AN UNSALABLE FOOD-SURPLUS

[THE growth of city markets where all goods are handled by middlemen, and the buyer at retail is unacquainted with the conditions of production and little able to judge of quality, often brings about odd situations and what appear to be illogical prices. Many a daily paper will furnish an example; here is one from the New York Times of June 1, 1912. Such cases are popularly explained as due to "monopoly" trying to keep up prices by destroying the surplus. Cases of monopoly action similar to this occur, but are the conditions in this case "monopolistic"?]

While the cost of living is mounting steadily and beef is bringing civil war prices, tons of fresh food fish are being shipped daily from Fulton Market to Barren Island to be made into fertilizer. For the last three weeks a steamer, loaded with newly caught porgies, sea bass, butterfish, weakfish, and other varieties, has made one or more trips a day from the offal dock. On some days more than 200 barrels of fish in good condition have been destroyed-enough to supply 40,000 meals. On these days more fish have gone over to Barren Island than have been sold to the retail trade in New York City.

Wholesale dealers at the Fulton Market say they have to destroy the fish because in this city the people are afraid to buy it at low prices. Exceptionally large catches are reported. all the way from Cape Henry, Va., to Seabright, N. J., a 300mile stretch of coast. One Fulton Market dealer said yesterday that the supply of fish this year is 75 per cent. larger than the average season. Although nearly all of this fish is handled in New York Harbor, the consumer in New York City is benefited but little. One dealer estimated yesterday that not more than 2 per cent. of the fish received here is eaten in New York City: Other dealers placed the percentage a good

deal higher, but they agreed that, while fish is shipped from New York as far West as Chicago and St. Louis, and sold there cheaper and in greater quantities than usual, high prices prevail in this city, and the quantity sold here is about the same as in ordinary seasons.

One wholesale fish dealer yesterday gave an explanation of this.

"The chief reason that good eating fish has to be destroyed," he said, "is that dealers who place it on sale at low prices cannot sell it. The average woman does n't know how to judge the condition of a fish, and her only test of its quality is the price. If it is lower than she is in the habit of paying she is afraid the fish is stale. She won't buy unless the dealer charges two or three times what would be a fair price. Her impression often is that, if the fish were really fit to eat, it would have been put into cold storage, instead of being sold cheap. This is a mistake, for cold storage is a costly process and we do not use it any more than is necessary. We can much better afford to sell fish outright at a lower price. At present we are paying 25 cents a barrel to have good fresh fish destroyed, but we lose less that way than we would by putting it into cold storage.

"Take bluefish, for example. It is considered a luxury and is much in request at present. For several years it had almost disappeared from these waters. Last year it returned, and this season it is being caught in unprecedented quantities. We sell it from 4 to 8 cents a pound. The retailer sells it all the way from 10 to 30 cents a pound. Those who sell it so low

as 10 cents are the peddlers and small shopkeepers. While their fish is the same in every respect as the other, it is nevertheless under suspicion because of its cheapness. Very little of it goes at 10 cents a pound.

"Another factor is the belief of many people in this city that fresh fish can be obtained only on Friday. They think what is on the market any other day is stale or left over. As fish day only comes once a week the retailer has only one good

selling day in the week, and he has to make a larger profit, and he sells at an advance of from 300 to 500 per cent.

"We would rather sell at any figure than have it wasted. It costs something like 2 cents a pound to catch the fish we send over to Barren Island and it costs 25 cents a barrel to get rid of it in this manner. It would be cheaper to give it away. We cannot put it into cold storage because that would mean a greater loss. It costs three-quarters of a cent a pound to freeze fish and a quarter of a cent a pound for every month it is in cold storage. And only a limited supply of cold storage fish can be disposed of.

"Weakfish sells at wholesale from 2 to 5 cents a pound; at retail from 8 to 20 cents. Butterfish sells at wholesale from 114 cents a pound to 4 cents; at retail from 8 to 20 cents. The difference runs about the same between the wholesale and retail prices of other varieties. The country peddler buys fish at 5 cents a pound and sells it at 10 cents, while in this city the retailer, who buys at the same price, less the freight, sells at 20, 25, and 30 cents a pound. They prefer, even in exceptional seasons like this, to buy in small quantities and sell at high prices, and this policy is favored by the attitude of the consumers who suspect anything on sale at a lower price than they are accustomed to pay. This season a fish peddler could go about with the very best of fish and make a good profit offering it at 25 cents a panful, but, if he did, the consumers would be so alarmed that they would demand an investigation by the health authorities.

"The public is capricious in another respect. It has a taste for winter fish in summer and for summer fish in winter. When fish is in season, at its very best in condition and flavor and at its lowest price, the demand usually shifts for some other variety that probably is costlier and poorer in quality.”

RENTALS OF URBAN REAL ESTATE

[THE Principles of City Land Values, by Richard M. Hurd, president the Lawyers' Mortgage Insurance Co., New York, 1903, contains numerous illustrations, maps of cities, diagrams, and comparisons of values based on wide and painstaking study. The extracts which are printed in this book with the permission of the author, are from the latter part of book, and give the general conclusions (page 122).]

Basis of gross business rents. While gross rents are fixed by competition, the question arises, How do bidders determine what they can pay? The basis differs radically between business property which earns income for the occupant as well as the owner, and residence property which for the occupant consumes income 1 only.

1

The gross rents of business property are gaged from the economic standpoint, these being in the long run the normal proportion of what property can earn for the tenant. The proportion of gross receipts which a shopkeeper pays as rent varies according to his ability as a tradesman, the character and class of his business, and the location, a fair average being from 20 to 40 per cent. The better the location for retail trade, the higher the proportion of receipts paid for the rent. For retail trade the location and the consequent advertising perform the vital function of selling the goods, and the shopkeeper can largely devote his energies to selecting what the people want. Similarly, though in a less marked way, prominent office buildings help to advertise the business of their tenants. On the other hand, mercantile property not

1 [Pecuniary income is here meant. Residence property occupied by a tenant earns pecuniary income for the owner, and yields to the tenant an income of uses which his money buys.-ED.]

on traffic streets, wholesalers, etc., pay but a small proportion of their receipts as rent, the saving, however, going to the hire of drummers to sell goods.

The gross rents of residences. The gross rents of residences represent the proportion of income which various classes can afford to pay for house rent. While the return for such expenditure is chiefly the satisfaction of suitable surroundings, social ambition influences all classes to live in the best neighborhoods within their reach. The proportion of [house] rent to income varies from 15 or 20 per cent. among the wealthy, up to 25 or 35 per cent. among tenement dwellers. Operating expenses. Taking as gross rents the amounts actually received and not the full rental value, from which an allowance for vacancies must be made, we may note first the great difference in the proportion of operating expenses according to the class of property, this varying from 10 per cent. for one- or two-story brick store buildings, up to 50 per cent. for office buildings or apartment houses. Explaining this difference is the fact that in office buildings and apartment houses, from 20 to 25 per cent. of the rent represents the payment for services, such as light, heat, elevator, janitors, cleaning, etc. If from gross rentals all service charges are deducted, the other charges, taxes, insurance, repairs and rent collecting, approximate in percentage quite closely in all classes of property.

Average taxes. Average taxes vary somewhat in different cities. Taxes on individual properties in the same city vary more sharply owing to irregular assessing by tax officials. Figuring the average of a large number of American cities, taxes range from 14 to 12 per cent. of actual value, the chief exceptions being in Washington, where taxes amount to 10 per cent. (the United States Government paying half the taxes), and in San Francisco, where taxes amount to 10 per cent. (the city having no bonded debt). The chief errors of assessors come from their overestimate of external appearances