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Real estate record and builders' guide: v. 73, no. 1891: June 11, 1904

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June II, 1904. RECORD ANB GUIDE 1369 d \^ •» ESTABUSHED-^M^CHSIV^IBBS. DE/0TH)I0f^LEsrAJE.BuiLDIf(G *tRCJ(rrECTURE,t(cHlSnlDLDDEG<»fIIOll. .Busii/es5 Alto Theses OF GeiJer^ iKitRpai. PRICE PER YEAR IN ADVANCE SIX DOLLARS Published eVerg Saturday Communications should he addressed to C. W. SWEET, 14-16 Vesey Street, New YopK J. T, LINDSEY, Business Manager Telephone. Cortlandt 3157 ''Entered al the Fost Office at New York, N. T.. as second-class matler." Vol. LXXIII. JUNE II, 1904. No. 1891 IT is a year now since the strikes in the New Yorit building trades and the collapse in WaU street put an end to tbe great speculation in Manhattan real estate, wliich had talcen place in 1901 and 1902. During the season of 1903-4 while rent¬ ing has been good, and while a lively speculation has been tak¬ ing place in certain kinds of tenement house property, the actual purchasing demand for real estate in Manhattan was less than formerly. Residences of all kinds, small and gi'eat, have been difficult to sell. The insistent demand for business property owing lo the expansion of business decidedly decreased, the Sth avenue section being the only exception. Investors did not want to put their money in real estate; and money lenders have been loath to advance cash with real estate as security. Yet in spite of all these depressing conditions the so-called "boom" of the preceding years has not been follow.ed by a collapse. These districts of the city, in which the most considerable ad¬ vances had talten place became dull, but there was no wealtness. Even the builders of expensive residences managed to get out, if not prosperously, at least without disaster. The only wealc spot has been in the one apartment-hotel district, and there over-building had manifestly talten place. These facts show clearly that the Record and Guide was right in claiming that the speculation of a year or more ago was justified by the busi¬ ness growth of New York, and the readjustments consequent on that growth. Yet the contrary opinion was prevalent in the financial district and accounts for tbe extreme conservatism which the chief money-lending institutions have used in buy¬ ing real estate mortgages. This conservatism has been carried further than was necessary. New York is under rather than over-built at the present time; and there is room for a large amount of new construction of all kinds—apartment-hotels ex¬ cepted. It is probable that this fact will be discovered during the coming wiinter and that building operations will not be ham¬ pered next season by imnecessary caution on the part of money¬ lenders. X S the spring passes into summer the general outlines of the ■**■ business situation become very definite. There is a mani¬ fest slackening of industrial and commercial activity through¬ out the entire country. This slaeltening is much more con¬ spicuous in the manufacturing districts of the East than it is in those parts of the West, which depend chiefly upon agriculture for their wealth; but it is spreading slowly but surely through¬ out the entire countiT. The confident business expansion of 1902 has been superseded by a disposition to go slow, which is having a depressing effect on railroad earnings. The con¬ sequence would undoubtedly be a decline in the price of rail¬ road and industrial securities were it not that the conditions of the money market has already effected a drastic reduction; and the doubtful question at the present time is whether this reduction, produced as we have said, during a period of com¬ paratively prosperous business, has been sufficient to discount the real change which has talten place in the volume of trade and the profits to be derived from it. Tbe assertion could be made with some confidence that the falling off in prices, which took place last summer, was suflieient provided the railroads were able to reduce expenses in the same proportion that gross earnings are reducing themselves, but so far the loss in gross income has been equalled by the loss in net income. The prices of labor and material still remain unmanageably high; and this fact makes investors wonder whether some further reduc¬ tions and readjustments will not have to be made before a proper equilibrium is established between business and profits. Consequently it is improbable that the easy money market and the idle capital which is being accumulated will be used to any great extent during the coming summer for the pur¬ chase of stocks. Men will prefer to wait until crop prospects have become more assured, and until it has become apparent that coming changes will be for the better rather than the worse. If the yield