Real  Estate   Record





AND BUILDERS' GUIDE.





Vol. XVIII.





NEW YOEK, SATUEDAY, NOVEMBEE 4, 1876.





No. 451





Publislied Weekly by

CIjD §leal (f sf ate %ttaxii %%^omimx.

TERMS.
ONK YEAR, in advance.. ..$10.00.
Communications should be addressed to

C.  MV.  SWEET,

Nos. 345 AND 347 Broadway.





NOTICE TO SUBSCRIBERS OF THE

BANKER AND TRADESMAN.
In accordance with the terms of an agreement
entered into between the PvEAL Estate Record
A.ssociation and the Bankers' and Traders' Com
pany (Limited), the Real Estate Record news¬
paper is sent this week and will be sent every
week hereafter to every subscriber of the Banker
AND Tradesman for the term of his subscription
to the last named paper. Readers of the Banker
AND Tradesjian not familiar wdth the contents
of the Real Estate Record vrill find, upon pe¬
rusal, that while it contains aU the important fea¬
tures of the Banker and Tradesman, it also has
a number of specialties distinctively its own
which cannot be found in any other jom-nal, a
familiarity \vitli which will give the patrons of
the Banker and Tradesman no cause to regret
the change.





FRAUDULENT TRUSTEES.

Disguise it, shut cm- eyes to it, gloss it over as
we may, the truth stares us in the face, that a
gi-im spectre stallis cm- land, whose lineaments
are weU defined and unmistakeable as those of
official malfeasance and corruption. The people
shrink appaUed before its obnoxious and loath¬
some presence; it clogs cm- industry, depresses
our enterprise, stifles our prosperity, assuming its
concrete form in multiplied and extortionate tax¬
ation, absorbing the substance of the body politic
with the greed of the Condor. A dank and dark
atmosphere envelopes and obscm-es the fair hori¬
zon that once surroimded our commercial and po¬
litical life, pervading all the grades of official sta¬
tion and entering the recesses of corporate and
private trusts.

Leaving to the daUy press the task of dealing
with this iniquity as it displays itself amid the
functions of public life, it becomes our duty to ex¬
pose its inroads upon the special domain which we
represent.

We enter upon the subject vrith anjrthing but
an equable frame of mind, Its details shock and
alarm us, as they have already spread terror and
misery through oiir various communities, The
bankrupt and failing sa-rings banks and life in=-
Siiranoe companies are legitimate results of this
widespread epidemic. Of late years it has been
notorious that many of these institutions were in¬
corporated, not for legitimate purposes, but for the
sole and secretly acknowledged design of attract¬
ing the slender savings of the poor, and employing
them for the private gain and emolument of trvs-
teesaadofficei's.  The uwd'/aqp^-ajicii is now being





exposed in the investigations and reports of re¬
ceivers.   However disgraceful their investments
in stocks and bonds may have been, we record but
the tnith when we say that the bonds aud mort¬
gages which appear among their assets are more
likely to be tainted with fraud, and though they
are usually relied upon as the soimdes-t securities,
they  ofttimes  only  cover  up villainies which
should consign their pei-potrators to the State's
prison.   This invasion of our peculiar domain in
one of its most sacred departments arouses om- in¬
dignation ; in the light of recent events we acknowl¬
edge oui- cidpabUity in not having exposed these
ways and means of fraud before.    Om- weekly
record during the past eight years would have
fui-nished to any intelligent obsei-ver an insight
into the processes of these fraudulent institutions
and the doings of these fraudulent ti-ustees.   In
no way probably can fraud be more adroitly cov¬
ered up than'in the loaning of funds on bond and
mortgage.   The law relating to these insta-uments,
designed to ensure and preserve their integrity is
so stringent that none but rogues dare to violate
it.    Hence the eagei-ness with which they seek the
shelter of these favorite forms of securities for car¬
rying on their nefarious practices.   We have be¬
fore called attention in these columns to the case
of an institution which loaned its funds on bond
and mortgage, but audaciously withheld from the
principal sum a clear bonus of ten per cent., in
direct contravention of law and to the complete
invalidation of the bond and mortgage.   Upon
attempting to collect this mortgage, the maker
plead the statute of usm-y, and under its harsh pen¬
alties is hkely to escape the payment of the entire
sum.   And this is but a sample, we are sorry to
say, of the loans made by these fraudulent institii-
tions and their fraudulent trastees.   The laws of
this State regidating hfe insm-ance and saving in¬
stitutions are of the most exacting and compre¬
hensive character, and, if faithfully administered,
would ensure the complete protection of all whose
interests are involved.    In the examination of
their assets it is comparatively easy to determine
the value of many of theii- stocks and bonds.   But
the examination of the bonds and mortgages is
seldom thorougWy made, because of the difficulty
attending the proper appraisement of the property
upon which the mortgages are liens.   It should be
the duty of the State examiner, in investigating
such institutions as loan money on bond and moi-t-
gage to engage the sei-vices of experts, and to
make at least yearly appraisals of the property
mortgaged, so as to detei-mine what ratio the sum
loaned beai-s to the total value.   We could select
from our mortgage Ust almost evei-y week cases of
loans made by institutions which can safely be
said to represent three-fifths if not the whole of an
honest valuation of the property mortgaged.

