The Sun.
London, England, 1867-05-20 00:00:00

COMMERCIAL.

NEW YORK, May 4.
Capital continues to increase, and the Money Market
shows symptoms of a positive superfluity. Call loans are
readily effected on good security, at from 4 to 6 per cent.,
and business paper is as readily done at from 6to 7. The
bankers have more in till than they can employ. There
is little prospect of a change, and it will give tho Govern-
ment an opportunity of reducing a largo volume of
currency, and funding all their debts. While the
rumours came strong and fast through the cable
of a European war there wore symptoms of a
panic, but the peace news has dispelled these symptoms,
and things have settled down into a steady condition.
The foreign demand for 5-20's, and the amount of these
bonds absorbed iu Europe, is shown by the fact that nearly
two-thirds of the $25,000,000 now due, as gold bearing
interest on this security, is payable in Europe. The
Treasury commenced these payments last Wednes-
day, and on the following day $1,000,000 were paid
at the New York - Sub-Treasury. This helps the
downward course of gold, which bas steadily fallen,
closing on Thursday at 1351. Still the amount is too
little to have other than the most trifling effect. Last
Saturday's steamers took out $627,000, and on Wednes-
day the Scotia carried off $lOO,OOO, making a total for the
year of $8,770,513. The May statement of the public. debt
has not yet been published, but it will show a favourable
progress in reduction, which was said to be about
$6,000,000, with gold in the Treasury of $113,000,000.
During the last month the Secretary has not exerted
his power of retiring the $4,000,000 in legal
tenders. The total circulation of the State Na-
tional Banks of the country was reported last
Saturday at $297,835,249. The 7-30's continue largely to
be exchanged for 5-20's, amounting, in April, to about
$37,000,0000. Secretary McCulloch will, it is believed,
reduce the debt during this month to $2,500,000,000, at
which figure it will be allowed to stand so long as tho
present scale of Government expenditure lasts. That it
will last, oven if it does not increase, is fully anticipated in
view of the Indian war, which, conducted in the prairies of
the Far West, will: prove, I fear, a most expensive
business. Government Securities have participated
in the general improvement. Many of the National
Banks are purchasing 5-20's with the proceeds of their
interest now being paid. These securities were not inju-
riously affected by the heavy fall in Europe, and this is a
satisfactory proof of their inherent strength. It shows
that we are willing to take them back when the necessities
of European capitalists force them at a depreciation on the
markets. The demand here is steady and growing for
permanent investment, and it is not improbable that as the
surplus capital of the country increases that American
purchasers will compete for the securities of their coun-
try in your markets. The demand for all well-
established stocks and securities has been strong and
has led to a general advance. As yet this has been con-
fined to substantial concerns, and has not embraced specu-
lative and fancy matters. The rise in Pacific Mail-ship
stock is steady if slow. Business, though checked by the
war news from Europe, is becoming active. Cotton has
recovered, though manufactured cottons of all descriptions
have a downward tendency, the market not being strong.
Foreigne
the iuflen
xchangehausdce of the
ined' as might have been ex-
pected under peaceful news. It is now
186 i)
Status l°
Ten-fortiessl (l 86 599, United
)
quoted at 109 to 110. The following is a list of latest
prices - American gold 1351, United Stateslos Five-
twenties(lBt;s
newstaissue)tes
7(13180_6721i ; 107111onalti e
d(
1061. Missouri sixes 951,
Tennessee Sixes 621, Virginia sixes- 67, New York ,
Central Railroad 981, Erie 631 Erie Preferred 73, Hudson
ver 96, Reading 1031, Michigan Central 109, Michigan
Southern and Northern Indiana 681, Illinois Central 1131,
Cleveland and Pittsburg 72, Cleveland and Toledo 1131,
Chicago and North-Western 35, Chigago and North-
Western Preferred 614, Pittsburg, Fort Wayne, and Clii7
env 961, Chicago and Rock Island 885, Ohio and Missis-
sippi Certificates 23k, Adams Express Company 65, Ame-
rican
Unionn63UnitedS`tPelra States 66,
Wells, Fargo, and Company's
67, Western h Company 411, Pacific Mail
Steamship Company 1281, Atlantic Mail Steamship Com-
pany 911, Cumberland Coal Company Preferred 31, Can-
ton Company 44, Quicksilver Mining Company 291, Mari-
posa Mining Company 81, Mariposa Mining Company Pre-
ferred 201, Boston Water Power Company 31 to 32.

(From 3fes3rs. Bowles and Drevet's circular.)
The doubts still existing in the minds of many at the
dato of writing our last circular as to the peaceful solution
of the Luxembourg question, have been fully dissipated
by the official announcement in the Maniteur of Sunday
last, 12th inst.

