The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1868-03-02
Terms $500 per anmans, In aayamce.

shut against us, could but raise the rates of
Much of the money lent to the nation by its
citizens was in currency, deprecated to one
hall the value of gold, upon which semi
annual interest was paid, equivalent to IL per
cent. OF the amount loaned. By the apprecia-
tion OF the currency the rate has fallen from
II to 5 or 9per cent, but simultaneously with
the fall in interest, becomes operative the ex-
emptiOn from state. Gad local td.c0tiOa,
which under vigorous payment OF war
debts everywhere by the States snl towns
must be equivalent TO bonus OF about per
cent. As there are between one and two bill
lions OF these bonds thus favored, still to be
had for small premium, II is easy TO see how
an investment, capable in itself of holding
nearly all of the surplus wealth of the peopie,
must control the interest upon all other iu-
vestments. Accordingly the banks, bankers
and private capitalists will not loan at less
than what are called gorernmeat rates. to the
best customers on amplest security and for
short terms. Second class borrowers must
pay more, and mortgages that used to be
sought at per cent, cannot be cashed but
upon some arrangement TO pay from 10 TO
IL per cent. interest.
The man who has money has standard in
government interest, even now amounting to
about II per cent, for what he shall exact OF
his customers. The builder, contractor, man.
ulacturer or business man, who borrows mon
ey, has this sum with just profit upon it, to
assess upon his customers and employees, and
the whole falls at last upon the laborer and
consumer.
The return to specie payments strikes off
at once or per cent. of this extra interest,
and thus lowers the standard OF interest, and
with it profits everywhere. Could tax be
imposed by the States and towns upon the
bonds, they would entirely lose their prestige
and sink into the poorer class OF investments.
1t is evident that this cannot be done consist
entity with the law Of the contract, but as
these bonds from and after next year until
1881 become payable, they may be paid or
exchanged for bonds, either taxable at a rate
OF five per cent. or exempt from taxation at a
still lower rate.
o6ut the return to specie payments is posi-
BILE now, and until specie payments shall have
been resumed so long as to have re-establish-
ed the credit of the government, more favor
able loans will not be possible. While srecie
payments are resisted the current rates of in
terest must be nearly up to che government
rates. AS soon as they are established inter-
est falls eyerywhere-the necessary condition
OF more favorable .oans-and when those new
loans are negotiated, the sale and transfer of
the bonds abroad, where interest is at its min
inaurn, Ia movement sure to take place) will
restore to private hands the vast sums ex-
traetet from private enterprise by the neces-
sitiss of thewar, again to stimulate manufac-
lures, to employ labor, and push with vigor
hitherto unknown the development of the
wonderful resources Of the country.
In poor countries, aud in those where COM
merce is disorganized or shackled, interest is
always high; but in rich countries like Eng
land, France and Germany, the rates of inter-
est steadily tend downward. 1t is the unnat.
ural condition, not OF our war or OF our debt
but of our distI rbed finances, that while our
people have been growing rapidly and exces-
sively rich, rates of interest have been rising.
The increase of investable capital was mani
tested by the vast sums paid for government
bonds, which were sold at one time at the
rate of S30OO0,OO0 day, in reckless invest
ments in oil and copper stocks, and in the re
yival OF railroad enterprises in the midst o
hign prices and heavy taxation. The exces.
sive supply of capital ought to lessen the
price OF it, and bring down the rates of inter
est permanently below the old standard OF the
ante-rebellion period, and this must be the re-
suit as soon as the government by returning
TO a coin standard ceases TO pay such a heavy
bonus to its creditors. GET.