The Sun.
London, England, 1869-04-26 00:00:00

TRADE AND FINANCE.

Of all the foreign Governments now in the money
market, or about to make their appearance there, for the
purpose of raising loans, there is not one which, from a
financial point of view, can be regarded with
confidence. And it is satisfactory to find that a con-
siderable degree of caution is now being exercised, by
English investors at least, with regard to advances to
these unstable Governments. It is scarcely too high a
computation that the loans already out and in prospect
are for no less a sum than 50 millions sterling. Of those
already issued, there is the issue of £11,110,0J0 Nicolai
(Grand Russian) Railway Bonds, which, although
taken up on the Continent, has been com-
pletely shelved in this market. Of the Spanish and
Turkish Loans very little has been obtained in this market,
while the Roumanian Railway Loan for £1,500,000 will
probably meet with a similar reception in conse-
quence of the bad faith of the Roumanian
Government with former contractors. Not long since
we saw an attempt of the Egyptian Government to
obtain money here fail ignominiously, while, still more
recently, a proposal from Turkey was scarcely listened to.
These ,we venture to think, are healthy signs. Investors
appear to have become convinced that there is a limit
beyond which lending should not go, and accordingly
the old borrowing States, which have come into the market
from time to time with great regularity, have been the
first to fall under suspicion. Looking at the credit of
these Governments themselves, we see nothing that should
induce capitalists to trust them. In the cases of Russia,
Italy, and Spain, the finances have been going backwards
for many years past, and so little mystery has been
made about the matter that the Budgets of
each have been estimated in deficit, without any
attempt apparently to bring the receipts and expenditure
into equilibrium. Spain, in particular, is in a very peril-
ous position at the present moment, and there is very
great doubt whether she will be able to pay the interest
about to fall due on the exterior debt, notwithstanding the
loan that has now been raised. It would almost
appear that the interest on all Spanish Bonds
will be funded for some time to come. The
estimated expenditure of the Government for 1867-68
was upwards of twenty-six millions sterling, while the
revenue was something over twenty-five millions. This
year, however, the expenses attendant on the revolution
will cause a much larger deficit, while the revenue
will have fallen off greatly in consequence of the abolition
of the octroi duties, and other internal direct taxes. It
seems almost impossible, under such circumstances, for
Signor Figuerola to be able to meet the current expenses
of the Government, and now that people's eyes have been
opened to the true state of affairs, a new loan would b
out of the question.
These loans, however, must have a satisfactory influence
upon the money market. They will absorb a con-
siderable amount of unemployed capital, and will
cause an upward movement in the discount

- -
quotations. Already an advance has taken place- at
Hamburg and Amsterdam, it being found necessary to
prevent an outflow of silver from the country. The
position of the money market here has for some weeks
past been very peculiar. Notwithstanding the great
difference between the value of money here and abroad,
the comparatively high rates have failed to attract
the usual amount of capital to this side. This has been
accounted for by the suspicion that foreigners have begun
to attach to English bills, owing to the failure, attended
by discreditable revelations, of some of our principal
houses, which were long regarded by them as the repre-
sentatives of commercial honour and opulence. It was
the custom, when opportunities presented themselves, for
foreign capitalists to send money over to this side for
investment in long-fated paper, but, owing to the circum-
stances pointed out above, these operations have been
very much restricted. It is a humiliating fact, but it is
difficult to find any other explanation for it. • ---
In trade generally, no feature of interest has presented
itself. The amount of business passing in woollen and
cotton goods is limited. There is no disposition on the
part of manufacturers to go into stock, and they appear
to be pretty well bare of supplies of the raw material.
Apparently they are convinced that if prices of both wool
and cotton do not recede, they will, at least, be able to
purchase at present rates.