, 1870-01-08
FREE TRADE IN MONEY,

the Eastern States, has adopted species Of
legislation, in theinterests of the borrowing
class of its own citizens, which it probably
supposes to be protective Of that particular
branch Of home industry. This is the re-
qui1ement that all fiscal companies incorpo-
rated under the laws Of New York, having
surplus funds for investment, shall invest
them upon real estate within that State, or
in national or New York State securities.
Among the statistics compiled md pub
iiEhed by the insurance companies, there
are no data from wLich to nrrive at the pro.
portion Of their premiums which is drawn
from other States but it is undoubtedly
very large. The effect Of these laws isto re-
quire the premiums collected By the agents
Of New York Fire, Marine, and Ldo 1Dsur-
ance Companies doing business in Illinois 10
lie invested in loans upon New York real es-
tate Ut 6 per cent, when it might with equal
safety be invested in loans on first class
Illinois real estate at 10 per cent. The re-
str,ction is iniunons to the New York
Insurance Company, because, by the vast
accumulation Of loanable capital in New
York, it hns become impossible to procure
FIRST closs loans for all the surplus funds
seekiEg G investment. 1t completes at q dis
advantage with the Connecticut and Illinois
companies in Illinois business, because.
while they can 10 IN their capital at 10 per
cent, the N7w York company must loan Mt
G. This clog upon the investment of the
reserve funds Of insurance companies has
telded, among other causes, to incite them
to that magnificent style Of architecture
which is nov lining Broadway with Insult
ancs buildings. They argue chat, having
these vbst reserves, and frst-class loans at
rates corresponding to the real value Of the
money DO. being pfocurable, they secure
their insured as faithfully by putting their
money into magnificent temple Of archl-
tectural art for the transaction and enhance
meut OF their business, III they could By
| lending these funds on second mortgages at
t low rites of Interest; and in this, doubtless,
they are right. But If we could conceive
the rental Of buildings on Lower Broad
way to declins within twenty years in any
thing like the degree in which rents on
Pearl, Water, Pine, Cedar, and other down.
town Streets have declined within fteen
years, viz, to one-tenth their former figure,
We readily see that as security for long risks,
such as those which make up lie insat-
unce, the erection OF these imposing struc'
lures becomes simply speculative use oi
trust funds.
The Life Insurance Companies Of Ees
York, unanimously, together with some oi
The Fire and Marine Companies, unite5
during the last sessiou Of the New York
Legislature in q petition praying that bod,
TO repeal the obnoxious clause restraining
them from the Investment Of their fund
in lonnB upon frst-class real estate in othe
st4tes- It WIS urged that they should a
least be permitted to invest in the Weston
States an amount equal TO the premium
drawn from those States, or to the existiul
insu,able rnlue of their policies. But th
New York Legislature, in the interest of it
borrowing clAsses, to increase the plethor'
, OF its speculative capital and keep down tn
rates Of Interest there, refused to repeal til
=, law.
,, In view Of this legislation, go hostile b
Western interests, by New York, and 81
hostile to her own interests il they wer
rightly understood, it would seem prope
that our Constitutional Convention shoul
empower the Legislature to pass such law
as would secure either freedom and rec
p1ocity between the two States or else secu
rity for our OWL policy-holderS This coul
be done BY simple provision that
"The Legtslatute shall hsve power 10 req1tr
| q II frR tnNnfnnFbfN6
5'atcs Sud+ dOpg ouHipe6B ID thle state, WHO'S
= cha17crs forbid lnem from Investing their s1rp q
.c's ~ sseu!es q Il
Uni1ed staes, OF Ut the state o!tltinol', 6uc!es
z % etcnre ali persons insured py them 10 q
! thsn tue epm Wbch will re!nsure the insured
l. lther conpaytef-'
!, Such provision would be concnrred ]:
I by our own insurance companies and b
those Of New York, since it MINIS to o.
a compli6h Just what the latter have bee
;. trying to do aud failed, It would wake u
/ the New York Legislature TO the folly {
"a their nar7ow and selfish policy and vel
! soon wipe from their statute books the Ia
" restraining their fiscal companies frol
!. making profitable (and, by consequenc
= compelling them to make an improbable
n investment Of their surplus and reserve
~ It would enable tho New York compaui
n to obtain Per cent more interest
ia equally well.secured loans. It would gi'
re an increased security to insured pcrsol
N resident IN Illinois. It would probably +
nj tain several millions Of loanable capital q,
e. 1ually in Illinois, of which the State is no
n. drained by New York insurance companie
- | who at present reeurd our State Us Ro+
lr- COW that gives full mess OF milk and
to quires no feeding. Let us, at least, ha
a free t1nde in money between the Statt
OUR COMMAND OF TIE PACIFIC.