National opinion. [volume] (Bradford, Vt.) 1865-1874, 1871-09-08
Rates Of Interest.

Mr.. +, b. Elliott of Washington read
before the American Association OF
Science, n carefully prepared paper on
the Rates Of Interest realized TO In
vestors in the Securities of the United
States" After stating the principles
upon which the calculations were based,
he proceeded TO give the results Of his
Investigations. In he early part Of the
present century the credit of the United
States Government was comparatively
low, its = per cent. and q per cent.
securities being placed upon the mar
ket upon terms such rs to fix the rates
realized to investors in general at from
1910 to 8 7-l0 per cent one OF the loans,
however, being placed upon the market
in the year 1912 at as low n realized rate
Mt . per cent. while the rate realized on
another loan was, in the year 1916, as
hirh as l-l0 per cent. The difficulties
attendant upon the war of 1912, had an
important influence in disturbing the
credit Of the Government and producing
these comparatively high rates of in
terest. In 1921, the credit of the Gov
ernment was so far improved that it was
able to place per cent loan on the
market on terms, such ms TO indicate the
realized rate of interest to be about A
a. 22) per cent. In the years 1854 and
1870, the 3 per cent. securities of the
Government sold in the open mar
ket in New York at such premiums
as to show the rate of interest realized
nearly identical with the above. %
and 4.2i per cent The market price of
the G per cent. securities of the Govern
ment in the same year indicated a still
lower rate of realized interest-329 and
3.27 per cent. respectively.
In 1859 the 5 per cent. securities of
the Government sold in open market at
prices indicating realized rate of in
terest of four and one-hnlf (4.59) per
cent, and its 6 per cent. securities at
prices realized about three and half
DAD per cent. interest to the investors.
In 1860, the prices of the 6 per cent
securities indicated rate of interest
realized of about 5.02 per cent. The
rates of interest indicate that the bor-
rowing power of the Government dur
ing the periods of tranquility-that is,
the normal borrowing power of the Gov
ernment varies from three and one
fourth $40 per cent. to four and one
half 4.59), or five (5.02) per cent
Passing from this period of compar-
ative political quiet to the year begin
ming the late civil var, we find the mar
ket prices of the 5 per cent. securities
to have been during the first four
months of 1861, such as to imply rate
of interest realized to investors some
what in excess of s (814 per cent.
Later in the same year 6 per cent. Sc
curities of the Government, known as
the 20-year securities of 1o61-81, were
sold indicating rates to investors varying
from 7.59 and 654 per cent. Passing
by the succeeding years of active hos
tilities, concerning which complete in
vestigation has not been made, in the
first three months of 1869 the prices of
fhe per cent. securities of the Govern
ment, known rs the Ten-Forties of 1864,
realized about 6s per cent An average
of $50 in January, 6.53 in February,
and GA in March of that year. AT
present the prices indicate from 4.93 to
6, 05 per cent. to the in vestor, the lower
rate being upon the Pacific Railroad
securities, and those of '67 and '6S the
sos.