Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 48, no. 1237: November 28, 1891

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November 28,1891 Record and Guide. 683 0^ g^ ^ EblABUSHtU ^J/ /I De/otEO to f\EikL Estwe . Building AFicrfiTEtrroi^E ,HouseHold DegoratioiI. Bi/sii/Ess AfJD Theme? of GeSera^- IjJtci^est PRICE, PER YEAR I!V ADVANCE, SIX DOLLARS. Published every Saturday. Telephone . - . . Cortlandt 1370. Communications should be addressed to C. W. SWEET, 14 & i6 Vesey St. J. 2. LINDSEY, Business Manager. Vol. XLVIII NOVEMBER 28, 1891. No. 1,237 TTIE conditions determining the movement of prices in Wall Street have not varied to any extent during the past week; consequently \ alues have remained about constant. There has, indeed, been a perceptible easing up in the money market; for cur¬ rency is beginning to return from the West. With a continuation of the present very heavy exports of wheat and other products we may expect during the early months of the coming year an excep¬ tionally low rate for money—a state of things which ought to give to the bond market its long-expected rise. Then, too, the foreign situation is far less threatening than it was. Financiers in all the large European cities seem to be gaining confidence; and while they are not likely to buy our stocks largely, while so many of their own good investment securities are selling cheaply, ttill their troubles will for the present cease to menace our market. These better conditions have not, however, had any very material e£fect on prices. The probable reason that the excellent prospects are not immediately discounted to a larger extent is that an indisposition to advance prices is always felt just around the beginning of a Congressional session; and this year is not liable to prove an exception to the general rule. Further¬ more there are some undeniably weak spots in the situa¬ tion. The South is still to such a large extent dependent on cotton for prosperity that the prevailing low price which that product brings will keep that large section of the country depressed for some time to come. This tact, however, is not of any general significance. It remains true that the year 1891 closes with the financial outlook far brighter than were the pros¬ pects at the end of 1889 or 1890. A little earlier than this last year the Baring crisis tried men's pockets, while the December of 1889 was troubled by rumors of rate wars and like financial disasters. Now, however, our troubles are either local or rather impalpable. For the last ten years eminent financiers have been nervous about Congress' action respecting silver. All these fears have proved groundless hitherto, and this year also they are not likely con¬ tinuously to affect prices adversely. A HOPEFUL sign which may be fairly claimed as the flrst result of the protest against the secret use of the Lake Erie & Western Railroad stockholders' proxies is the statement in the Sun of Thursday that " a resolution was passed (by the Board of Directors of the Richmond Terminal Company) stating definitely to what purpose the proxies should be put, which Mr. Inman is authorized to solicit and vote at the annual meeting on December Sth." This is precisely as it should be. Trustees ought never to ask for a proxy, which is but a power of attorney from their cestuis qui trust, without stating explicitly for what purpose the proxies are to be used. If The Record and Guide has in any measure contrib¬ uted to the alteration of these loose methods it will consider itself amply repaid for all the space given to this matter. A collateral result of tbis neglect to do this is as follows: If the stockholders of the Lake Erie & Western Railroad had been clearly informed in advance that it was proposed to use their proxies in June, 1890, to put a second mortgage on the property, they would have been able to see to it that the resolutions authorizing such action embodied in their terms every condition and restriction which was necessary as a safeguard for the proper marketing of the securities and the expenditure of the money real¬ ized. As it is no stockholder has any means of knowiug what the securities- are going to bring, nor precisely what the company is going to get back in the way of assets in exchange for them. All the stockholders do know is that if the extraordinary and outrageous action of their trustees cau stand unquestioned, they will be left only to the tender mercies of Mr. Brice for such return as they may eventually get. What the mercies of Mr. Brice are likely to be stockholders can perhaps infer from general repute and from such knawledge .as they may possess of the fate of other properties which have fallen into his hands. It might not be amiss just at this juncture to point with warning finger to the fate of the Rich¬ mond Terminal property as illustrative of what stockholders in the Lake.Erie & Western Company may expect if at this juncture they fail to assert their rights and protect themselves against this way of doing business. Eapid