There are, for example, the great office buildings. many of which have been erected by insurance com panies. The net returns they bring are very low, but they serve the companies as advertisements.
The buildings that are used as banks are often over-improvements, and sometimes represent an al most criminal waste. The idea is that the size and beauty • of the structure will impress the public with the solidity of the institution, and that therefore enough patronage will be secured to pay for the primary loss involved in the initial expense of con struction. From an economic standpoint, public buildings are also frequently over-improvements. Altho the best of them give expression to the dignity of the city, state and nation, some of them unfortu nately simply mark the raid that some congressmen have made upon the Federal Treasury in order to curry favor with constituents. Finally, many of the better class of residences are over-improvements; in building them the owners have not looked upon such residences chiefly as production goods (capital to pro vide an income) , but as consumption goods. They
are made luxurious because the owners can afford luxury. To copy any of these classes of structures when the purpose of building is pure investment, would be to invite disaster.
Improvement and change of problem of changing the type of buildings as the tion of a district changes may be dealt with in two ways. Either the final improvement may be post poned while the carrying charge of the land is being financed thru the agency of a taxpayer, or a building may be constructed which is convertible, or to which additions can be made.
14. The taxpayer.—A taxpayer designates a tem porary structure that will pay operating expenses and amortization charges and yield a profit to apply on the carrying charges of the ground. The mathematics of a taxpayer is very simple. The chief difficulty lies in making the assumptions necessary to set the prob lem in mathematical form. Let us illustrate by an assumed case: