MY first purchase of real estate was No. 32 West Thirty-fifth Street, a twenty-two-foot, white marble, high-stoop building. I bought it for the modest sum of $15,000 and resold it at an advance of $500, and thought I was doing well. To-day it is worth at least $110,000. This, however, was not my first experience with real estate, for that was in 1872 when, at the request of my preceptor, Mr. Ferdinand Kurzman, I undertook for an extra compensation of $5 a month to collect for him the rents of No. 218 Chrystie Street.
The tenants of this building in 1872 were Irish and Germans, and one of the stores was occupied as a saloon by an Irishman named Ryan who catered to the worst element of the neighbourhood. Kurzman, failing to get rid of him in a peaceful way, and knowing that there was a political feud between him and Anthony Hartman, the odd though popular Justice of the District Court, waited for the first of May, when only a three-hours’ dispossess notice was required. Circumstances favoured the plan because on that day the Thomas Ryan Association were giving a picnic. So the notice was served by nailing it on the door at twelve o’clock. Judge Hartman opened court at three o’clock, called the cases of Kurzman vs. Ryan, took Ryan’s default, signed the dispossess warrant, and adjourned the court, compelling all other litigants to wait for their justice until the next day. Instead of the usual one marshal, all those attached to the court, with their assistants, were hurried to No. 218 Chrystie Street, and within two hours had removed everything to the sidewalk.
By that time word had reached Ryan, and he and some of his henchmen returned. They were thoroughly aroused but quite helpless. As there was no court in session, and the marshals were in possession of the premises, Kurzman was rid of Ryan for good and all. This was the first exhibition I ever saw of how justice might be travestied.
The next day Ryan’s attorneys appeared before Hartman and attempted to have the proceedings reopened, and upon Hartman’s refusal to do so, attacked him bitterly. The Judge said that if the learned counsel would not at once stop his impudent remarks, the court would forget its dignity long enough to leave the bench and “punch him in the jaw.”
My next experience brought me in contact with even a worse element. Kurzman had foreclosed a second mortgage on some houses on West Thirty-ninth Street between Tenth and Eleventh avenues. They were part of the block that was called “Hell’s Kitchen.” Many of the tenants owned only a mattress and a few chairs, and no kitchen utensils of any kind, and frequently paid their rents in instalments of less than one dollar. Twice I saw women carried out of the buildings the worse for the “exciting arguments” they had indulged in with some of their visitors. It would not have paid us to dispossess these people, as the new ones would have been no better. We collected the rents for a few months longer until the first mortgages were foreclosed.
This condition was very general throughout the City of New York. The boom days of real estate had disappeared, and with them, the optimistic speculators. Real estate was unsalable, and those who had received mortgages in payment of some of their capital and all their profits were confronted with the choice of either abandoning their mortgages or foreclosing them and again assuming control of their property. The conferences between the delinquent owners and the mortgagees to adjust these matters reminded one as much of funerals as the joyous meetings in the wine cellars had of weddings. These middle-class investors whom I met in ’72 and ’73 were completely wiped out and never came back. Quite the contrary was the case with most of those intrepid builders and operators like John D. Crimmins and Terrence Farley, who forgot their losses and went at it again with fresh vigour and new courage as soon as the liquidation had ended. In 1879, when specie payment had been resumed, the superintendents of both the insurance and bank departments urged institutions under their supervision to market their real estate as soon as possible. Their efforts and those of other recent plaintiffs to dispose of their holdings started a new active period. Real estate again became fashionable, and the plucky operators and builders who had survived the drastic punishment they had received were soon reinforced by a new set of men, of whom I was one.
In 1880, I turned my attention to Harlem where nearly all the brownstone and brick houses that had been built in the seventies were in the hands of mortgagees, and where the owners of the old frame houses were thoroughly discouraged and could see little hope in the future. Nearly all of Harlem was for sale. I bought plots of three to five adjoining houses at a time, and quickly resold them at small profits. This activity stopped when President Garfield was shot. The suspense during his illness caused a complete cessation, so I, too, rested until October, 1885. I was then worth only $27,000, and as a large part of that was represented by my interest in the Celluloid Piano Key Company, I had but little working capital.
My brother-in-law, William J. Ehrich, agreed to operate with me in real estate, he to contribute $40,000 capital and I to do the work. All profits, after paying him interest, were to be divided equally.
At that time my mother lived on One Hundred and Twenty-sixth Street in a house I had purchased, a 17-foot brown-stone house with a pleasant yard which she personally transformed into a delightful little garden. In my frequent visits there I became impressed with the prospective importance of One Hundred and Twenty-fifth Street. It was the first broad street north of Forty-second that ran from river to river, and I foresaw its future value, particularly of the block between Seventh and Eighth avenues. It seemed to me like the neck of a funnel into which the entire neighbouring population was daily poured to reach the Elevated station at One Hundred and Twenty-fifth Street and Eighth Avenue.
Ehrich and I concluded to secure some property on this block. The first that we obtained was the lease of seven lots for which, at the beginning, we paid the annual rental of $4,000. We still own this leasehold, and the gross rental now is $44,500. We subsequently purchased the adjoining plot of five lots, improved the same, and were delighted when we were enabled to sell it to the Knickerbocker Real Estate Company among whose stockholders were Solomon Loeb, of Kuhn, Loeb & Company; Henry O. Havemeyer, John D. Crimmins, and John E. Parsons, at a price which netted us a profit of $100,000. This was in 1899. Subsequently, I repurchased this plot jointly with my partners, Lachman & Goldsmith, for $250,000, and within two years thereafter sold it to Mr. Louis M. Blumstein for $425,000. This was the most profitable, but not the only transaction we had on this street. With various associates I owned, at one time or another, one half of the property on the south side of that block, so that I made good use of my early judgment as to its future value.