The reaction in values has naturally been most marked,
the German markets leading in the advance as previously
in the decline.

On Friday, May 10, the day previous to the signing of
the Treaty of London, Americans have advanced on
.1
large orders from Germany to all , and the market has
since ruled very
firm. We quote :
May 13
" 14
" 15
" 16
The variations in gold quotations in New York seem
to exercise no influence.
The Rente closes at 69.30 ; the Italian at 51.65.
Exchange on London, 25.161.

(From E. F. Sallerthwaite and Co.'s Weekly Circular.)

the public funds,
The Sootierbrought, us New York- advices to the 30th
ultimo. The more pacific aspect of European politics, re-
ported by Atlantic Telegraph, had operated favourably on
Of about one pet cent. In the Railroad Share Market
and they were last quoted at an advance
there bad been more activity than for some time past, and
after daily fluctuations the Stocks of nearly all the
Western roads were largely taken at improved quotations,
of from $3 to $5. Erie Stock was again the medium for
some large speculation; and exhibited a rise on the week
of V. In State Stocks we note an improvement of three
per cent. in Virginia and Missouri, but in Tennessee there
was a decline of that amount. The Banks' return again
show a very large addition to the deposits, amounting to
over three million dollars. Gold had fallen three per
cent., the last quotation being 135 k.
It is now nearly three years since, in a number of our
circular, we warned our friends of the probable near ap-
proach of a financial crisis, and the inevitable collapse of
many of the newly-formed companies, the shares of which
were then eagerly bought by investors A what wp con-

sidered "almost fabulous premiums," and suggested that
several American securities, both railroad shares and Go-

vernment bonds, offered a far preferable, because safer and
more profitable, investment. Those of our friends who, at
that time took United States 5-20 Bonds (at or under 40
per cent.), which we strongly advocated their doing, have
certainly reason to congratulate themselves on the confi-
dence they displayed in the fixed determination, as well
as the ability of the American people to meet all their
liabilities, although they were still rapidly increasing, and
had already piled up the National Debt to an amount which
might almost seem alarming; but with the knowledge of
tho vast resources of the country, and the energy and per-
severance, coupled with the fertility cf invention of the
population, we did not share in the fears entertained by
many. Looking at the then quotations for shares Of seine
of our newly-formed companies, it really seems, now that
we can look calmly and dispassionately on the matter, as
if the public generally were willing to take anything
which offered, and at almost any price. For instance, we
find at that time the following official quotations:—

Credit Mobilier ,ZS paid 6 premium
Discount Corporation l2 do.
Egyptian Trading
General Credit 4 do.
Imperial Mercantile Credit 5 do.
Imperial Finance 5 do.
_....

Joilit Stock Discount 5 do.
London Financial 15 do. lO do.

With but one or two exceptions those undertakings
have proved utter failures, and not only the whole of the
money invested has been lost, but further large liabilities
are hanging over the heads of the unfortunate shareholders.
Ou the other hand, United States Bonds have gradually
grown in favour, both hero and on the Continent, owing
to which, and the decline in the premium on gold, conse-
quent on the conclusion of the war, they are now nearly
double the value which they were at that time, while,even
at this advanced price we think there are few securities
on the market, which, withequal safety, will yield as good
a per centage on the money invested.

With regard to American Railroads, we freely confess
that there is, in too many instances, groat mismanagement,
and we fear not a little jobbery, especially in the arrange-
ments with some of the "Express Companies," as exposed
during the recent examination into the matter by the Ohio
State Commission; still, notwithstanding this, many of the
leading lines will compare most favourably with our own
railways. The Commercial and Financial Chronicle of New
York, in a recent article on American Railroads, says,
"Out of the list of thirty-eight roads, with $350,000,000
capital stock on the call of the New York Stock Ex-
change, thirty-one have paid dividends, ranging from
seven to twelve per cent. per annum within the last
six manths ; whereas,• five years ago, not one in four of
the roads was making any division of profits among the
stockholders," and our own firm conviction is that, with
able, honest, and economical management, much larger
dividends might be earned. In the still further growth of
prosperity of American Railroads we have strong faith,
and if the proprietors of stock would but combine to sup-
press the baneful system of Express Companies, we believe
that in very many instances dividends might in the course
of two or three years be doubled. To illustrate the rapid
and continued increase of traffic we give below the gross
annual receipts of ten of the leading roads for the years
1863 and 1866.

