The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1874-08-13
GERMAN Einanc,al AFFAIRS.


WASHINGTON, a ugust 1l.-Our consul, a
Frankfort-on.the. Main, writing to the De
nartment Of State, says the rapid increase In
tho number Of banks In Germany during the
rear 1862 has produced the disaster that was
then feared. Many of them have been COM
PEELED to liquidate. and distrust has been
brought upon oil. The result and c0nse-
ouenccs 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 fall Of railroad securities in this market
has exceeded the prophecies of the most
skeptisal. Railroad bonds from the United
States, promising abundant security and
large profit and interest to the holder,
have been sold TO Frankfort bank
ers at low rates, who, by means Of cap
tiyating statements and encouraging words,
and influenced by hopes OF great profits to
themselves, have succeeded In selling them at
advanced rates to the investors aud spccua-
tors. who have scattered them throughout
the length and breadth Of Europe. Bonds
have been issued for the sole object of meet
ing the interest becoming 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 Tor All
instalment of interest is borrowed. and soon
large floating debt is created. The bond
holder is then asked to contribute TO pay the
nosting debt. Possession Of the road Is never
offered to the Observation-Disclosures, out
they are left to contend against the parties
whom they have assisted when they could
find no aid in the United States.
1t is a great mistake to suppose that the
capitalists and wealthy bankers OF Europe
arc the sole holders or the holders OF the
greatest portion Of United States Govern
ment or railroad bonds. They are held to
great extent by the parties whose sole de-
pendence is the income thcrefrom. They are
to be found in the smallest amounts IN the
hands Of the trader and mechanic ana all
classes At the present time (lS13) 50 many
railroads have failed their interest tina: the
road that pays * the exception.
Now the Germans di>tru-ts all. Il Is Use
less to say or 10 demonstrate that this ROAD
cannot fail to pay its Interest. tiaT arr a..
alike condemned. The a. re o. i.2 states
of Georgia and Alabama - meet ,Grif liz
oiitics As principals OF -; EuI-,nt9rs III:
been almost fatal 10 >t..s @rc4It. ''!e Hcr'
mans cannot Sc. hOT. a SAFE Of The TraltA
of those States. and with poTc.3 o! t:H:..Jl.
can fail TO pay its liabilities.
The Germans now 0or:l 80 Ic!icTo that
they have been deceived and 0cfrs;dcd.
They find that partie7 !n;cr"-te': - 81! an.
introduce their bonds into The nar':rts OF
Europe exhibit aow no care CT .a'::;,',: Tor
them, but on the other hIntt throw 'ls.rc..;5
in the way OF t,lcit el.cru'uT .h.!f !."Is.
They also find that SO Tcrc:sa tat .;cay an!
disrcg .rd their -Iariuc cs: TINT t:5l .he
distance they seem Indifferent - them, and
almost seem disposed - FORGET their l!abiil-
ties. or 10 wholly Ifoid their payment. Inc
embarrassment CT railroads t',at arc ..ow an
finished seems to re without rp:;cdy, unless
with much loss n Sor4c parties. It IL dltter-
ent with completed roads, which, in order
10 make them profitable, only require the
business that ;!rlc will brl':.5 10 Lheln.
The honor ~ rcel a TIC credit of our
country has beer reri.cd ~ the recklcSaIess
with which. undcr tie law, states and cor.
porations have becn allowed t. issue bonds.
1t is now ID be wholly sacrificed by the
future of parties to r1cet Cher payments, the
inability of the lJider to compel payment.
and the suoinenc2s aui iilii;;ereIcc n'ith
which the country rcgGr.5 this &tic Oi A.
fairs.
The capita! of Europe has been t"rnc| TO-
wards the United states III account Of tn:
prospects and hope u ii I2rr tpt"r->t SOW
The interest offered ~ European enterprises
is equal to the usual r2t<5 a.. interest N the
United States. Hereafter .H.i cADl.a: VIII
find abundant Use in is own coiniry. y a
proof OF this il may be stated that IN 49,
shares and bonds OF different Governments
and pew enterprises were offered Iii the
market OF Frankfort 10 the ;s!aollnt Of nearly
one billion OF dollars.
Ii is TO be hoped that under proper man
accmcnt dclaultln@ States and corporations
viii vet be able TO do justice not only to their
creditors al home. but also to their equally
deserving creditors abroad.