Skyscraper Knocked Down

In 1928 R. C. A. common soared from $93 to $377 a share; International Nickel gained $177; Wright Aeronautical $190. Elevator boys and bootblacks joined professional traders to play the tape. The New Era had arrived. And Starrett Corp. (holding company for real estate, building companies) began planning another Wall Street skyscraper.

Original layout of the Manhattan Company Building called for 30 floors, was later raised to 56, then 67, finally 70. For speed's sake, preliminary foundations were sunk even before the old buildings were torn down. The job was finished in a record 363 days, cost altogether $24,000,000, was the second tallest building in the world when it opened on May 1, 1930. (Chrysler Building had opened one month before.) Meanwhile the market had crashed.

For years the glamor of 1929 survived in the Manhattan Company Building, known to all downtowners as 40 Wall. Although initial occupancy dropped from an expected 70% to 55%, it reached 89% in the "alcohol market" of 1933. Big tenants stuck to their posts. Chief of them was the Bank of Manhattan with the first six floors at an annual rental of $1,000,000. Among the 100-odd other tenants were the Bank of China and the Savings & Loan Bank of N. Y.; the No. 2 domestic copper company, Phelps Dodge (three floors); submarine-building Electric Boat Co.

But 40 Wall was married to the Street, and the Street of 1929 was doomed. J. A. Sisto & Co., a New Era byword, which had leased the eleventh floor, went bankrupt, never moved in; G. L. Ohrstrom & Co. paid a fancy price for a separate street entrance, later moved upstairs, was eventually succeeded by Munds, Winslow & Potter, which liquidated in 1938. The New York Stock Exchange once paid $250,000 for an option on clearinghouse space in 40 Wall, today has too much space in its own building.

With rental revenues originally estimated at $4,700,000, 40 Wall never once reached its break-even point of $3,900,000. By 1938 total income had flopped to $2,750,000. Last year it could not meet real-estate taxes, interest on first-mortgage bonds, ground rent. Starrett Corp. submitted a reorganization plan cutting fixed charges but preserving most of Starrett's general mortgage and stock interests. The first-mortgage bondholders opposed the plan, wanted the building (now the world's fifth tallest) for themselves. Last week, with stockmarket volume close to a 20-year bottom and 1929 scarcely a memory, the first-mortgagors cinched the deal. At a quiet auction in a dingy downtown Manhattan office they made the only bid, bought 40 Wall for $11,489,500.

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