1863. 1866.
Chicago and Alton
Chicago and Rock Island. 1,952,269
Erie

, . .
Illinois Central
Michiga❑ Central
New York Central. 11,069,853 - 14,575,128
Philadelphia and Reading 4,088,837
Pittsburgh, Fort Wayne, and
• Chicago
St. Louis, Alto; and Terre
thine
Toledo and Wabash

Total of ten roads ... $15,120,884 $72,329,950
And these results it must bo borne in mind have been
achieved, in most cases, with but little addition to capital
account, and scarcely any additional mileage. In many
cases whore the annual report shows an augmentation of
capital, the increased amount has been provided gradually
out of earnings, and at the end of two or three years a
stock bonus has been presented to shareholders, to repre-
sent the outlay on permanent way or rolling stock. With
these facts before us, we think wo are justified in arriving
at the conclusion that, almost any of the lines named, offer
a medium for investment which cannot but prove satis-
factory.
We are quite alive to the fact that several of these roads
have passed through crisis of severe depression and pecu-
niary embarrassments, and at least in one instance a re-
ceiver has bad to be appointed; but they have all emerged
from their difficulties, and most of them are now paying
respectable dividends.

Spirit of the American Press.

WAR IN EUROPE AND OURSELVES.

When it became apparent, a week or two ago,
that there was a chance of war in Europe the
premium on gold rose. Now the chance of war has
grown into strong probability, and again gold flut-
ters upward. A rice in gold i 3 simply a fall in the
current value of our Treasury's promises to pay.
It is hard to see why these should be worth any less
because of war on the other side of the Atlantic. We
do not expect to take part in the fight. The war there
will entail no loss nor expense upon our Treasury.
We have a thousand times more to fear from our
own Congress than from all the armed hosts of the
Eastern world. Thirty years ago the governor of
the Bank of England could not look grave without
putting all Wall-street into a temper of gloom. If
the Bank of England put up the rate of interest,
money-lenders here buttoned up their pockets in
affright. We have grown very rapidly since
then, but we have not yet grown out of the
boyish notion that Europe holds our purse-strings.
In the first year of our civil war we quietly
made up our minds that we could not afford
to buy much from abroad, and at once a stream
of thirty or forty millions of coin flowed in
upon us. This should have satisfied us that the old
days, when we were always at the mercy of foreign
countries because always heavily indebted to them,
were past. Such of our securities as capitalists
abroad hold have been bought by them because they
arc better investments than they can find at home ;
these never constitute a cash claim of any amount
against us. If ever there was a period when men in
Europe would have been likely to hurry American
securities back into our own markets for conversion
into money, it was at the first alarm from the
Southern rebellion ; our Government Stocks were
sent back at that time very freely, and so were
many other securities; but with all that were sent
the cash balance remained strongly on our side, as
was proved by the gold flowing this way. And this,
notwithstanding that we were at that time com-
pelled to resort to Europe for blankets and muskets,
and many other things which our own factories were
not ready to supply for the army. But for our un-
fortunate resort to paper-money we should probably
have held Europe in this same financial relation
to us during the whole war. Last year there
was a great panic in London, and the English
papers foolishly ascribed it to the heavy unpaid in-
debtedness of American merchants to their English
correspondents ; a statement of our relations which
was true thirty years ago, to wit, in 1837 ; but it
has hardly been true at any time since. The official
returns of the British Government of the trade be-
tween England and this country for several recent
years show, if such figures show anything, that the
boot is on the other leg. Excited by the Loudon
panic, our Secretary of the Treasury foolishly sold
nearly all the gold in his coffers at 130 when it was
worth 150, and thirty millions of coin, thus thrown
at a low price upon our market, when there was uo
use for it, found its • way rapidly to London and
quieted the panic. So far was this thirty millions
beyond what was needed to cancel all possible cash
claims upon this country, that before all of it had
arrived in England some of it was on its way back
again. Yet the English papers had insisted, and
some of our people had believed, that we owed in
England four or five times as much. The English-
men welcomed the gold to help them out of their
scrape, but some among them laughed in their
sleeves at the alacrity of our Treasury to help their
finances at the expense of our own. Many believe
that if there is war in Europe sold will be wanted
there, and, therefore, will be carried thither in
large quantities ; that Louis Napoleon, who knows
the value of a solid basis to his finances, will con-
trive to carry off most of our coin. Of course any
out: can buy coin in our market who has where-
withal to pay for it. But French kickshaws are
not of very abundant sale in this country just now,
if the gloomy accounts we hear from importers be
correct. On the other hand, so far as can be seen
at this time of year, the prospects of the grain crops
both in France and England are not promising, so
that if Napoleon turns out a large number of his
workmen into the unproductive fields of war, he
may be glad to convert any balance he can com-
mand in this country into corn instead of coin. One
thing is certain, that the gold which is in our
Treasury and which is the basis of our financial
system neither Louis Napoleon nor any one else
can get hold of except by the free consent of the