of cotton is as large as it promises, and if the grain crops are as good ag the average, there seems to be no reason to anticipate any severe or prolonged depression. The consumptive power of the country is enormous; its indus¬ tries are better organized than ever; the farmers are, on the whole, in a safe and prosperous condition; and recovery should be rapid as soon as it is apparent that it is justifiable. THROUGHOUT the spring the saving fact about the steel business was tbe large demand for the lighter grades of manufactured steel. While rails and structural shapes were being made and sold ouly in small quantities, the resources of the mills were taxed to supply the demand for wire nails, bars, and finally of plates. During tbe past month, however, the or¬ ders for these lighter products have also very much diminished; and the effect of this diminution upon the earnings of the steel companies may be serious, particularly since there is no evi¬ dence of a j-evived demand for the' heavier products. Altogether it is evident that the iron and steel business will have under any circumstances a very lean year. The consump¬ tion is, indeed, still very large, and the earnings for the current quarter will be much larger than for the preceding quarter. But this consumption is diminishing, and it is decidedly less than the producing capacity of the mills. It loolis as if the third quarter would be a very bad one indeed for the Steel Corpora¬ tion, and consequently a very bad one for the railroads depend¬ ent on the steel industry. There have been reports that a foreign trade is again being built up to replace the diminution in the domestic demand, and that this trade already amounts to 100.000 tons a month. It is very much to be hoped that such is the case, because in the long run the stability and the prosperity of the American steel industry depends upon its ability to sell its products cheap enough to get and to hold a considerable export tonnage. The events of the next year in this and otlier respects will show clearly whether the reorganization of the steel industry, which culminated in the formation of the United States Steel Corporation, has really made for efficiency and economy as well as stability, or whether it has made for sta¬ bility at the expense of efficiency and economy.' X IMONG the various projects for a memorial to the late -C^ Andrew H, Green, the most Important, and in many re¬ spects the most useful, is that for a Civic Museum for New York. Mr. Green was closely identified with many Important movements that added much to the greatness of New York as a city and to her beauty and wealth as a metropolis. It would seem particularly fitting, therefore, that a memorial to his memory should take the form of a museum which would illustrate the manifold phases of New York's life and history. The plan is frankly modeled on that of the Musee Carnavalet of Paris, which is by far the most extensive museum of its kind in the world, and one of the most interesting of the Paris museums. New York has plenty of material for such a museum, and it would have positive public value, not only in familiarizing our citizens with the historic aspects of their city, but as a place for deposit and exhibit of many interesting plans and proposals for public improvement. The value of such a museum must greatly increase with its growth, and it would undoubtedly keep Mr. Green's memory more thoroughly alive than a monumental memorial, no matter how grandiose or ornamental such a device might be. ^r- HE law suit about the lease of the Gilsey House, ^ the fact that the income of that hotel is scarcely suffi¬ cient at the present time to pay its expenses indicates one of the inevitable results of the erection lately of so many new and sumptuous hotels. The older, smaller and less well-equipped hotels are bound to go. From the revival of business in 1897 until the middle of 1903 the hotel business in New York was ex¬ traordinarily prosperous. The lessees of the larger hotels made fortunes, while even the older and smaller houses did a profit¬ able business. The trade was so lucrative, however, that rather too many people were tempted to rush in, so as to secure a share of it; and a large number of large hotels are now in the course of erection which is. disproportionate even to the needs of New York. None of these new buildings is as yet open for business, but the St. Regis will open this summer, the new Hotel Astor and the extension to the Imperial in the fall, the Knick¬ erbocker in a year or so, the Belmont and the new Sturtevant soon thereafter and finally the new Brunswick a couple of years later. Profitable as is the hotel business in New York, it is inconceivable that there will be room, particularly during a period of hard times, for so many new and spacious hotels; and