New-York tribune., 1915-03-14
By NOBLE FOSTER HOGGsON.


yice.president Hoggson Brothers, con-
tracing designers, New York and
Chicago.
A great movement has swept over
this country in the last three months.
Build now" it is called. 1t has as us
basis economy and strong element OF
civic benefit, which might be termed
practical philanthropy.
The movement is succeeding because
il is founded on sound business prin-
ciples. One may build now at a much
reduced cost compared with the ex-
pense incidental to carrying out the
same operation a year ago. Contrast
ing the costs Of construction at the
present time with those of four years
ago the saving is even greater.
Economy of building, however, does
not lie altogether in the cheapness of
construction. That is only one i'm
portant element. Under certain condl-
tions it would be expensive and i'll ad-
vised to build, no matter how cheaply
the work might be done.
A building operation is primarily an
investment To regard it in any other
light is unsafe.
II capital is invested, the investor is
entitled to earnings from it. Capital
invested in a building should earn
satisfactory rate of interest, plus car
rying charges, plus enough to offset
loss through depreciation, plus re-
ward for enterprise.
Capital may be put into a building
intended for tenants, or into building
which the owners business or family
will occupy. In either case il must be
- tHrh hsnh oal Ia
for adequate return. Rent tells the
earning power Of capital invested in
real estate, whether it be rent that is
received or rent that is paid.
The obligation of capital to earn in
come does not vary, even when one
owns the building which his business
or family occupies.
What is the building owned and oc-
cupied actually worth? 1t is worth
relatively the capitalization of the an
nual rent which would have to be paid
for equal accommodations elsewhere.
II it has cost more than this, or II it
would bring less than this, 1t is poor
investment.
That the same economic principles
govern every building enterprise is the
point to be borne in mind.
This country has passed through a
period of wasteful extravaganza. There
has been a spirit of restlessness. In
the prosperity that came so bountifully
costs were not counted, and profits
flowed in unrestrainedly.
With little thought of the principles
imposed by the law of supply and de
mand, buildings of all kinds were
erected; the whole country seemed to
be one vast factory Of shrieking en-
gines of construction. Everything was
rushed. Haste was the watchword
Enthusiasm blinded the senses. In
calmer moments the activities in prog
ress would be regarded as reckless
speculation.
There was hardly a city in America
that was not overbuilt, or was not in
imminent danger Of becoming so. That
condition has passed or is passing. The
business depression of the last few
years has had peculiarly beneficial,
chastening effect. The overbuilt cities
have had chance to catch up" with
themselves, and the existing buildings,
as well as new structures, will have
an opportunity to return fair profit
on the investment.
Now, therefore, is the time to build;
not merely for sentimental reasons
or for speculative purposes, but for
sound economic ones. This applies
with equal force to the erection of
a residence as well as to the build
ing of bank or skyscraper.
The cost of materials entering into
the construction of all classes of build
ings is at low ebb. 1t is unlikely ,
that the advantages afforded by pres
ent conditions in this respect will be
met in some time to come. Indications
Of increased prices are already TO be
seen. and when business awakens. as it
is destined to do very soon. the cost Of
construction will rise to higher level.
Just now the market is flooded with
skilled labor, and choice of the best
workmen may be had. This affords an
element of saving that is no inconsd-
erable factor. For one thing, it means
speedier operation and consequent
earlier completion of the building.
Herein, too, lies the factor of practi-
cal philanthropy mentioned in the first