, 1875-10-23

converted into money by sale, and he
cannot know beforehand, what price they
will fetch in the market. This uncertain
ty is the second of the two objections
mentioned above, and it is as we'll, to say
at once, that some loss will have to be
expected. In order to form an opinion of
the amount of the difference between the
nominal amount of the loan and the sum
which the bonds received as equivalent
will produce, we must look at the rate,
at which bonds of the same kind are
bought in Denmark, making allowance
on the one hand for the smaller degree Of
confidence in West India property general
ly prevailing in Europe, on the other
hand for certain advantages. offered by
the St. Croix Association, viz. a. higher
rate of interest, and an increased degree of
nominal security.
In Denmark investments in Credit Asso-
Citations bonds are made'on the calculation,
that the money invested shall produce
q net revenue of II per Cent, and as the
bonds bear only q nominal interest of 4
per cent, the revenue of Al per cent. is
obtained by q reduction Of 10 per cent. in
the purchase sum. If an investment with
an outlay, OF 500 gives an interest Of 4
per Cent, the same investment with an out
Icy ofonly 800 gives Al per Cent. interest,
and this is with triHing variations the mar
ket value of those bonds. If this rule were
valid for bonds of the st. Croix Associa-
tioD, which are to bear s per Cent. interest,
their market value would be 1921 per Cent.
The. other advantage in favour of the
investor. in the last mentioned bonds, con-
sists in certain regulations and measures
intended to strengthen the confidence of
the public in the Institution. The first
Of these is, that the maximum of the loans
by the AssooiationsIin Denmark-six-tenths
ofthe value o fthe property-will be leSsened
to fve-tenths. There is furthermore rea-
son to hope, that the State Treasury may
receive the bonds of the Association in
payment Of its outstanding claims at par,
which could not but have a decidedly ia.
vourablo influence on their value generally.
These different circumstances must
however not lead us to expect, that
our bonds will fetch q higher price
than those of the Associations in
Denmark. We must remember, that
Denmark is the only country, where our
bonds will find purchasers at all, and it is
not to be supposed, that people there
will be equally ready to embark their
means in West Indian property, of which
they know nothing except through the
statements of others, on the same terms,
as il the Association was one in their own
country. All what we with tolerable
safety can expect is that our bonds will
sell at the same price as the others, say
80 per Cent. Hence the participants in
the Association must be prepared to put
up with o loss, as to figures, of 10 per
Cent, to which must be added the 2 per
Cent, which is to be paid on entering,
towards the establishment of a Reserve
Fund, according to : 2 ltr. k. OF the
Ordinance. 1t is then for every one, to
judge whether this apparent loss is of so
much consequence as to counterbalance
the great advantages of the UNDER
taking which he expects both individu-
ally and as interested in the fate of the is-
land from the establishment of the Gre
dit Association and from the Central Fac.
tories.