Delaware gazette. [volume] (Delaware, Ohio) 1855-1886, 1868-11-06
The Cost of Uncertainty.

| The average rate of interest at which
a perfectly solvent borrower can OBJ
| tain money in Europe, for a term OF
| years, is about four per cent.
1t is true that the rate OF interest is
now quoted at a much lower rate, and
| often at a higher one, but these quota
tions represent the rate of discount for
sixty days and four months bills, and
do not represent the rate of interest at
| which capital can be borrowed for a
| long term of years.
/ In England the rate of interest at
which money can be borrowed on NOR
tage for industrial purposes is seldom
! less than five ptr cent; but, as we have
said, an undoubted government bond
| bearing interest at four per cent. per
| annum will bring par in England, if
not in Germany.
We may therefore say that whatever
we pay for loans above four per cent.
per anum is not interest, but a guarap-
| ty or insurance charged by the lenders
TO protect themselves against the risk
ofthe loss of the whole or of a part Of
their capital.
Neither the bankers of Frankfort nor
| those of London have any doubt of the
ability of the United States to pay their
debt, or to meet their annual interest /;
and yet the bonds of the United States
| sell at 73 in London this quotation be-
ing made in gold of a higher standard
than our coin, the true quotation in
dollars IS q uLCle uQQ0r SUs
That is to say, an English banker
will give gold enough to make less
than 80 American dollars for the prom
Use of the United States to pay him 100
American dollars at future date, and
in the meantime to pay him 6 dollars
year interest.
Six per cent. on 100 is equal to ~
per cent. on so. The EngIishman and
the German are therefore willing to
lend us money at the rate of ~ per
cent. which they would lend us at
per cent. if our credit was undoubted.
We therefore pay per cent. per an
mum interest and 81 per cent. per an
mum guaranty.
Why do they pay this guaranty?
How much does it cost
Who pays it
If il be true that no sane man doubts
the ability of the United States to m eet
their promise, then the doubt must be
as to our viii. In other words the
Englishman and the German sus pect
that we will cheat them.
How much does it cost?
Our interest bearing debt is over s.
600, 900 600; our interest in gold is over
Sl20, 100000 per annum. Yet il need not
be over $50, 900 900, except for the sus-
picion of our good faith cast upon us by
Lhe false leaders and their followers.
Forty million dollars a year, in solid
gold is the cost. Are such men as Pen
dletOn and Vallandigham cheap or
dear? Every man has his price it is
said. Truly these are high-priced men.
They ought to be models of all tho vir-
tues. They cost many times their
weight in gold every year.
Who pays it? The "bloated capt.
talists ?" They laugh In their sleeves.
They know that the people Of the Uni
ted States will learn, by experience,
that they must be honest whether they
will or not. They know that repudia-
tlon is practically impossible, and that
meantime the guaranty pays They
know that it is the timid and ignorant
only who are prevented from investing
in bonds which must be paid, or an
archy and utter confusion rule. They
laugh when Butler proposes TO reduce
the rate of interest below six per cent. /
and by his very proposal raises the rate
from seven to seven-and-a-half, or from
and = to eight.
It is the mass of the people, the con-
sumers of taxed products, who pay this |
$40, 100000 per annum cost of being |
cheated and made to appear to wish to |
cheat.
Most of the capitalists who hold |
bonds permanently in the United States
are the depositors in savings banks, |
tru stees who own bank stocks, fore
hande ed farmers, and the like, to whom /
the high rate would be great benefit |
if Justly earned.-N. 7. Post.