Star.
London, England, 1829-11-26 00:00:00

thereby created. only provisionally, in connection with the milliard
granted to the emigrants, upon the whole a Three Per Cent; debt.
to obtain for the advantage of public credit a fixed rule towards a
comprehensive reduction of interest. Indeed, when a redeemable
stock approaches par, its price can no longer be regarded as the
mere result of the interest connected with it. This the present
Current rate of the funds every where proves. For example, the
price of one franc rents In the French Three Per Cents. Is 27
1-sth, and in the Five Per Cents. 21 3-sths • the puke of one riz-
dollar annual interest In the Prussian Debt Certificates is nearly
25, while that of the same amount of interest in the Anglo Prus-
sian Obligations is about SO. The Influence of this kind of differ-
ence has, within tha last few months, begun to operate on the
Austrian paper. There lately appeared suddenly in circulation
Four Per Cent. Obligations of old and almost forgotten leans, and
these securities soon rose to a price, which, with reference to the
interest they bore, far surpassed the Five Per Cent. Metalllques.
The new loan of 20,000,000, or 25,000,000 of guilders may also be
mentioned in connexion with this topic. That financial measure
must not be appreciated solely by the stipulated price ; for that
price, which Is kept up against the etneent rate of Five Per Cents.
notwithstanding the disadvantages of the rise of-the capital has
been diminished by the contemporaneously arranged limitation of
the sinking fund, does not at first.appeer,tdvantageous to the State,
but seems rather calculated to obtain the before-mentioned certain
rule for public credit, with a view io the future introduction of a
new grand financial operation.
The cue is different with the Russian 5 and 6 per Cents. In-
scriptions, the primes of which keep pretty nearly in the relation of
their respective interests. In fact, these funds, in consequence of
the express condition by which the holders never can be repaid
the capital, are to be regarded as perpetual annuities, and even
bear that name, so that the designation of the capital is merely a
matter of form. Thus they are protected against every reduction
of interest; and any such reduction which may take place with
respect to other public securities, can only have the effect of raising
the value of the Russian securities. Their present price, however,
indicates scarcely the commencement of this effect. In a Berlin
Exchange list, the Hamburgh certificates for Russian 5 per Cent.
Inscriptions in the year 1825 were long quoted at 3 per cent.
below the Prussian National Debt Certificates; they afterwards
rose to an equality, and fluctuated within that boundary until the
war with Turkey produced a fall. The greatest declension, which
amounted to about 4 per cent. took place In Jw.e and July last,
when they were left much behind on the rapid rise of the Prussian
Debt Certificates. On the conehtsion• of peace, however, a com-
plete change took place, and they. are now fl per cent. higher than
those certificates, if we take into account the settled value of this
paper In Berlin, which is it the rate of 100.91 Hz dollars for
the silver ruble, and compare that with the real worth of the
100.91 rix dollar.

Compared with the Austrian 5 per cent. ftletaUlques, the Rus-
sian Inscriptions Were, in 1825 and 1826, at least 10 per cent.
lower, and about 7 per cent. in the greater part of the year 1827.
In the period between January, 1828, and April of the present
year, the difference rose from n to 10- per cent. and fell
back again in October to 5 per cent. That . the proper
value of these Inscriptions, as perpetual annuities, is net yet Telt,
is rendered more apparent by the circumstance that the late 5 per
cent. Russian loan, contracted with Hope and Co. of Amsterdam,
which is redeemable at • par, and the interest of which is only
payable In annual rates, h. not lower. This loan was made at a
time when Villeies project for the reduction of the French Rentes
was in full activity; but as only half per cent. was assigned to the
sinking-fund, the same disadvantage to the public finances did not
take place from the rise of the nominal value, as occurred with
respect to the French Reines. Now, though the existing French
3 per Cent lientes have been raised, partly in consequence of the
operation of the powerful sinking-fund being entirely confined to
them, yet the Anglo-Danish Obligations follow them with a db."
tent but steady progression. However, these Obligations, accord-
ing to their present price, secure to the bolder scarcely 4 1-sth
per cent. interest, while the Russian Inscriptions, which have with
respect to their capital a less limited and twice more operative
sinking fund, yield an interest of almost fully five per cent.
