The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-08-10


e3,6l1,625 In deposits, $4.2s1, $50 in specie and
e444, l20 in loans while the circulation shows de-
crease OF $117089. The totals Of the last two state
ments are as understated:-
Loans s2.s,sii'esz sa7s ss Is, 7s s.
specie .............. 20,5O2,73 "a, 1884, 27
Circulation. 33,057,305 34,074,374
SJepOSit5 22S, lO4,S6I 23l, 7l6, 492
Legal tenders. 7363S,O61 74,05l,54s
The great event Of the week in the railway share
market was the break in Erie to SO, after selling at
20 a few days previously. The rest of the specua-
tive stocks sympathized less than might have been
supposed with this unexpected fall but the work Of
supporting the market has devolved more than ever
upon the cliques In quence Of the distrust Of
present prices thus occasioned At the close of bus
ness on saturday the market dropping at the
following quotations:-New York Central, 129Z
$50; Erie, 5s1s 5sss; Reading s1a& o1zs Michigan
Southern, S52 SO; Cleveland and Pittsburg. ss1s
sS7s; Rock Island Ills q 1117S Northwestern, s1h
q 81; do preferred, S1H s14; Fort Wayne, 100
tOsH Ohio and Mississippi, 2914 299S; Pacific Mail,
aO4H l041a; Western Union Telegraph, 341l 34Z.
The market for government securities was dull
during the week, but on the whole steady, and for
The expOrtable bonds firm. The purchases by the
general public considerably larger than the Sales
but there has been of late lack Of speculative spirit
among the Dealers which, however, is likely soon
TO give place to better state Of feeling Now that
all the seventhirtv notes have maured and all but
eight millions Of them have been either paid of or
converted into fve-twenty bonds the gold bearing
or funded debt has reached Its maximum, and the
market will consequently be no longer supplied by
new bonds from the Treasury. The effect Of this
may be easily fOreseen when we consider that there
Us large annual Increase In the home investment
demand growing out Of the renvestment OF interest
and that our securities are being constantly shipped
20 Europe. The foreign demand for these has dim
tho QUpy,l In h,,p -
millions during the last three years, and II
1t continues much longer at the present rate
prices cannot fail to advance beyond the highest
point they have yet touched for the bonds could
only be procured by sales by investment holders
Qhe home demand Is increasing not only In conse-
quence Of the purchases for reinvestment, but be-
cause the steadily augmenting inert capital Of the
country. which Is not and cannot be employed in
business must go chiefly into government securities.
We include the accruing income Of estates, trust
Funds and the accumuations Of private capitalists
not engaged In trade The time will probably soon
come when this inert capital will bring q lower
rate OF interest," or In other words will have to be
Invested In bonds at much higher price than they
now command. In European countries most OF the
Capital invested In the public funds does not bear
more than three per cent interest In view OF these
eauses and the probable rise in the average price Of
bonds from year 70 year. the hve-twenty bonds Of
have been at par two years ago. The
Nurpus revenue receipts Of the government
tnse the close of the war have hitherto been en-
ployed and absorbed In retiring temporary and ma
Curing obligations Of the government, and mean
while the Treasury has been supplying the market
with bonds. But the funding operations having
Eeased the surplus must in future be applied
10 the reduction Of the public debt by the purchase
Ind extinction By the government Of its own secu-
cftavvu hath
nvetwenty bonds are payable In gold greenbacks,
many have assumed that If the greenbaek theory
yas actually carried into practice all the bonds Of
4hs class would be at once paid on In greenbacks.
II moments reflection will, however show them
Shat none of the bonds can be redeemed until the
expiration of i've years from the date Of their ISSUE
daring which time and until the bonds are redeemed
Che interest will continue to be six per cent In coin
hhe only issue upon which the option Of redemption
has accrued to the Is that OF the bonds OF
tss2. The discussion Of this question has also turned
almost entirely upon the wording OF the act
hinder which the bonds Of 1852 issued; whereas
Che bonds Of 1885, 1867 and 1868 were issued under
m entirely different act. With reference to the
bonds Of 1862 the advocates Of the greenback theory
deny that the repeated declarations Of the successive
Secretaries of the Treasury that the bonds pay
able In coin, have any binding force upon the gov
eminent or form any part Of the contract between
khe government and Its creditors; at the same time
maintaining that II such declarations should be
shown to be binding the bonds would be clearly
md undenlably payable In c0in In this connection
the language OF the act OF March g. 1866, under
(which the nve.twenties Of 1885, 1867 and 1868 were
ISSUED, Is as follows:-"And the principal aud in.
aerest, or both, may be made payable in coin or
other lawful money; provided that the rate OF
Interest on any such bonds or treasury
notes. when payable in CON- shall not exceed
Blk per cent per annum, and when not
payable In coin shall not exceed seven and
fhreetenths per cent per annum." This act, there
kore distinctly confers upon the Secretary OF the
Treasury the power to determine and declare and by
Dis determination and declaration to bind the gov
ment as to the kind Of money In which the bonds
ISSUED by him should be payable. Under this act the
eecretary issued Treasury notes bearing interest at
khe rate Of seven and threeenths In currency, con.
tertibe into six per gold bonds and also issued
Che nve-twenties before enumerated. The Hve-twen-
tes OF 1868 would be cheap investment at the cur
tent price, even II they 70 be paid of in cur.
Cency at the expiration OF the I'VE years which they
must run In any event. Although but few believe that
There is any probability OF such payment, we will
glance at the bonds as investments even upon that
basis. With gold averaging 40 the difference be-
tween six per cent In coin and currency is So 401O0
per cent per annum which would amount in 1--WE
years TO twelve per cent so that II an investor
should pay liz for the bonds now and be compelled
20 accept par in currency for them at the end Of I'VE
kears his investment would have paid him six per
cent in currency and reimbursed his premium But
khe probability that the bonds will be allowed to
PUN much longer tlme-possibly for the whole
ywenty years. The United states bonds issued to
khe Pacific railways are avowedy payable, principal
and interest In currency and yet they are selling
h08 and interest The steadness which governments
have shown during the present protracted DUNES
Indicative that they will advance upon the resump
bion Of activity At the close the market for them
Was firm.
The foreign exchange market was throughout I'M
Settled, owing to q superintendent supply OF bilis
drawn aoainst 6va. wentes nv tina German bankers