In the future we may feel called upon in this
particulai' branch of om- duty, and with the view
of assisting the examiner in the performance of
his office, to specially denote mortgages made by
institutions which we consider unsafe. This much
we would gladly do for the protection and further¬
ance of public interests. We can, of course, only
establish allegations of fraud in such cases as come
•within the scope of our personal knowledge, but the
eadsteuce of many mortgages i^ our list fairl^-sug-





gests the mference that unlawful means or culpa¬
ble recklessness have marked their inception.
Until this crimmal or unwise use of coi-porate
fimds is stopped, we must expect a continuance or
an aggi'avation of the evils which have recently
afflicted our community.

These fraudident tiaistees have been suddenly
and i-uthlessly overtaken by the present revulsion
winch has pitilessly micovered many a nice scheme
of peculation. .The more foolhardy of them may
hope to continue these illegal practices, expecting
that some fresh scheme of inflation or some favoi^
able tm-n of the markets may waft prices up again
to the point of redeeming their rascahty ; but no
effort shall be left imti-ied on om- part to expose
these miwarrantable acts of fiduciary institutionf.

We have no heart to enter into the particulars
of those cases of felonious defaidt on the part of
private trustees which have been spread before the
public in the daily prints, and which have be¬
smirched with infamy names that were once held
liigh in professional and social esteem. They
sei-ve as instances to demonstrate that the vice of
corruption has penetrated the sacred recesses of
private fiduciary trasts, whereby trustees, who
have been honored with the dearest and most
imjihcit confidence, have proved faithless and
recreant.

Unless these acts meet with stei-n and uncom
promising reprobation on the part of our whole
commmuty, the words ti-ust and trastee will be¬
come the mast despised in our vocabulary. Peo¬
ple will shrink from confiding the care of their for¬
tunes to individuals and will disti-ust institutions
even when \visely managed.

In almost every case these frauds have attached
to institutions of recent mushroom gi-owth, officer¬
ed and managed by cliques of notorious and un¬
scrupulous men. Happily, however, the hard
tim'js are gradually vrinnowing the chaff from the
wheat. It is to be hoped that the State Examiner.
will be unsparing in his investigation of aU remain¬
ing doubtful corporations, that the axe may be laid
at the root of this special corruption, and that
when we emerge from this prolonged and exhaust¬
ing revulsion we may have the satisfaction of
knowing that sm-viving flduciai-y institutions are
sound to the core, trustworthy, honored and hon¬
orable in their dealings.

The fraudulent private ti-ustee must be made to
feel the ostracism of public opinion until legisla¬
tive enactments declare his career a felony.





OUR WATER FAMINE.
Om- boasted water supply, having been sub¬
jected to the severe test of a long continued drouth,
has been found defective, and in fact insufficient
in such an emergency. It must be borne in mind
that this large supply, notwithstanding official
assurances of an ample reserve, is only rel¬
ative. The natural increase of om- population
and extension of the gi-owth of our city, to^
gether with the possible contingencies of drouth
and conflagi-ation, are important factors to be
taken into account iii the calculation. The supply
that was more than abundant ten years ago has by
the increase of building improvements become to¬
tally inadequate,. It is well ^W^ W' itt ^