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Real estate record and builders' guide: v. 70, no. 1808: November 8, 1902

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November 8, 1902. RECORD ANT) GUIDE. ^77 y^ l^ •» ESTABUSHED'^l^CHem'^1868. XtatTfl) TO Ffej^L Estate . BuiLDiflc *;R.afrrzfmmE ,t{ousE3lou) DEOorifnDil, Basiitess AftoThemes OF Ge^Ier^ iKtERFsi- PRICE PER YEAR IN ADVANCE, SIX DOLLARS Published etiert) Satardat/ Communications should bo addressed to C. W. SWEET, 14=16 Vesey Street, New YorH J. T. LINDSET, BuBlneas Managtr Telephone. Cortlandt 3157 "Entered al the Post Office, at Neio York. N. Y.. as set^ond-class matter." \oi. L,XX. NOVEMBER, S, 1902. No. 1808. THOSE who are disappointed because a post-election rally did not materialize are sadly blind to the facts of the speculative situation. It is not sentiment or indirect influences that ara producing stagnation in the business and declines in the prices of securities, but a lack of means for speculative oper¬ ations. As was pointed out last week, so long as rates for time money are high there can be no large movements for a rise, for the reason that these rates are a result and expression of re¬ sources employed to the full in legitimate lines of occupations and that, consequently, while day to day accommodations may he comparatively easy, tbis is only so because the demand is light. With the market wanting the support of the speculator and the liquidation of long stock that is always a characteristic of times of keen commercial demand for money, prices cannot advance, no matter what may be the inferential effect of passing events. "When six months' money comes back to 4 per cent, we may talk of a change in the movement of security prices. This, however, we do not expect to see for some time to come, certainly not this year. While money is the prime and prac¬ tically the only determining factor of the moment, there are features of the situation that have a sustaining and encouraging effect. The experience of the past two months must have effected a strengthening of the banks in their relations to their borrowers; the weekly returns frora the railroads show not only that they are doing a profitable business themselves, but that the community as a whole is busily employed; the effects of the great corn crop are yet to be felt in the North, and in some por¬ tions of the South a banner cotton crop is expected. With the finances of the country satisfactorily disposed of the people may face the future with confidence, even if meantime security IDrices are placed upon a lower level and a return to the whirling speculation of the recent boom years is not to be expected. In Europe there is neither change in the domestic conditions or in the attitude toward American securities. Tbe movements of exchange between the various markets lean toward an early demand upon this centre for gold. THE newspapers have shown a general disposition to ac¬ credit the local administration with the great popularity of the Democratic State ticket in this city last Tuesday, and to take it as an indication that the supporters of the administration are disgruntled with what it has achieved and failed to achieve. We presume that there is some truth in this interpretation of the strength shown by Tammany, but if so, the discontent is the result of really expecting more from the administration than it could possibly accomplish in one year, or, for that matter, iu ten years. It is an unfortunate aspect of all "reform" victories that they depend upon a carefully worked up outburst of moral indignation, which is really aiming at the accomplishment of im¬ possible results, and which when these impossible results are not obtained encourages people to fall back upon the easy cynicism and untruth of the statement that one lot of office-holders is as bad as another. The Record and Guide is not defending the exist¬ ing administration of the Police Department; it is interested chiefly in other branches of the city government; but it is well to keep in mind that reform officials that come into power upon such "moral issues" must necessarily prove to be disappointing and that the responsibility for this disappointment lies less with them than with the difficulty of the task by which they are con¬ fronted. Leaving the Police Department and certain minor mat¬ ters aside, the administration has certainly acted with great wisdom and foresight in formulating its policy and providing the necessary ways and means. It has realized more than any preceding administration that New York is a great and growing city, whose expansion is dependent upon a comprehensive sys¬ tem of public improvements, and it has endeavored to arrange for these improvements on a liberal scale and in an enlightened spirit. Its misfortune is tliat its present term of office will expire before its work is more than begun, but that fact doeff not make it deserve any less well of