The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-08-23
OUR SECURITIES L. GERMANY.
Washington Dispatch to N. Y. Herald

| dSHluStOH Dispatch 10 N. i. deTdlu.
| Our Consul at Frankfort ont Main,
writing to the Department Of State, says the
.pid increase in the number of banks in Ger
many during the year 1872 has produced
the disaster then feared. Many of them
have been compelled to iquidate, and dis
, trust has been brought upon ALL The result
and consequences have been ruinous to men
Of small means who have bought the stock,
| or who have been induced to speculate by
means of the increased facilities Of borrowing
money The tal of railroad securities in this
market has exceeded the prophecies of the
most skeptical Railroad bonds from the
United States, promising abundant security
and large profits and interest to the holder,
have been sold to Frankfort bankers at low
rates, who by means OF cap waiting state
meuts and encouraging words and influenced
| by hopes Of great profit to themselves, have
succeeded in selling them at advanced rates to
the investors and spectators, who have scat
tered them through ut the length and breadth
OF Europe. Bonds have been issued for the
sole object OF meeting the interest coming
due. When the amount of bonds limited by
law is wholly issued the railroad either at once
ceases to pay interest or the amount necessary
for an installment of interest is borrowed, and
soon large floating debt is created. The
bOndholder is then asked to contribute to pay
/
is never offered to the mortgage bondholders,
but they are left to contend against the par
ties whom they have assisted. when they
coHld find no aid in the United States.
1t is great mistake to suppose that the
capitalists and wealthy bankers OF Europe are
the sole holders. or the holders of the greatest
portion of the United States Government or
railroad bonds. They are held, to great ex-
tent, by parties whose sole dependence is the
income theretrom. They are TO be found, in
the smaller amounts in the hands of the
trader and mechanic and all class IS. At the
the present time QS73) so many railroads have
failed to pay their interest that the road that
pays is the exception. Now the German dis
trusts all. 1t is useless to say or to demon
strate that this road can not fail to pay its in
terest. They are all alike condemned The
failure Of the States Of Georgia and Alabama
to meet their liabilities as principals or as
guarantors has been almost fata! to State
credit. The German can not how State
Of the wealth of those States, and with pow
ers Of taxation, can fail to pay its liabilities.
The Germ ms nov begin to believe that they
have been deceived and defrauded They
said that parties interested to sell and intro
duce their bonds into the markets of Europe
exhibit now no care regard for them, but
on the other hand throw obstacles in the way
Of their enforcing thei liens. They also find
that sovereign States deny and disregard their
guarantees; that from the distance they seem
Indifferent to them, and almost seem disposed
to forget their liabilities or to wholly avoid
their payment. The embarrassment of rail
roads that are now unfinished seems to be
without remedy unless with much loss to
some parties 1t is different with completed
roads, which, in order to make them profit
able, only require the business that time will
bring to ITEM.
The honor as well as the credit of our colln-
try has been periled by the recklessness with
which, under the laws, States and corpora
tons have been allowed to issue bonds 1t is
now to be wholly sacrificed by the failures of
parties to meet their payments, the inability
OF the holder to compel payment and the su-
country regards this state Of matters.
The capital Of Europe has been turned
toward the United States on accoun. of the
prospects and hope Of higher interest. Now
the interest offered by European entf rprise is
equal to the usual rates of interest in the
United States. Hereafter this capital will
find abundant use in It's own country As a
proof of this it may be stated that in 1872
shar4s and bonds of different Governments
and new enterprises We're offered in the mar
kot of Frankfort to the amount OF nearly
u, OO0 600, 900.
1t is to be hoped that, under proper man.
agement, detaulting estates and corporations
will yet be able to do justice, not only to their
creditors at home but also to their equally
deserving creditors abroad.