The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-03-10
How 1t Was Received and the
Security Behind 1t.
Sale of a Large Put" in
Union Pacific.
. TO X = Q VI e II
Money Easy, Foreign Exchange Quiet and
Business Generally Dull.
WALL STREET,
- NJ


MONDAY, March 90 r NJ
The discussion of the subject OF the repeal OF the
ysury law opened in this column this ihornlng
was continued ON the street during tue Jay WIN
general acknowledgment Of the enterprise Oh the
HERALD in having opened this discussion al
timely moment. In this connection tue suoJece
OF the personal tax State imposed upon banking
capital was also brought forward. This is tax
directly upon money averaging TO 81 per cent
which OF course, is eventually paid by labor, III
the increased rate OF interest, and is so far uncon-
stitutonal that it is virtually direct tax. Thus
man coming here with capita, OF 81 900, 00o which
he wants to invest IN the banking business
that is loan out on call or to COM
merclal men-nas to pay 10 81 per cent
or whatever the local rate CT personal tax may
be- before he can engage In business. The usury
law fixes his maximum interest return at per
cent leaving him So to 4 per cent profit upon his
money l. this wise policy2 Can we hope to rival
the other commercial centres OF the world and
make New York the great emporium OF trade
IF WE HANDICAP CAPITAL
IN this way? Is it not more natural that capital
would fight shy OF US, and seek employment else
where where it would be less burdened with re-
strctions9 And yet we need this capital. We
need all can get or it. We need 1t to stimulate
real estate Improvements where 1t is handicapped
In the same way IN the tax on mortgages we need
1t to increase our terminal facilities; we need it to
tighten the burdens OF commerce at this port; in
one word, need it to give US fair
show in the great race for the control Of
the exchanges OF the world. And yet our
legislators have no conception Of the Importance
OF such a reform. They think and argue that
taking this tax or capital Will be to impose
fair burden upon labor and talk to US OF "bloated
dbondholders u who pay no tax upon their invest
ments as drones. This is too absurd to deceive
Wall street. but it deceives many outside. Let Us
examine the point shortly.
LABOR Is TIE BASIS OF VALUE But CAPITAL GIVES
LABOR THE OPPORTUNITY OF PRODUCTION
which supplies that value. Bread has more real
value than gold, as the one sustains life and the
other, placed where it is not exchangeaole, would
not But the price ofbread is regulated by the cost
OF production, and that cost results from the in
terest or return which capital demands to engage
in the work OF production, beginning with the
planting OF the seed and ending with the
selling Of the loaves. Now, 1t does not
need any great intelligence to understand
that that interest return OF capital Will be the
lighter for the less burden it has to endure, but
that hampered with direct tax 1t Will demand an
equivalent from the branch OF trade where 1t finds
employment. SO that taxing money simply means
taxing bread and taxing doubly all things else
that need money to stimulate their production.
This production would be much enhanced alike by
the removal OF this tax as by the repeal Of the
Usury law. Let have free money for this city at
least If the the State does not wish it, and
we VIII soon show signs OF prosperity that will
distance all our rivals.
BOSTON HAS TRIED IT WITH EFFECT
In the abolition OF her Usury law; we may safely
try respect both TO that and the repeal OF the
tax on personal capital. 1t may be asked where
will the State county and city collect their taxes II
Vha trnrp
real estate, personal property OF every other kind
but money, movable capital designed in It's circu.
lation and use to produce other and higher values
capable Of taxation, but reaching that end the
more rapidly the cheaper 1t is. In other words,
don't hamper production by taxing the very source
OF that production, viz. the money needed to
stimulate it, but let production be untrammelled,
and then, when necessary, tax the product and
make money free.
The principal feature OF any special interest on
the street was the news from London respecting
NEW ERIE LOAN
now being placed on that market. 1t appears the
Erie Railway offered at London to-day f3, 600, 900
(or Sl5 1000 O00 per cent second consolidated
mortgage bonds at rs, through the London Bank
ing Association. The books Will close on the 18th
inst The prospectus for this loan was brought out
on the 9Th. These bonds are part OF new issue
of $40 coo 600, OF which s10,>oo,0oo have been
served to take up similar amount Of convertible
bonds Issued last year. 1t Is stated the loan was
at Il to q premium-thatis, upon the offered figure,
ss-closing at 4. It should be remembered that,
while these bonds are offered as second consoli-
dated mortgage, they are virtually sixth mort
gage lien upon the road, the mortgage obligations
OF which, taken from official sources were in Sep
tember 1872 as fonows:-
First mortgage bonds due 1897 ........ $4,000, 600
Second mortgage bonds, due 1879. 4,O00, 900
Third mortgage bonds due 1888. 6UOO,OOO