The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1896-09-26

Kew York. Sept iS.-,To the Edltor)
~ nave been asked to give an opinion
regarding the criticisms Of Mr. Ham
moud's railway construction. particu-
larry aA TO the adverse influence Of the
Developments at Flavel There Is little
use attempting to form opinions unless
We are willing to 20 down 10 hard bot
tom and get Il solid foundation for
labor. but any one who II not willing
To give these 10 n subject should not
hold positive opinions. much less give
vent to criticisms.
RISE AND FALL OF REAL ESTATE.
Although the railway 10 Astoria Is
well under way. there has as yet been
no pcrccptible change In real estate
values or real estate sales Some OF
us expected none, The writer. In cor
responding with Dr. August C. Kin
ney regarding the railroad subsidy in
1888 remarked that "cven with rail-
road. II s just as well FOR Astorians
TO give up expecting the prices that
prevailed IN lSSg" Many persons doubt
less have expected that the moment
railway was assured. there would be
rush from the outside 20 purchase
Astoria property There Is now dis
posltion to and a scapcgoat and blame
somebody for the lack Of real estate
activity. Mr. Hammond has been Sc
lrcicd apparently 10 perform the func-
tlons ut the goat In that line and as
his mode ~ hutting against antag-
onists Is gentle and cuncillatory one,
he IN as safe goat as could have been
selected But let us look further for
the causes of real estate inactivity,
In doing &c., let US 70 back To the very
beginning of the greatest real estate
speculation this country has ever had.
that movement which began about 1887
and continued until about 1890 The
prime movers. by which we mean the
first movers, in this speculation. were
about as innocent ot any speculative
intentions as any investors in the coun-
try. The first movement Of capital
westward was from quiet. well-to-do
persons In the smaller towns in the
East, who were seeking good rates Of
interest. but nothing speculative. Then
those who were not In comfortable cir /
cumstances. and therefore had greater |
need of large interest rates. followed !
These classes sent their money west /
seeking ten per cent mortgages safely I
secured; ana the earlier mortgages /
We're, as a rule, so secured, The money |
thus flowing westward, and passing /
into the hands Of western land owners, .
produced two results. Money being .
so readily obtaiuable on western prop /
erty, this property began to increase /
In nominal value, Also the western .
owners, having this money, were en-
abled 10 speculate. The boom was
common view. that innumerable east
crn men sent on their money TO pur-
chase wildcat land, is ninety per cent
erroneous. As western lands rose In
nominal values western appraisers for
eastern mortgages, In good faith but
gave higher ratings on west
ern land 10 the eastern lenders, con-
the higher values as perma-
nent, The west was thereby enabled /
TO borrow still more largely and spec
ulate more largely, running land still
higher, and drawing still more Eastern
money upon a safe so per
cent margin" of security. Then the
Coast went wild Town lots became SO
many poker checks, bought not because
Of their income-paying value, but be-
cause someone else was expected pres
emily to bet higher on them.
This speculative movement spread
gradually over the country, moving
westward, 1t first came under the
writer's notice in Southern California
Then II spread to middle California,
and town sites were laid out in every
direction. Coming northward, It reached
Oregon and Washington generally in
1888, having first reached the larger
towns 49, Portland Tacoma. Seattle.
Then It spread to the smaller towns
and villages Albany, Salem, Oregon
City, The Dalles, etc,-even TO little
Hood River Last of all. the wave Of
speculation reached Astoria, few
months only before 1t began to recede
CONFIDENCE THE KEY.
The interest-paylng power on proper
ties most inflated ceased almost imme-
liately upon the stoppage of an up
ward movement, because interest on
on such properties was be-
ing paid out of profits from the rise Of
values. The other classes Of mortgages
quickly followed, suit in defaulting on
interest, The value of the security II
rapidly fell below the mortgage value
and the great body of Eastern innocent