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Sf-Â»;etnber 10, 1887
-I'he Record and G^ide.
THE RECORD AND GUIDE,
Ptd)lished every Saturday.
191 Broad"way, IST. '^_
Onr Teleplkone Call la
OIVE YEAR, in advance, SIX DOLLARS.
Communications should be addressed to
â‚¬â€¢ W. SWEET, 191 Broadway.
J. T. LINDSEY, Business Manager.
SEPTEMBER 10. 1887.
Trade reports continue favorableâ€”there are no labor strikes in
prospect, and the general business outlook leaves little to be desired.
Iron and steel are not as high in price as formerly, which is not a
good sign, but railroad returns keep up remarkably well. The
West-bound traffic is very heavy^, due largely to the westward tide
of foreign and domestic emigration. The stock market has been
depressed during the past week, but if the telegraph deal should be
announced it is expected that prices would start upâ€”for a time
anyway. The real estate season has not yet opened, and there is
really nothing to be said that would throw any light upon the situÂ¬
ation ; still, the feeling among dealers ia hopeful.
It is suspected that Mayor Hewitt's action in calling the ManhatÂ¬
tan Company to account was prompted by Cyrus W. Field, who
would like to use the city authorities to revenge himself on his
quondam partner Jay Gould. We do not think the Mayor would
lend himself to satisfy the private vengeance of anyone, even a
member of his own family. But the question he raises is an
important one and ought to be settled on its merits. However
blameworthy the conduct of the manipulators of Manhattan have
been in the past, the company itself has been an undoubted benefit
to New York city. It has made all parts of the island accessible at
the cheapest possible rates. What would New York have been
without the elevated roads ? It voluntarily reduced the fares to a
minimum, and the increase of our real estate valuations due to
this company runs up into the hundreds of millions. These conÂ¬
siderations t='i juld induce the community to deal justly, if not
generously, by the Manhattan corporation.
An arbitration commission should be appointed to settle the
que8ti:>n as to the future relations of that company to the city. It
clearly has no right to seize on public property for corporate purÂ¬
poses. If the stations are used to sell newspapers and other small
wares, then the city ought to have some advantage. The ManhatÂ¬
tan Company should be encouragpd also to acquire its own property
for the sale of tickets and the accommodation of passengers so as to
leave the streets unobstructed. Then the matter of damages to priÂ¬
vate property ought to be settled permanently. If Manhattan
would agree to charge five cent fares at all hours and have a suffiÂ¬
cient number of cars to seat people, the city could well afford to
protect it against suits for damages on the property along the route.
Should the municipality pursue a hostile policy, it is within the
legal power of the company to double its fares, except during comÂ¬
mission hours, and more than ^triple them on the west side. The
bad character of Jay Gould has nothing to do with this, as it is simÂ¬
ply a business matter between the company and the city. Then
the Mayor is clearly wrong in threatening to use the whole power
of the city to prevent the laying of a third rail. If the Manhattan
Company adds one-third to its capacity, that is to the manifest
advantage of the community. Let us all try and be sensible in conÂ¬
sidering this matter.
Mr. Edward Atchinson. the pronounced '* gold bug," and Mr.
Dana Horton, a bimetallist of a somewhat questionable kind, are
now in Europe as the semi-official representatives of thi? country
to try and suggest some international programme on the money
question. Mr. Atchinson is for gold first, last, and always, and he
therefore misrepresents more than four-fifths of the people of this
country. Mr. Horton is a believer in silver, but he wants us to
stop the silver coinage and create a business panic, so as to bring
Europe to terms. It is deplorable that a few Eastern bankers
should control our government in this matter of our metallic curÂ¬
rency, in defiance of the overwhelming sentiment of our people in
demanding the use of silver as well as gold in measuring values.
We complain of the stringency in the money market to-day.
Where would we have been if the $300,000,000 of silver was missing
from our currency ? We, in that case, would be in the very depths
of financial despair.
The tendency of all trade is towards diminishing profits. Thia is
true of all the great industries of the worlds Take our railway
chargesâ€”il will be found that they are heaviest in new districtsi
and ave at a minimum in the older and more settled sections of the
country. Both charges and profits show a steadily lowering ratio,
even where there is no competition. In last week's Record and
Guide it was pointed out that the middle-men were disappearing.
