New-York tribune., 1877-11-24
prices or REAL EST1TF.

why have prices of real estate declined so
"much 7" virtually asks An Old Reader" If
the decline has been as great rs he suDpOses,
or even greater, it proves nothing as to the
adequacy or inadequacy of the supply Of cur
rency. For:
|. The amount of recorded loans on real es-
tate is actually greater than it was in pros
pcrou, times. Companies and firms, having
funds to loan on such security, report that the
opportunities to loan do not suffice to employ
the available funds, though, with property at
its present low valuation, the security Is unu-
sually good. The amount of money seeking
investment in real estate by loan OF purchase
naturally increases i'll times when other IN
ycstments become unuustworthy or unprOdt-
able.
Ii. Real estate in some localities has declined
disprop0rti0nately in value, because the trans
fer OF business from those to other localities
has diminished the demand for such property
there. But this proves nothing as TO the ex-
tent of the demand for real estate generally.
III. In times of initiation or speculative ac-
tiyity, real estate Is of all property the last to
rise, but it rises IN proportion more than other
property. In times of depression, though it is
w
erty to fall, it is very apt to fall disprOportOn-
atey These phenomena are due to the same
cause the price of real estate is peculiarly
speculative, being based upon expectations of
increase in population, business, and demand
for use.
". The decline in price of real estate rep
resents Cd a decrease III actual value, meas
ured in gold or in commodities. and (2)
an increase in the purchasing power OF the
dollar. The actual decline appears in other
countries as well as here, and has been esti-
mated, in England, and some parts of Germany,
at more than twenty-five per cent or the
former price. 70 that decline We are COM
PEELED in this country to add a shrinkage of
price due to the advance in value of the
legal-tender dollar. With currency not fluc-
tuating in value, prices here would not have
risen unreasonably in times of supposed pros
perity: land would have cost less, and houses
could have been built for less money. Then
the unnecessary depression, in times of shrink
age, would not have been as great. Men would
not have been induced to buy or to build at the
fictitious prices of 1872, and would not now
be compelled to sacrifice property for less than
was borrowed upon it five years ago.
Let it be understood that, as to real estate
and nearly all other property, return to the
specie basis is return to a more honest and
natural valuation. But it is not necessarily
change to lower prices. For the actual value
of all property land and labor included, will
advance whenever business becomes more act
i've, and industry more secure. The advance
IN actual value, as to most forms of property,
,.,lI ,,,ra than mako nm for what Ittle cbonUo
remains to be effected in the purchasing power
of the dollar. The greenback, now worth
97l2 cents, will become worth 100 cents, and
therefore would buy more if the demand
for property and for labor did not also
increase. But greater confidence III the
future will make those who have money more
willing to invest it in productive enterprises
industry will have more solid basis, and will
yield more largely; labor will be better en-
ployed, and will be able to consume more of
the products of other labor and property of
all kinds will come into greater demand. This
Improvement, it is safe to say, viii add more
to the price of nearly all kinds OF property
than will be taken oil by the increase in value
of the dollar. The only imitation that will not
cheat and rob us is an initiation of confidence,
and of legitimate production and trade, that is
based upon IA restoration of an honest and
steady measure of values. That sort OF inn
provement we can reach by resumption. 1t is
the reward insured to us, by higher laws than
any that Congress can frame, for honest pay
ment of debts. That sort of improvement,
when it comes, will come to stay.
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There is a good deal said now days. and said