the property-owners, or of tbose people who are interested chiefly in economic and efiicient municipal administration. From this point of view the great disappointment is that no attempt has been made to reorganiae the city departments, for that is undoubtedly a reform of the first importance; but such reorganization is practically im¬ possible without legislation, and it is doubtful whether the necessary legislation could be obtained. It all comes back to the statement that we are governed chiefly from Albany, and that local administration can never be either so bad as their critics declare nor so beneficent as their supporters expect. Real Estate Situation. THE real estate market during the past week has beeu almost devoid of interesting features, as was only natural during election week. The sales that have taken place have been similar in character to those which have been announced during the preceding weeks. The most important transaction is the purchase of Aeolian Hall, the new building on 5th avenue, just north of 34th street, for investment purposes by Mrs, Francis Burton Harrison. The building was owned by the cor¬ poration known as No. 68 William street, one of the subsidiary companies connected with the New York Realty corporation, and its sale has some interest in indicating that the large dealers interested in the United Realty and Construction Com¬ pany do not propose to make that corporation a holding com¬ pany any more than can be helped. In some cases they may be obliged to "salt down," as it were, some large buildings which cannot be sold to advantage, but apparently they do not pro¬ pose to embarrass themselves with many such properties. It is to be a speculative and a building company rather than an investment one. In this case, however, their remains obviously a good chance for the organization eventually of another big corporation which, while not avoiding building operations en¬ tirely, should be chiefiy devoted, as are so many of tbe Boston real estate companies, to buying and holding real estate as an investment. There is no reason why such a company with an abundance of capital and shrewd management should not be able to build up a large and remunerative property comparable to one of the old Manhattan estates. The piece of news in which real property owners are likely to be most interested is the plan of the administration to readjust the Sinking Fund payments, for if that plan is carried through it would mean that from $8,000,000 to $10,000,000 less money would have to be raised every year by taxation, and this saving would involve a diminution of ten per cent. In the tax bills. The necessity of this readjustment has been frequently pointed out. It was Edgar J. Levey, now President of the Title Insurance Company, but f.t that time Deputy Comptroller, who first called attention to the absurdity of a Sinking Fund which at the expiration of the obligations in 1928 will have a surplus estimated at about ?300,000,000, and which results in adding unnecessarily more than $8,000,000 every year to the tax levy. The manner in which this anomalous condition of things came about need not concern us here. It is sufficient that there is a" possibility of saving more than $8,000,000 every year to the tax¬ payers without in any way doing an injustice to the city's creditors or hurting the city's credit, and it is proof of the busi¬ ness good sense of the present administration that it has made it plain from the start that it proposed to save this amount ot money if possible. The difficulty, apparently, was that the various kinds of in¬ come now paid into the Sinking Fund were pledged to thai* Fund, and could not be recovered without breaking the con¬ tract with the city's bond-holders. The Deputy Comptroller, Mr. James W. Stevenson, has, however, hit upon a plan which accomplishes the result without doing any violence to the city's "contractual obligations." His plan is, in brief, to obtain per¬ mission from the Legislature for the city to issue a new class of securitiea, "the proceeds of which shall be paid into the Sink¬ ing Fund for the reduction of taxation, and which shall be issuable only to the Sinking Fund Commissioners, and only to the annual amount by which the revenues of the Fund exceea its normal, safe, sufficient and scientific annual debt instal¬ ment." This plan is stated to be technically legal by the Cor¬ poration Counsel, and in that case we are unable to see how any objection can be raised against it either on grounds of public policy or justice. And, as a matter of fact, no such objection has been forthcoming. Technically, of course, it la unwise to sell bonds to pay for current expenses, but since the bonds sold really represent current income, which has been practically sequestrated by foolish provisions In existing laws, this technical objection falls to the ground. It is not sur¬ prising, coBseQuently, that Comptroller Qrput bas ^een able to