The Berlin Stock Exchange is at this moment the centre whence
an impulse is given to several funds of foreign states, the prices of
which have constantly here a tendency to resolve into an equili-
brium with the price of the Prussian National Debt Certificates,
which bad for a time reached a fixed point at par, and which are
at present only one 1-Bth per cent. under it. In a tabular view of'
the course of the most important funds, subjoined to this easy,
interest at four per cent. Istaken as a proportionable rule, accord-
ing to which the gradation of the course is to be determined. In
this table the Five per Cent. redeemable effects form a particular
class, because their •higher price above par may be held to indi-
cate precisely a lower degree of public credit, since that price is
the consequence of a more remote prospect of the redemption, as
appears on a comparison of the Austrian Five per Cent. Metal-
liques with the Anglo-Prussian Obligations. It is further to be
considered, that the Prussian National Debt Certificates being
! lower than the French and English Three per Cents. is a circum-
stance which must be ascribed to the great value of the denomina-
tive capital of the latter.
A distinct class is besides formed of public neuritis., repayable
at fixed terms, with a premium, to which the incitement of
higher gain gives a peculiar value. As, however, that gain only
accrues to individuals at the expence of the whole community of
the persons interested, and as such funds are therefore far trom
being the most proper for a solid investment of capital, their
course rises above par in proportion as the capital required for
each share is less, and the more the shares are distributed among
the public. Thus, for example, the Polish Partial Obligations,
the most recent paper of this class, have not yet, on account of
their novelty, taken their proper station in the course with respect
to other loans of the same description. Interest at the rate of five
per cent. had been fixed upon as the basis for a great proportion of
these effects at the period of their first emission. The substitution
however of four per cent. annual interest, which according to the
present calculation of the par, appears proper, produces a difference,
which becomes the greater in proportion as the Sinking Fund be-
longing to the plan operates tardily.
Huw far the funds of great states may depart front a position
corresponding to a fundamental interest of four per cent. is exem-
plified in a striking degree by the course of the Three.per Cent.
English Consuls, which only yield an interest of three and one-
third per cent. without any considerable sinking fund operating on
them and giving a consideration to the nominal capital. If the
cause-of this be, that in England the profit on merchandise and
the general rule of interest is lower than in the other countries of
Europe; it must be allowed thrt the existing public securities may
also inversely produce by the advance of their course, a rise in the
price of goods as well as a depression in the general rate of inter-
est, and thus become a powerful engine in giving a new and ex-
tensive activity to trade. In tact, the relation between labour and
tranquil enjoyment is essentially expressed by the tate of interest.
The less that rate is, the more an individual has to acquire to en-
able him to retire from business, and the greater is the amount of
the forces which come into competition. Those, therefore, who
consider the rise of public securities as Injurious to the state, be-
cause the Sinking• Fund is thereby obliged to purchase at a higher
rate, overlook not only the influence just mentioned, but
also the direct advantage which the finances derive from
a reduction of interest. To the traffic in public securities,—much
as it has been declaimed against on account of partial abuses and
orttradictory phenomena,—belongs *e merit of having given to
public credit a real value, whereby it has been brought into the
same lists. and enabled to compete advantageously with private
credit. The distinction is no longer made that the capitals which
are first procured from the lender. cannot be recalled. This con-
dition is rather an imperfection, which attaches to private credit;
the state, on the contrary, having a much more elevated and uni-
versal existence, never fails to obtain a competition of capitals,
whereby an infinitely more prompt and convenient realization
takes place. Even the temporary fluctuations are in this way no
obstacle of importance, as moneycan always be borrowed on public
securities, and especially on domestic paper.
The price of public securities is besides in reality nothing else
than the manifestation of the constant change of vatue to which all
kinds of property and objects of Commerce are liable. The holder
of public securities is therefore in this respect not the lender of an
unalterable capital, but `participates to a certain degree in the rela-
tions of the owners of other property, in a sph.re, boirever, in
which the course of political events, which affects all relations, di-
rectly Manifeltu Its Influence. Upon the whole., the vast extent to
which public securities have in the present dines been carried:may
be regarded' as a great historical indication. It is the decided and
unceasing tendency of the vge towards a universality of. system,
which here shows itself. The impulie towards the rabing of
public credit thrspgh generalization rat value and its own move-
ment, produced long since in Prussia the excellent system of pawn-