Producers and consumers were brought into more direct relation ;
but it was at the expense of those who bought of the one and sold
to the other. Hence the replacing of the small manufacturer and
merchant by the large dealer, who could afford to work cheaply
because of the magnitude of his transactions. This meant the
partial disappearance of the great middle class and the absorption
of their fortunes by the few very rich. The vast increase of the
busiuess of the country has kept out of sight auother very
pregnant factâ€”brokerage commissions are melting away.
The discussion induced by a proposed change in the rules of the
Stock Exchange has brought to the front the significant fact that
brokers are not at all as well paid as formerly. The committee of
the Stock Exchange, to report a remedy for the dullness of its
business lately, makes it clear that the reason why speculators do
not trade in securities on the Exchange as they formerly did is
because that institution charges one-eighth of 1 per cent, on
every hundred shares of stock ic buys or sells, while 6 per cent, is
exacted as the interest charge for all stocks that are carried, no
matter how low the rate in the open naarket. But the Consolidated
Exchange doea business for one-sixteenth of 1 per cent, commisÂ¬
sion, while its Clearing House system practically does away with
interest charges. The petroleum brokers formerly got 2}^ cents a
barrel commission; they now charge only one-eighth of a cent
a barrel, and some are glad to do business at one-sixteenth. The
storage charges have also been reduced from 40 to 25 cents per
thousand barrels per day. The wheat brokers formerly got one-
half per cent, a bushel commission; they only receive one-eighth
and even one-sixteenth now. The lard brokers are willing to do
business for $3.50 for every 250 tierces dealt in ; the old commission
was $20. Freight brokers charge $6 instead of $30 for supplying
ocean steamers with boat loads of grain. Cotton contracts have
been reduced from 6J^ cents to IV4 cents per bale. And so through
all the exchanges of the city and country brokers are willing to do
a great deal more work for a good deal less money. The moral of
this is that brokers of all kiuda will not be as prosperous as they
were. The great increase in business has made up in a measure for
the lower commissions, but the result of it all is that buyers and
sellers are saving money at the expense of the brokers.
David A. Wells is writing articles on *'Economic Disturbances
since 1873," in which he shows th?re has been a veritable revoluÂ¬
tion in human commerce within the last fifteen years. The openÂ¬
ing of the Suez Caual, which brought India within thirty days of
London, has been a great factor in changing the course of comÂ¬
merce. Although English ships have profited by this new route,
the distributing points for the goods of the East is no longer
England, but the Mediterranean ports. Labor-saving machinery
has improved so wonderfully that production has marvellously
increased. Every article that enters into the commerce of the
world has been very much cheapened of late years. Instead of
being benefited, however, trade has been depressed and labor more
poorly rewarded because of the glut of goods and the correspondÂ¬
ing low prices.
Mr. Wells, however, pays no attention to the currency question.
He is an avowed gold monometallist, and he will not admit that
the cutting off of silver in measuring values has anything to do
with the abnormally low prices now prevailing. Yet it is obvious
that with the metallic currency basis reduced one-half, and less
gold being mined year by year, that prices must fade away as the
one metal which measures them appreciates in intrinsic value.
Up to September 1st we have built this year 6,462 miles of new
rail tracks. This beats the record of any country. In 1883 we
constructed 11,568 miles of new track, and it is very clear that, aa
the heaviest construction is in the fall, we will have more than
12,000 miles of new road this year. If capitalized at $-20,000 a mile,
this will use up $360,000,000 of capital. There are breakers ahead.
True, there is one wholesome featureâ€”the new roads are not conÂ¬
structed by independent companies but are extensions of the larger
systems, especially those of the strong Western corporations. The
movement of population from the Eastern to the Western settleÂ¬
ments was never so large as now. This has stimulated railroad
building, and has led to the extraordinary land boom west of the
Missouri and on the Pacific coast. Land has advanced in other
Western centres, because the flood of new comers were willing to
pay anything for house rent; hence the building activity which has
given so much business to the railroads. But these unusual outÂ¬
lays in railroad and house construction will certainly end in a
money stringency which will have direful results for the time