The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-02-05
AMERICAN FINANCE.
United States and Rassian Securities Con.
frastcd M Investments Abroad,
from the London Times Jan. I6l ---

From the London Times Jan. I6l
The publication OF Mr. McCulloch's report on the fed
eral finances, coming, did, after the OF
Russian loan have excited question IN many
minds why tho securities Of the United States and OF the
Russian empire should be held In such different es,ima
ton by investors The price OF Russian I've per
in the English market is above S. At which rate Of pur
chase tho investor obtains something less than six pcr
nvetwentics or six per cent bonds IS u which makes
the rate Of interest on Investment just eight and
third per cent The difference 70 the rate Of in.
nearly two and half per cent besides which the
nve-twenty bonds are payable in less than twenty
viii receive by way OF bonus addition Of more iban q
third 10 his capital. This discrepancy In nrst sgbs
not easily nselgible The social order u Russia Of
the States has undergone violent change within very
few years; the abolition Of seridom Is TACT no less Inn
portant than the abolition Of slavery, and body Of dis
planters in the southern States II the stability Of tho
Institutions Of America be not thoroughly assured,
one can pretend 20 say that the social and political con-
dition Of Russia is whit moro firmly nxed But II
Try 70 a detailed examination q their chances,
Ssr R'rpsa u %sai ' sas. Ss.
ducing the American debt, and he can point
TO circumstances which promise that the reduction shall
month since, was raised 70 . deficiency In the
ordinary income Of lhe empire. There . dif6cuty
y providing for the iuts,ss; on prsea'ns debts and
obtained py the creation Of fresh obligations
How comes " then, that the securities Of the United
SthtcS arc comPAriSOn. uisCrouis-uf No ~
neve explanation Of the difficulty 10 10 be found IN
the fact that tho market flooded with Americas
curilies within incredibly short space OF time.
Five-swentics TO tho extent Of hundreds Of
millions were issued within few months.
This however, ought not 70 explain tho difn
Guilty II the mobility OF capital as great ~
political economists represent 70 be In theory. Two
FORMS OF investment OF equal security but offering
equal rates OF interest," being In the market the investor
ought ee out OF and buy In the other until their
prices appromaed that the rate OF interest should
be about the Practically this docs not happen
The we'll known phrase permanent investors points
the characteristic OF tho ordinary holder 70 abide by
tho security he has chosen. An examination
Of the OF the comparative depreciation OF the
United states securities IN not idle merely
speculation The federal debt consists large
VI bonds bearing interest nj and three per
cent shcrcdemptionof which is obligatory within very
their payment that Mr. McCulloch suggests the Issue
" bonds specially adapted 70 The European Market by
provision that the interest ON them shall be paid in
London. Such provision would doubtless Be useful
but expsdisu enectual towards obtaining money
on easy terms this side Of the Atlantic couid he
found In the removal Of the which infect Amcr
credit with suspicion. The least should be done
redsemable Only god and public Reputation OF the
suggestion made by Mr. Hayes would not DO unadvisa
hl0 Il 10 probably vain to suppose that the separate
States will repent o. their conduct and make up to their
creditors shc Of which thcy have been defrauded
~ the substituon Of paper FOR specie We are how
ever persuaded that such restitution would be an act
OF the strieset economy well Of justice and The
effect upob credit Of shc fedention would be proper
ionaly great the condolences Of investors In s inee-
rity would b. restored, the rate Of interest demanded
FOR loans would decline, and the weight Of federal TAXA
stn,, vros,1d bo lichteucd