The democrat. [volume] (Weston, W. Va.) 1868-1874, 1871-09-11
NO. 10.


MIR. L. b. Elliott of Washington read
before the American Association Of
Science, a 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 the 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
ict upon terms such as to fix the rites
realized to investors in general at from
1910 to S 40 per cent. one Of the loans,
however being placed upon the market
in the year 1872 ut us low realized rate
at 0 per cent, while the rate realized on
another loan was, in the year 1916, as
hiGh ms l-lO per cent. The difficulties
attendant upon the war Of 1872, had an
important influence in disturbing the
credit Of the Government and producing
these comparatively high rates of in-
tereSt. IN 1871, the credit OF the Gov
eminent was so far improved that it was
able to placea 5per cent. loan on the
market on terms, such as to indicate the
realized rate of interest to be about A.
tI.22l per cent. In the years 1854 md
1855, the 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-i.22
and 4. 2l 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-3.29 and
3.27 per cent. respectively.
In 1859 the per cent. securities of
the Government sold in open market at
prices indicating n realized rate Of in
tcrest of four and onc-half li.j9) per
cent, and its per cent. securities at
prices realized about three and one.half
34l) per cent. interest to the investors.
In 1860, the prices OF the 6 per cent.
securities indicated a mte Of interest
realized of about 500 per cent. The
rates of interest indicate that the bor-
rowing power Of the Government dur
ing the periods Of trlnquility-that is,
the normal borrowing power Of the Gov.
ernment varies from three and one.
fourth l3.27 per cent. TO four and one
half Ii.j9), or five (j.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 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 (S.ll) per cent.
Later in the same year G per cent. Sc
curities Of the Government, known rs
the 2O-ycar securities of l5Gl.sl, were
sold indicating rates to investors varying
from 7.50 and G.5i per cent. Passing
by the succeeding years Of active hos.
tilities, concerning which complete in.
yestigation has not been made, in the
first three months of 1863 the prices of
the per cent. securities of the Govern
mcnt, known ms the Tcn.Forties of 1864,
realized about Gl per cent.-an average
Of $50 in January, G.53 in February,
and G.H in March Of that year. At
present the prices indicate from 4.03 to
Cos per cent. to the investor, the lower
mtc being upon the Pacific Railroad
securities, and those Of 81 and GS the
NJ