The New York herald., 1874-06-01
OPINIONS OF FRANKFORT BANKERS.
United States Railroad Loans In
Germany.
CAUSE OF FRANKFORT DIsTRUsT
The Bankers Themselves Greatly
to Blame.
EMIGRATIoN-KAPP's REMARKS.

FRANKFORT, April 28, 1874.
The impression produced among the Frankfort
bankers Dy President Grants veto OF the further
issue OF currency promises, was an exceedingly
good one. The telegram containing the news ar
rived just as the midday Bourse was closing. and
though no immediate effect was produced public
confidence IN American affairs In general wnicn
has been shaken here during the past year or two,
was greatly restored. Reputation the Frankfort
bankers did not fear. but they look forward 20 the
resumption OF specie payment, and the placing OF
the commercial relations between Germany aud
the United States on q sound valuation basis. One
would think that to European bankers the issue OF
q paper expansion, giving room or Increased
speculation, would be very welcome. But In this
case 1t was not SO. The bankers with whom con-
versed during the course OF the afternoon spoke
all in one tone. Mr.. Selgmann OF the firm
OF Seligmann Shetthemer, the principal
dealers In American securities here, said
'The impression produced by the veto was very
good. The act OF the President was very rational
one and he deserved the thanks Of the bankers in
Germany for 1t. He considered 1t q great fortune
for America, for the fear OF constant expansion
which would have been excited by any new issue
was thus allayed.n NJ. Seligmann spoke at length
Of the commercial relations of the TWO countries,
which are constantly growing in Importance and
which can be placed on solid footing only on the
basis OF gold valuation. While sat conversing
with NJ. Seligmann, Baron Erianger was an
nounced, who, IN the course OF the conversation,
corr0borated what had just heard. In his short,
emphatic sentences, he said, 'Tne veto produced
very good impression-an excellent impression.
President Grant has done himself and his country
great honor. The act will prove of vast impor-
tance to the country" Conversations with the
bankers Grunelius, Smith and Andree con-
frmed the above expressions. They all
spoke OF the excellent impression produced
by the veto. An American banker Of the city
spoke IN the same strain, and called my attention
to the two European States where constant ex-
pansi0n OF the currency was resorted TO, Austria
and Itay-whose credit on the German bourses
was SO deprecated thereby. He thought that the
Frankfort bankers had not feared so much the
issue OF few millions of dollars as the establish
ing OF a precedent the end Of which none could
see, unless in the financial history OF bankrupt
Austria and Italy.
AMERICAN RAILROADS IN GERMANY.
In my conversations with the gold men OF Frank.
fort was struck with the extreme distrust that
prevailed respecting American railroad bonds.
State repudiat0n and the failure Of railroad COM
panies to pay their debts were themes which
all the bankers Sided to. No new rail-
road bonds are being introduced here at
present. It would be difficult thing to place even
q good loan on this market, tor the simple reason
that the bankers here have suffered immense
losses on their railroad speculations during the
last two years. Holders OF good bonds are fearful.
There is just now large demand Tor Missouri
Pacincs, which are being bought up at low rate
here and sold to advantage In New York. "You
may Just as well talk OF lying as attempting to
sell new railroad bonds here,' said the American
banker, Mr.. c.. to me. "Even the old estab-
lshed railroad companies would not be able to dis
pose OF their bonds, because confidence In all Is
destroyed" Why confidence In American railroad
bonds Ia destroyed may be seen in q recapituiation
OF some facts. First the chief maleiactors-the
railread companies. Taking q stock exchange
list, Mr.. C. ran down the catalogue OF misiort {.
unes something like the following STRAIN
THE ROLL OF MISFORTUNE.
The Central Pacific stood at ninety; they are now
seventy-nine. Then the California extension
bonds. This railroad is run by the Central Pa
cinc; but people do not know what Is the matter
with it, and they have sone down as low as thirty
although the Central Pacific paid the interest,"
Inquiries addressed to the Central Pacific are un-
answered, and this is the reason why these bonds
which once stood at eighty, are now down to
thirty. The Pacific and South Pacific, OF Missouri
went down very much because OF the state want
ing to annul the sale OF the roads and retake pos
session of them. The bonds never would react,
because the suit is still pending. The United
states Circuit Court decided against the State but
the Senate passed q resolution to take the case
up to the United States Supreme Court. The
seven per cents OF the Kansas Pacific
were ninety, now they are thirty-six. The
Chicago Northwestern second emission), guar.
anteed nominally by the Chicago and
Rock Island Company pays no interest, and the
n foar rofu ta hnco
road does not earn anything. The Montclair and
New York Oswego Railroad burst, oregon Califor.
mia burst, Peninsula and Michigan burst, doing
nothing and waiting for something to turn ND.
Rockford Rock Island burst for the second time:
bonds issued at 10 and stand at Is. St. Louis
southeastern burst. The Alabama Chattanooga,
issued in 1859 by Eranger at s5H, stands now at
Is. The Chicago Burlington Quincy, the Oldest
bond on the list stands at 70. 1t is four and
half per cent bond and the highest we have here.
The Georgia, Brunswick and Albany, guaranteed
by the state OF Georgia, quoted at three cents
on the dollar. The Rockford Rock Island has be-
come b. yword In Germany for promises unfulalled
and abuse of It's creditors.
WHO Is TO BLAME9
perusal OF this list may enlighten us as to the
cause Of the lack OF confidence which now pre-
walls in Frankfort about American railroad bonds
Who Is TO blames The Frankfort bankers charge
our railroad companies with imposing bad roads
tent true; but the Frank ort bankers have no Que
but themselves to blame. They bought and placed
ON The market railroad bonds, knowing well
enough the unpromising character OF the under |
takngs. raey did not ask, as the road good
oneY' bnt "H0w cheap can we get itSn SuzDach !
bought the oregon road tor So or thereabout |
and placed the bonds on the market at over 10 !
Hundreds OF families have been ruined by this |
single speculation and, though the BANKER Cleared |
an immense profit, am told that he has Ss50OOO I
worth OF stock still on hand The Frankfort bank
ers ''paced' bonds here OF roads which could not
be sold in New YORK and which tbp nuu ukar
refused to touch, and which no one In the world /
VINO understood the country through which the I
roads passed expected would ever pay-or, at
least, not for years TO London is still good
market for respectable American enterprises, |
because the BANKERS there have shown sagacity |
and honesty In their dealings and if Frankfort is
closed to American railroad enterprises the I
FRANKFORT bankers, who have been accustomed to /
reap rich harvests thereirom, are the cause, Or 4
the simple reason that their cupidity got the [
better OF their honesty. They did not ask they did
not care, how the roads prospcrcd SO long as they