New-York tribune., 1874-08-13

AMERICAN CREDIT ABROAD.

| AMERICAN CREDIT ABROAD.
ITS DECLINE DUE MAINLY TO RAILROAD DEFAULTS
| MOST or THE SUFFERERS GERMASs-CONCLU-
| sroNS or THE REPRESENTATIVES, or GERMAN
| BANKING HOUSES.
The decline of American credit abroad has
been subject of fscdon the part Of tho
thinking business classes OF this country have
witnessed with alarm and regret the rapidly growing
Dissemination Of foreigners 10 invest In the
put forth American corporations The ds
trust has been pointed out In the columns OF The TR
UNE. The extraordinary growth OF the American rail
way sysem which invited the attention of capitalists
drew into the nets Of artul large numbers ~ for
eign investors, who saw IN the market great
opportunities for tho employment OF their cap
ital. Railroad schemers secured franchises for
railroads which many instances un-
necessary, 90 they extended through unproiucuye
or sparsey settled sections Of the Tley is'ued
bonds extrayagant rate per nile put them upon
the European markets. and then either did not build tho
roads or built them In an imperfect At a. little
expense possible, dividing the surplus among tho
members Of the railroad rings Germany has been tho
most productive field for the placing Of railroad aud
other loans, and, consequence, the thrifty people
who invested In them have been largely victimized
This in degree owing 20 the people them-eyes.
who. in their eagerness to secure good bargain
and great rates, failed to examine the sccu
rity offered, and exerted themselves TO go'
the bonds at the very lowest figures possible In some
the bonds sold at 80 and 30 per cent he
low par. Again. the resources OF the roads having
failed to meet the indebtedness. additional loans
made for the purpose OF paying the Interest Tho
evil great enough before the panic has assumed enor-
nous proportions then. The defautng raj roads
number nearly OO and the distress undergone by tho
holders Of the bonds at home aud abroad can readily bo
understood So great has the evil become that tho
United States Consul at FrankortOn the-Main deemed
1t necessary forward special communication on the
subject TO the state Department at Washington After
euumeratng the causes OF the EVIL he says
The honor IA we'll the credit Of our country hiss
been impered by the reckessness with which under
ssne bonds IL is now TO be- wholly sacrificed b. tho
failure OF parties to meet their payments the Inability
OF the holder to compel payment, and the -lriu"ue-s
aud indifference with which the country regards ths
state Of things
Now the interest offered by European enterprisess 10
equal to the OF in the United states
Hereafter this capital will find abundant In its own
country. As proof OF this II may be stated that IN
1884, and bonds ofderent Governments and new
enterprises were offered the market OF Frankfort to
the amount OF nearly $1,000 10000
A reporter Of THE TRIBUNE visited yesterday num-
her Of the leading German bankers in the vicinity Of
Wall and Broad for the purpose OF obtaining partc
uars concerning foreign spectators especially
Germans, who had suffered by investing in American
railroad bonds The bankers thus visited freely fur
nished information They had for long time been OBJ
servers Of the unlawful action the part Of the rail-
road companies and the widespread suffering caused
thereby. II was confined to single nation, but
throughout the length and breadth OF Eu.
rope were found the unfortunate investors
in deprecated railroad bonds. The suffering
was not confined to professional spectators. On the
contrary there many OF the poorer classes who
looking about for safe and wepaying investment
had finally settled upon OF these loans, Ignorant oil
the risk which they were ncurring. SO many OF the
railroads had deaulted in their interest that It was i'm
possible recount them all, and hence unfair to men
ton any, But the dangerous custom had been followed
by many corporations that the foreign bondhodera
losing all confidence in American investments. ina
credit the United States must necessarily be seriously
affected by this tendency the part OF railroad corpora
tons Many OF these defaulting roads Were IN
the State Of New-York; many wero in the West
aud some in the South. 1t believed
that the principal roads had already seen their worst
days. however and that IN most cases NJ more serious
depreciation may be looked Tor. The roads wnich wra
most deeply involved wOalf of course, have great il.
Guilty and with them The end had not yet come Ila
condition OF unfinished roads, too was III many cases
Il was bciiSved however that the mrePre.cnt'
made this side the ocean, aud not by btnN'
ers in Frankfort. has been sometimes stated II wa,
5eNei ,sN Rht ie Sere S5ns nonSSi % m g tem TS
dependent Their good name and they could never
desirableness OF American securities
The defective laws furnished the main difficulty.
holders and the court. throwing obstacle In
their way When few weeks ago, the first mort <age
bondhoiers OF the Rockford and Rock Island Rulroad
asked for the appointment OF receiver "Le was oD-
tanned by the opponents OF the nrs mortgasc BOND
holders. The present system wrong M many Ways.
and Congress should pass law tor the protection O to
first mortgage bondhoIders Foreign bondholders hti
many times entrusted the management Of a6trs %
various Committees, and thus sought for redress A
new attempt making, but with so much to contend
against that satisfaction hardly possible, ana even
should finally crown these efforts many victims
would have fallen In the mean time. The only WY IN
which the credit Of the country could be upheld 10
meet all cations fully The only way do business
well WAS TO Id honestly.