restored to its condition of ten or fifteen years ago is that of encour¬ aging its borrowing for a sufiiciently long period. But ac¬ cording to the existing outlook, the city will be borrowing even more money in the future than it has iu the past. It is true that the East River bridges are now practically completed, and that no more money will hereafter be re¬ quired for this purpose. On the other hand, the number of costly improvements which the growth of the city necessi¬ tates tends rather to increase than diminish. Besides the regular expenditures for new school houses and the like, the city or the country will bave to carry the burden of constructing the new Municipal Building, the new Court¬ house, the Catskill Aqueduct and the improvement of Ja¬ maica Bay. Furthermore, the administration has definitely announced its intention ot paying for the new subways out of the proceeds of municipal loans. There can be no doubt that the increasing congestion of street traffic will necessi¬ tate, sometime within the next flve years, expensive improve¬ ments in the street system of Manhattan. The fact that the cost of subways and water ■works can be excluded from the computation of the debt limit will enable the Board of Esti¬ mate to borrow money for all these purposes without legal hindrance; but its freedom in this respect should be used with every possible caution. The Board of Estimate should look carefully into the question as to how many millions of city stock can be absorbed annually by investors without further deterioration of the municipal credit; and in some way or another the issue of municipal securities should he confined to that amount. WHILE the chief cause of the high rate of interest which the city is obliged to pay for its loans is undoubt¬ edly the excessive demands made upon the money market- a minor part of the responsibility for the deterioration in the