The herald., 1893-02-03
FRIDAY, FEBRUARY 8. 1898.
SOMETHING ABOUT MONEY AND RIAL
ESTATE.

Thomas Magee's Real Estate Circular
for the month of January contains a
number of interesting facts relating to
realty and the movement of money in
San Francisco. The Bay City, in our
opinion, is suffering from a sort of busi-
ness paralysis. ANY one who has gone
there during the past three or four
years cannot fail to have noticed that
the disposition to complain of hard
times is growing steadily. The average
business man is more disposed to groan
than to put a cheerful face on things.
1t is true that great many very hand
some business blocks have been put up
in that city which give it Fictitious air
of prosperity. The Mills building, the
Crocker bank block, the Hibernian
bank, the Donohue block and the Ger
man Saving and Loan building would
grace any city, and the fact that such
large sums of money have been in
vested in them is pretty good evidence
that the capitalists of San Francisco
have confidence in the future of the
place.
Magee's Circular has something to say
about investments in real estate which
not only applies to San Francisco but
to other cities, Los Angeles amongst the
rest. Speaking OF investments in real
estate the circular says:
The great majority of buyers, as
usual. are now reversing the rule of true
real estate wisdom, which is to buy
when there is q preponderance of sell
ers. That is the time for bargains, but,
because he would then be alone, the av-
erage buyer has not enough mind of his
own to invest. He will only buy with
the crowd, and, buying then, he pays 25
to 75 per cent more than fair price.
Similarly the average seller will not cell
when everybody wants to buy. The
offer of a very high, or even double
price, usually only results in causing
him to advance to treble or even quad
ruple prices. These facts have much to
do with the periodical times of real
estate initiation and depression. The
crowds rush in to buy when times are
good, and utterly refuse to buy in sea-
sons of depression. The result is inha-
tion in the one case and great fall of
prices in the other. The lonely man Of
good sense-and he is very lonely-sells
freely at full prices in the one
stage and buys even more fully
in the other. The crowd in the
good times preach everlasting and
rapid advance of real estate prices, and,
eenselessly stopping over in bad times,
prophecy everlasting depression and q
continuous fall. Real estate wisdom g
path, meantime, is the medium way
with only here ana there traveller. Ir
view of the special causes for dull times
and low prices, the wonder now is MOI
that real estate is dull and prices droop
ing but that the aggregate sales are no
smaller and rates still more reduced
We have, however, MISUNDERSTANDING
confidence-in the future of the city
and of it's ultimate deliverance from thu
power of the railroad monopoly. Henr,
v said of his small and ill-equippet
army, on the eve of great battle, Gal
things are ready ii our minds be so.'
Here and now all things are ready TO
pushing San Francisco ahead if he
peoples minds were even half ready, TO
the advance money-the chief sinews TO
industrial and development as for al
other wars-iH here in abundance; al
materials of men, skill and knowledg
are mere, tUUs We HOpo hUOH W see ~
of these means freely availed oi
and real estate depression and fallinl
prices brought to an end.
Mr.. Magee points out the fact that tn
people who really make and sustain res
estate values are those who create busi
ness; who build railways, put vessel
on the high seas, open up mines, and il
other ways broaden and widen the re
sources tributary to their city, and no
the people of wealth who employ thei
capital in lending money on real estate
Thus. though the deposits in the Sc
Francisco savings banks increased $40
000,0 600 last year, and have attained tn
enormous total of $107 ,000, 600, he think
that this is drawback to the Bay city
Men OF wealth find that they can ge
from 5 to 81 per cent for money fror
these institutions and they place it i
the bank vaults rather than employ
in the expansion of business or in pre-
ductive industries. 1t seems paradox
ical that there are circumstances i
which these institutions may really re
tard the advances Of city, but Mr.. Ms
gee presents several views of the matte
that possess great force. We quote:
Money tends downward, and, in vie'
OF an increase of nearly ten millions {
dollars in our city savings banks in 1885,
the dullness OF real estate, and therefor
q lessened demand for money for its pul
chase or improvement, we are surprise
that reduction has not ere this o.
Cured. Choice loans can, it is true,
made at 81 per cent but they must
very choice to secure that rate. Thel
was very good demand from countr
borrowers in January. Money is wort
from to 10 per cent IN Portland, Or