Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-02-03

fore entering on the discussion OF any OF
\ these matters, it is due to all parties to say
that investments are made only with the
| approval of the Finance Committee. con-
sisting of five members, and OF which am
/ q member ex-officio
| Plaza Hotel
The report alleges loss on this property
of ses3, ,99a The Superin tendent of Insurance
uses this language In connection; "In prop
| erty 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 appraisers
| 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 ~, 500-
600 is q man eminently qualified to give an
opinion on such a question, but 1t is also u
and character within a few weeks testified
before the Supreme Court of the State OF
New York that, in his judgment, the prop
erty at the present time is worth $4,000, COO.
From your point of view, then, is it not lair
to conclude that the alleged loss may, after
all, exist only as . matter of opinion?
But the case will bear one more comment
This property is US finely located as any on
Manhattan Island for hotel purposes, and,
perhaps, as finely as any hotel property In
the United States. 1t is in the line of in
creasing values; and, in my Judgment, will
y
on the original investment
Home Office Building.
The report alleges . loss on this property
of S36i 295. Its book value is 81, ga 295, and it
enters the Superintendent's report at 81, $780,
OJ0 To illustrate again how opinions vary
as to the value of real estate.
let us make parallel between this
and property OF similar character
in New York and draw q conclusion. Take
ing for the purposes of taxation and place it
beside the same value OF the Equitable Life
Assurance Society's home office building.
aH.on Tss official Of nome for oSoa ssS
ing is sle5o,ooO; OF the Equitable
home office building, sS,sO0oou. A
statement of the figures at which
each property was entered in the assets of
its respective company. December 81 1890,
is as follows: The home office building OF
the New York Life, 81, ,9l4, 900; home Office of
the Equitable. SIS, 10000.
The departments estimate Of the value Of
our property is approximately so per cent,
while the assessors figures for the purposes
of taxation are little more than 80 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 building, we can
hardly draw a conclusion from that basis,
but figuring from the value placed upon it
proximately S7,600,O0O if the book value OF
our home Office were accepted at par.
l cite these figures as strongly bringing
out the truth OF my suggestion concerning
is familiar with the eminent success of the
Equitable Life Assurance Society, and no
one would be so absurdly unjust to that
cOmpan5 as to allege loss =. on aoO this ads
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 alleged is, after all, perhaps, matter of
opinion? In fact, could cite you good au-
thority on real estate values in New York
who will place on our home Office 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 1863 and e1-
eeptionally well located ANY one who
estate valuation in New York in 20 years
Will agree that there has been during that
period n heavy advance in this and all prop
erty similarly situated. The building has
not been allowed to deteriorate in any
particular, and it would seem that our
statement OF actual cost, Sl,9A,0c0, was q
very conservative figure.
Holbrook Hall, Now the Yosemite.
On this item q loss has been made. Briefly, |
the facts are these: In 1882 we made loan |
on this property when in course Of con-
struction, and after the man to whom the |
loan had been made had spent not only his |
own means Ia considerable sunny, but the |
money loaned him well, he failed and we |
we're obliged to foreclose. The cost of the |
property to us, after foreclosing, |
was very little more than the amount |
Of the loan. The work OF completing the |
structure was then placed in the hands of |
An eminent constructing engineer. He sup |
his own knowledge by employing |
an architect, and the building was finished. |
q l1ad r--sN l.-S ~ -.
ants and would have paid a 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 q bad investment |
Of money. In carrying out theory of fire.
proof construction. the architect made the
same error precisely that the architect of
Vice President Morton's hotel, the Shore
nam, at Washington, made, and both build
ngs had to be reconstructed for substan-
tally the same reason. The mistake of the |
.rchitect in each case was in creating such
/ condition that dry rot speedily destroyed
'he timbers and the
Buildings Had to Be Vacated
It once. 1t was then discovered that in ad-
lition the foundations of Holbrook Hail. put
n by the men who first obtained the loan,
we're insecure. and as a final result the whole
tructure had to come down. 1t was then re-
,uilt under the supervision of McKim, Mead
White on the most approved lines, and
n this country to-day. The abso-
ute loss to US, therefore, was ap-
the cost Of the first
building. This we charged Off and entered
,ost OF the present building and ground. |
rhe figures, s729 ,066, the appraiser of the In
urance Department refused to accept. Four
hundred and eighty Thousand was named
instead, and entered in the Insurance De-
findings 1t is proper to add
hat on our present basis OF rental
his property will yield, when fully rented,
placed upon it by the Insurance Department
nd would yield a little more than per
ent on our valuation, (S729,060l. 1 do not
elf and the Finance Committee in this mat
er. The claim of infallibility in the invest
nent or reinvestment of hundreds of mil
ions OF dollars is one have never set tfp.
The Paris Property.
This property was purchased some years
go under the supervision OF the Chairman
f our Finance Committee, who was on the
round at the time. His investigations as
0 the value OF the property were most
and the purchase was made with
IL due care. That the rental value of the
property has since deprecated is true, and
hat there is an apparent loss is true, but IL
he Superintendent had not only secured an |
ppratsal of the value of the property as it
ow stands, but also had investigated the
alue of the property when it was pur-
hased, he could have fully satisfied his
uty examiner, and at the same time |
ould have given you n satisfactory reason |
or the original price paid But no such in |
estigation was made, and as his findings
eem to do us injustice not only as above |
tied, but also in the value placed upon the |
property now, the matter will bear word |
nore in explanation.
Il was brought to my notice during the
uperintendent's investigation that the fig
res supplied by the Department of Taxa
ion of the French GoYernment ON his re- |