Transit PosEibilities. PENDING the result of the canvass of Broadway property- owners, which is now being vigorously undertaken, discus¬ sion respecting the prospects, merits and dangers of the Commis¬ sion's plan has almost entirely ceased. The Commonwealth Club have indeed been considering their old oft-pondered problem, but the discussion was edifying, not so muoh because of the light which it threw upon the plan of the Commission as because of the effectual manner in which it refuted the claim of the enemies of the Manhattan Company that the intelligent public opiuion of the city is opposed to granting to that corporation any extension or enlargement of its present system. But the opinions of the speakers at the Commonwealth Club have not brought forth any comment by the newspapers, which are waiting for the Commission to go on with its work—if it can. Very possibly this silence will be succeeded by a storm. The Commission's plan was received with ill-concealed hostility by cer¬ tain of the papers and we may be sure that this hostility was exhausted in the trivial criticisms which constituted the whole of its ostensible justification. Apart, however, from the more or less powerful enmity of this character which the plan has encountered and will encounter, there are several obstacles of a more serious character, the existence of which is known, but the resist¬ ance of which still remains dubious. In the first place, delays may take placf in satisfying legal requirements. Probably a num¬ ber of Broadway property-owners will give their consent to the plan sufficient to make an appeal to the Supreme Court unneces¬ sary ; but this is by no means certain, several of the largest owners having expressed themselves as opposed to any tunnel near the surface. Consequently no one can tell when the Commissioners will be in a position to offer the franchise for sale. Equally uncer¬ tain is the prospect of selling the franchise to advantage. It is necessary that any company operating should put on a service of unusual speed and convenience, for it will be an indispensable element in the work to be performed by the new system that t should be efficient enough to overcome the advantage which Brooklyn possesses over the upper wards of this city in respect to contiguity to the business districts. The Rapid Transit Commis¬ sioners will then have to insist oa a service of this character, and yet at tbe same time will scarcely wish to sell a franchise of such great ultimate value upon very unfavorable terms. The difficulties attending such a sale have been repeatedly pointed out by The Record and Guide. The system will be especially designed to meet the needs of the least remunerative class of traffic ; it will have to give its patrons unusual comforts and con¬ veniences, and even if capital sees money in the project, in spite of these mitigating circumstances it will have to be constructed at a time when the best classes of bonds are diffl¬ cult of sale. We are not trying to estimate the resistance of these obstacles, neither are we trying to predict the outcome; but one important question arising from the possibility that tLese obstacles will prove insuperable needs asking and answering. If the Commissioners find it impossible to satisfy legal requirements with their plan, they will have no alternative but to relieve the almost intolerable inadequacy of the present service by giving to the Manhattan Company, so far as lies within their power, authority to improve its service. But what if the Commission finds that the franchise cannot be sold, or that it can be sold only on such terms as will make the contract a very bad bargain for the city ? This question may have to be faced, and it is well to search for an alternative. Doubtless, any corporation that bids will believe that it has the municipality in a tight place, and if possible it will squeeze concessions out of the commissioners, which would place our authorities at a great disadvantage in all its subsequent dealings with the corporation, and would fasten on the transit ser¬ vice of New York another railroad as insatiate and unmanageable as the Manhattan Company. That this is scarcely a desirable consummation every one will admit; but what are we going to do about it ? The plan might be altered, buc it could be altered only by decreasing the efficiency of the system, and that is, from the necessity of the case, excluded. The logic of events seems to be drawing om- authorities to consider seriously whether the city should not be placed, by legislation, in a position to build the system for itself. New York can issue bonds for more than $-15,000,000 before its borrowing power under the constitutional limitation will be exhausted, so that there are uo obstacles in that direction. The system could be built far more cheaply by the municipality than by a private corporation ; for New York could borrow at 3 per cent, while a private corporation . ..would have, to .pay at least 6 per cent....If. the .8.y.stem should cost