The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-02-05

DelOre entering on the discussion OF any OF
these matters. 1t IS due 70 ali parties to say
the investments are made only with the ap-
proval of the finance committee, consisting
Of five members, and of which l am mem
Der ex officio.
PLAZA HOTEL.
The report alleges loss on this property
OF S2S3. 1874, aud the superintendent of in
surance uses this language in connection:
in property OF this character and of
such great value the opinions Of real estate
experts of equal ability and integrity often
differ and other able and conscientious ap-
praisers might value this property at higher
figures and even beyond its cost"
The gentleman who by direction Of the
superintendent Of insurance valued this
property at 81. 100000, is man eminently
qualified to give an opinion on such a Ques.
ton, but it is also fact that another gen
tleman OF equal ability and character
within few weeks testified before the
supreme court of the state of New York
that in his judgment the property at the
present time is worth SO, O00, 900. From your
point Of view, then, is it not fair to conclude
that the alleged loss may after all be only
matter OF opinion.
But the case will bear one more comment:
This property Is as finely located as any on
Manhattan Island for hotel purposes, and
perhaps as finely as any hotel property in
the United States. It's in the line of iu-
creasing values, and in my Judgment, will
ultimately yield the company a large return
on the original investment
HOME OFFICE BUILDING.
The report alleges loss on this property
of 1856, 295. Its book value is 8, 9l4, 295 ,
and 1t enters the superintendent report at
81 ,550, 600. To illustrate again how opinion
may very AS to a parallel between this and
property of a similar character in New York
and draw conclusion. Take the value
placed upon our home o flee building for
the purpose of taxation and place it be-
side the same Of the value of the Equitable
Life Assurance Society's home office build.
ing. The official valuation for purposes of
taxation of your home office building is
S1,050,000; of the Equitable home Office
building, S3,SOO,0OO. A statement Of the
ngures at which each property was en-
tered in the assets of its respective COM
pany, Dec. 81, 1890, is as follows:
The home Office building of the
New York Life, S1,9l4,000: home
office of the Equitable, SIS, 10000.
The departing nt's estimate OF the
value of our property is approximately so
per cent. while the assessors figures for the
purpose of taxation are q little more than
so per cent. OF its book value. As the
gentleman who appraised our home office
building has never made an appraisal OF the
value of the Equitable's home office build
AhE VIC Cdl uIdW u
that basis, but figuring from the value
placed upou it by the assessors its total
value would be approximately 50, 900, 900 If
the book value Of our home Office were ac~
cepted at par.
cite these figures as strongly bringing
out the truth or my suggestion concerning
opinions as to real estate value. Every one
is familiar with the eminent success of the
Equitable Life Assurance Society, and no
one would be so absurdly unjust TO that
company as TO allege loss Cd this one par
Gel Of real estate of 81, SOC, COO, or indeed
any loss at all. From The policy holders
view, therefore, is it not worthy of your
consideration that in this case as in the
matter of the Plaza hotel, the loss as alleged
is, after all, perhaps. a matter of
opinion9 In fact, could cite
you good authority on renl estate values
in New York, who will place on our home
ollie building to-day a valuation in excess
of its cost. There are many reasons why
this estimate would be conservative. In
the first place the real estate was purchased
in 1869 and is exceptionally well located
Any one who knows anything about the
history of real estate values In New York
for twenty years will agree that there has
been during that period heavy advance in
this and all property similarly situated.
The building has not been allowed to dete-
riorate in any particular, and it would
seem that our statement of actual cost,
$l,9l4, 600, was very conservative figure.
HoLBRooK HALL, NOW CALLED THE Yo-
semitic.
On this item a loss has been made
Briefly, the facts are these: In 1882 we
made loan on this property when IN course
of construction, and after the man TO whom
the loan had been made spent, not only his
own means, "a very considerable SUM, but
the money loaned him as WELL he failed and
we were obliged to forecloSe. The cost of
the property to us after foreclosing was
very little more than the amount OF tho
| loan. The work Of completing the structure
| was then placed in the hands of an eminent
constructing engineer. He supplemented
his own knowledge by employing an archi-
| tect, and the building was finished. 1t was
| filed with a desirable class of tenants
and would have paid fair return
on its cost, but for two errors
which could not have been foreseen and
which do not justly subject the finance
committee to the charge of making bad
| investment of money. In carrying out a
| theory of tire-proof construction the archi-
| tect made the same error precisely that the
| architect of Vice-President Morton's hotel.
| The Shoreham," at Washington, made, aud
| both buildings had to be reconstructed for
| substantially the same reason. The mistake
Of the architect in each case was in creating
such condition that dry rot speedily de-
stroyed the timbers, and the buildings had
| to be vacated at once. 1t was then
discovered that, in addition, the
foundation of Holbrook hall, put
| in by the men who first obtained the loan,
were insecure, and, as a final result, the
whole structure had to come down. 1t was
then rebuilt, under the supervision of Nc
Kim, Mead g. White, on the most approved
| lines, and there is not finer structure of
| its class in this country to-day. The abso-
| lutte loss to us there was approximately the
! cost of the first building. This we charged
| off and entered the property in our annual
statement at the cost of the present buildings
and ground. The figures, 1923, 066, the ap-
| praiser of the insurance department refused
| to accept Four hundred and eighty
| thousand was named instead, and en-
| tered in the insurance departments find
| inRs 1t is proper to add that on our pres
emit basis of rental this property will weld,
| when fully rented, a net income of 615 per
cent. on the value placed upon it by the in
surance department, and would yield little
more than per cent. on our valuation
| 1925. 066) / do not desire to evade full re-
sponsibility for myself and the finance COM
| mittee in this matter. The claim of infallI-
bility in the investment and reinvestmens
| of hundreds of millions of dollars is one
have never set up.
THE PARIS PROPERTY.
4. This property was purchased some
| years ago under the supervision OF the
chairman of our finance committee, who