New-York tribune., 1922-06-25

site expenses" due Z. L. Barnett, Inc.
s9l l.f72.
Despite the fact that the risk OF
carrying the property was TO have been
assumed By the Barnett company. ,hc
site expenses include an item: Cost
Of carrying property IN excess Of rent
ais received from October !. 1920. 10
June 90. 1921. S66.is0.02." There seems
20 have been no net income from the
property.
This may be partly explained By the
fact that buildings on half Of the prop-
erty have been removed in prepGraiioa
for construction Of the first half OF the
contemplated structure. but this situa-
tion does not remove the handicap un-
der which the hotel company has to
struggle.
Despite an Apparen. absence OF SUI
fcicnt revenue from It's real estate
holdings, however. the hotel company
seems 10 have made n profitable pur-
chase. Judging from sales Of properly
in the neighborhood OF Broadway. sew
cnth Avenue and Fifty-hfth and fiity-
sixth Streets. ,he value OF tho properly
has enhanced since the purchase IN
1918.
Moreover. an attempt has been made
10 increase the amount realized by the
hotel company from tho sale OF stoeE
bv raising the subscription price from
sioo 6rst 20 sliO and later 10 Sl25
share. Although this increase only IN,
d;roc,lv Affects the returns 10 tho hotel
COMPANY. since the premium goes 20
tho Barnet company for commissions,
making 1880 for tho latter and soo'oo
Tor tho hotel company, the arrange
nent should tend 10 reduce stock seH-
ing commlssions OF the hotel company
and hiring about the receipt OF par
value. less si450. for each snare Hs
was originally contemplated
This brief summary OF what the
bntel company has hccomplishcd' or
ho, failed 10 accomplish, should ue
,ot,n into confederation when attempt
inc ~ determine what are the pros
ncc,s for the future. Admittedly INC
nu,look for a return on capital placed
;r tho venture is brighter nov than
AZ env time since the compnnys IN
corroration. Excavation work on thc
Seventh Avenue half Of the site ~
rrder wav and orders have been placed
"a, construction materials. The com
r,,., homes TO have the first hall oi
tbn building. containing 1900 rooms
cor,rie.o some time late next year
I Until then. therefore. no dehnite esu-
mate Of earnings can be obtained.
Preliminary estimates based on inc
experienee of we'll established hotcls
have been put out % sho" tnht tne
company can pay 6 per cent on us ou,-
standing capital stock. IN addl'loh 70
giving a rebate up TO 20 per cent on eH-
9endi.ures for food and lodging ior
/ timself or any one presenting mem ,
b.r's card Of introduction. and sull
bavc a substantial surplus. Whether
these expectations can be realized re-
mains 70 be seen. 81
The fact that capital invested IN THIS
rrorno,ion six years ago has so TAR
broucht no return, and there u no nope
beid out for a retu.n before the notcl
has been in operation some length OF
,ine that is. not before 1924. Thus
while 500 put in the stock in 1918 VIII
have earned nothing before 1924, the
same sum put out a. interest at per
cent and compounded semi-annunlly y
would have appreciated more than 90
This discussion does not take into
consideration the offer OF life member
ship in the proposed Commonwealth
Club. which goes with each share Of
stock. because il is OF unsettled inirin-
sic value and a. present is nebulous, to
say the least.
on the whole. therefore, in consider
ing the purchase OF stock IN the pro.
posed Hotel Commonwealth one should
realize that the venture Is highly speeu-
lative and should be in position TO as
sumo the risks involved. Even II he
decides TO speculate. he might be wise
70 purchase stock in the unlisted mar.
kct. where there is generally a small
floating supply Of distressed" holdings.
These shares were recently quoted at
$50 bid, $50 asked.