The Wheeling daily register. [volume] (Wheeling, W. Va.) 1864-1878, 1875-12-10
The Per Cent on Real Estate.

| From the Springfield RepuDllcau'
Nearly every dividend day shows low
or and lower profits in the great INDUS
tries. Ofthe semi an nusl dividendpayaoie
at Boston this week, the Amoskeak mi!is
reduce from per cent to a, the hsmil-
ton from 4 to 8, and Stark also from 4
to 3; the Langdon and Appleton pass
These continued reductions in the return
on manufacturing capital suggests SONS
comparison with the returns on real
estate The usual basis for the calculs-
tion of the rents is 10 per cent. on the
whole value of the property. Reck-
onIng 2 per cent. for taxes and lnsur-
ance this leaves a return of about per
cent on the investment, or one per cent.
above the current rate OF the investment
! on mortgage, and per cent, above the
mortgage rate to which we are now re-
turning. The time is close at hand
however, when the greater security OF
the real estate investment will reconcile
capitalists to lower rate of rent. For
the past ten years the Government bonds
has been the great investment tor all
classes who demanded security first and
profit secondly. But the per cent.
Government bond will soon be extinct,
and the 5 per cent will be held at high
price by the readiness with which Tor
elgn investors will take them. The
transfer of the faith felt in Government
bonds has met II melancholy reou1, and
the result Of the withdrawal of the one
and the default of the other Will be 10
drive this class of investors back upon
their former chief reliance, real estate.
Standing thus first Ms respects security,
real estate in many places has another
| quality which few other investmentsh have
at all, aud scarcely any in an equal de-
| gree. 1t grows in value. 1t has IT'S
| dcprcsslons and set backs, tn be sure, but
| in all large town and cities and the
districts which iced them, and whose
property is Identical with theirs, real es'
tate, generation by generation, steadll y
increases IN value. In many localities
not a single ten years passes by without
| a decided increase, aud in not few
places score of years doubles the value.
So inevitable is this increase in the long
run that it ought TO be and will be nj.
lowed to Offset the cost of repairs and
betterments. The rate ofrent upon land
itself should be much less than upon
buildings, and in many places in this
country, and still more in England, 1t IL
customary to separate the two elements,
by paying ground rent and rent on
the buildings separately. The land, OF
course cannot burn up, and requires no
insurance aad is there, even in more
emphatic sense than The buildings, while
it is the element in which the increase
of the value adheres. In the cities OF
England, this prime quality of real cs'
tatelnvestment reduces the rate on the
highest priced property to three or foul
per cent. In this country, the clement
OF ground rent ought not to be above Che
government rate OF borrowing now 4.
and D while III" average of rent for botf
! building and ground Is likely 10 come
down to per cent. Such reduction
will of course be part of the genera
movement by which the mortgage rate
is reduced TO & per cent and let ia hope
taxes also return 10 "A more telerabl'
| rate