Secretary of the Treasury. The hundred millions
or so of coin now in the Treasury can be kept there,
happen what may, unless the Secretary should
again be so softened as to regard the distresses of
European finance more than the needs of his own.
No one has a rightful claim upon this fund except
the public creditors to whom gold interest is due, and
for their claims the current revenue will suffice. As
to coin which may be in the hands of the people, if
the secretary wishes to keep that from going abroad
he must stop making gold artificially abundant and
cheap through sales from his stocks. The more
abundant he makes gold in the open market the
cheaper it will be relatively to other goods, and the
cheaper it is relatively to other goods the surer is it
to be exported instead of other goods ; the cheaper
it is relatively to other goods the more likely, too,
are foreign goods to be sent hither to be exchanged for
it. When this war panic first occurred in Europe, our
( overnm en t bonds fell heavily in Frankfort; the mar-
kets of Paris and Landon, in some degree, responded
to the fall ; our own market showed no more signs of
yielding to the decline in prices than if there had been
no such place as Europe in existence. Our market, and
not the European market, regulates the price of our
Government bonds ; they will buy them, of course, in
Europe as cheap as we are willing to sell them, but if
we could manage to put up their price here ten or
twenty per cent., the Europeans would continue to
buy them, and all the more eagerly.that we mani-
fested strong confidence in them ourselves. Herein,
too, is proof of the folly of our going to Europe to
negotiate a speulal loan on terms intended to coax
people there into buying ; here at home is the place
to inspire confidence, here where the people can
watch every step made towards putting the Treasury
into a sounder condition. When our own moneyed
men have confidence enough to buy our six per
cent. bonds at par, the people of Europe will take
them more eagerly at par than they now do at
eighty. We have much more coin in our Treasury
to-day than the Bank of England is in the habit of
holding ; and of this much gold we cannot lose pos-
session except by the Secretary voluntarily scatter-
ing it abroad. Unfortunately our Treasury owes
more in demand claims against it than the Bank of
England does, and, therefore, has need of a still fur-
ther sum in coin to make it as strong as the Bank.
In a few months our Treasury could lay by
gold enough out of its revenue to put all
its promises in high credit. We regret that
it is not likely to pursue this straightforward
course. But the country, in spite of all its
losses of capital by the war, and all its embarrass-
ments from a fluctuating currency, is strong and
growing. If troubles come to us, they will come
from our own want of wisdom in managing
our home finances, not by reflection from
troubles iu Europe. Troubles in Europe must have
the natural effect of making our securities preferred
by the timid and the prudent there. It was observed
that little effect of the kind was perceptible as a
consequence of thelast Franco-Austrian war; but the
duration of that war was too brief to furnish any
conclusive test, and a war between France and
Prussia to-day will be very different from a war
between France and Austria ten years ago. Such
a conflict will tend to draw our bonds rather than
our gold abroad, especially if we set to work ear-
nestly to make our bonds as good as gold. But
were France and Prussia both wiped out of exis-
tence, this country would not feel it to its disad-
vantage as much as it would three months' dry-
weather in the state of New York when the hay
crop is growing.--7 he Round Table.

The New York Times shows in the following ex-
tract the present feeling generally entertained in the
United States on the Confederation of Canada. It
is manifestly absurd to imagine that any Confedera-
tion of the British provinces could be dangerous to
the United States. Most Americans hold to the
idea that these provinces will drift eventually into
States of the Union. They have only to be left
alone, and the attractive power of the larger body
will work out the desired end. Before Canada,
however, becomes a part of the United States the
National Debt rnust be materially decreased. "There
is no special jealousy of the projected Confederation
on our northern border. So far as it may strengthen
the power of the British provinces for purposes of
aggression, it bcwuwa it pi over zubjeut fot the
watchful consideration of our own Government.
To say the least, we think it quite as legitimate a
subject of apprehension, in itself considered, as the
projected Franco-Austrian monarchy in Mexico
ever was. Ten or twelve years ago Mr. Seward,
in a series of letters from Canada, predicted pre-
cisely what is now occurring in the British posses-
sions on our northern border. In direct opposition
to what was then the current of opinion, he said
that the Canadas would not be annexed to the
United States, but would eventually bring about a
confederation of all the British provinces, which
would grow into a populous, rich, and powerful inde-
pendent nation ; and that it would have no motive of
hostility to the United States, but would become
one of their most reliable and useful allies. We
think that current events tend to confirm this pre-
diction. There is no doubt that this new confede-
ration will become independent of Great Britain
whenever it chooses to do so ; and so long as we
continue to bear the burden of our national debt,
we cannot foresee the time when annexation to the
United States will be more desirable for the new
power thus created than independence."