The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1871-05-02
The Future Of The Money Market.

The Future OF the Money Market.
The Nation prints u letter from Mr..
David A. Wells on "ThO prospective rate
of interest throughout the United StNtcs
for the next quarter OF century" Mr..
Wells assumes that the rate of interest
depends on four conditions /, the pro-
duCtiveness Of labor; 9, the supply Of
capital; 8, the degree Of risk in loans;
4, the state. Of the currency; and con-
siders the probable course OF each Of
these conditions in detail,
For the next generation, ut least, the
fertile land 0fthe United, States cannot
be wholly occupied, and there can be no
sensible decline in the produCtiveness of
labor, or in the demand for capital
AS for the further supply Of capital, it Is
evident thcreca be no accumulation Of
itin this country beyond the immediate
und pressing wants Of our own people.
We have hitherto been large borrowers
in Europe; but the demands of govern.
mcnts there have increased enormously
Of late; and great corporations, too, are
absorbing more and more Of the savings
OF labor, SO that this source OF supply Is
in measure cut oil from lS There is
now a strong tendency in the rate d in.
tCrest to rise, on all loans for n length Of
time, in the European markets. Before
the recent war no nation in the world
could borrow OF Others than its own peO.
pie at less than five per cent; aud now
Prussia herself pays six per cent, Russia
six, France seven, aud many other nations
from eight to eleven per cent on the pres
ent market value Of their bonds. The
average rate now paid on the foreign and
colonial stocks held in England Is above
six per cent. Onthe whole there Is no
reason to believe that Europe will furnish
capital ut rates, during the next genera
ton, which will lower the present rate Of
interest here.
In this country the limited success of
the national Loan ut five per cent, even
with It's entire exemption from taxation,
shows that money now commands u
higher rate upon the best security; and
the undiminiShed passion for speculative
investment in new enterprises with mad.
eQuate capital, threatens still to keep the
money market active and unstable,
As to the risk Of loans in this country,
the reputation Of our people rs borrowers
is not the highest In the world; nor Will
Improve as rapidly as 1t ought, so long as
many Of the great corporations of The
country, and even several Of the States
are irregular in the paymGntQt interest or
directly refuse ID meet their contracts.
The state oCthe currency Is OF great inl'
pOrtancG in studying the money market,
The rate Of interest has Eluctuated more
violently in this country than in any other,
for many years; "the average rate OF in
terest in the cities Of Boston, Now York,
Philadelphia, Cincinnati, ST. Louis and
Chicago, as computed from the record OF
public transactions, from 1874 to 1865,
having been approximately 1916 per cent"
and our mixed currency duringthe same
period was the least stable in amount and
value among commercial nations Nc
other commodity has, in time Of peace
varied 50 widely and,so rapidly as The
use oil money; and Mr.. Wells quotes with
approval Mr.. Amasa Walkers remark
that the wide fluctuations in the rate o.
interest, which arc due TO The uss Qt
currency made up largely Of credit, may
DO expected 10 increase In violence and
frequency hereafter; as the mixed cur
rency system" Is extended through the
commercial world. -, a... "a
Mr.. Wells concludes that there ia al