The morning star and Catholic messenger. [volume] (New Orleans [La.]) 1868-1881, 1877-07-22
REDUCING zHERA7E OF INTEREST
IL. Y. World, July 16l


| 1t is announced that several of the insurance
companies and savings banks are beginning to
| lend money at six per cent The signiG canoe
OF THIS announcement is very great. II is to
| be remembered that the insurance interest
measured by the capital invested in it and
| controlled by it, is one OF the greatest in this
cenntry, next, we believe, to the railroads. Ii
| makes difference of some $500 600 annually
to one insurance company in this city whether
| 1T receives six or seven per cent. on it's sur
plus. Ii ia not to be supposed that the trustees
| OF an Institution Will sacrifice such o as
this. even for one year, without the most ma
ture consideration. And such sacrifice can
not be made for one year. A well-managed and
dorable corporation CT this magnitude is not
turned about by every turn of the stock
market 1t does not expand its business when
there is q flush feeling in Wall street nor con-
tract 1t when Wall street is dull. 1t has and
must have permanent policy which is not
lightly to be changed. When, therefore, the &C.
khowiedged leaders of their business, the
largest and most prosperous life insurance
companies and the oldest and richest savings
banks, volunteer to give mp q large portion of
their income, the surrender means much.
In the present case the determination Of the
insurance companies and savings banks to &C.
cept lower rate of interest than they have
hitherto received is o recognition of the con-
ditions of business in this country. Itis an adj
mission that those conditions are not spaamo.
die, but serious and permanent. The FORD
several days since maintained this view of the
state of trade, in opposition to those who ex-
poet trade to revive with a rush" and look
forward to seeing, il not in 1877, then in 1873,
SONS such years of plenty as in 1866 and 1868.
The World insisted that that could not be. The
leaders of trado, the men who do as much as
any other men towards regulating the money
Market not from day to day, bat from decade
to decade, have expressed their belief that it |
could not be, and have expressed it in o way
which leaves no doubt of their sincerity. OIL
course they have made a sacrifice only in name. !
Ii stands to reason that when the United |
States can borrow money at four per cent. q |
private borrower, Offering the unquestionable |
security which only life Insurance companies |
and savings banks can legally accept, cannot |
be expected to go on paying seven. The |
cent. loan at par has been q surprise to many
men, and many men insist that il is negotiable |
only on account of peculiar and transient |
financial condition. The life insurance COM
pRnies take the other view It would be folly |
for them to lower the rate of interest they de-
mand if there were fair chance that they
not believe they can and hence their
action. Their acTion will have a wide and
probably an immediate effect. There are no
in the United States better able
to hold on till the storm blows over thRn those
which have decided that it is not likely to blow
over, and that they will take what they can
get now because they are not likely to get
more by waiting. The optimists ought to be
By their action. Those who con.
sider that it is slight thing which prevents
the United States from entering upon a new
q lowering of the rate of interest by the men
who do much towards fixing the rate of inter-
sst ought to remove the obstacle.
If business is to revive soon in its old way,
n the old and in new forms, with increased
activity and intensity, here is q chance. A
difference of one per cent in the rate for the
lse of money may easily make allkthe differ
,nce, with men who calculate closely, between
,he success and the failure of On enterprise, If
We are on the verge of such revival of bust
less as may be likened to q revival of religion,
uch difference ought to determine it. We
10 not found any sanguine expectations on this
lction, because We do not see that difference
# one per cent is of much Importance to the
projectors of such speculative and imaginative
md as are looked for now in some quarters.
We do believe that this difference will be for
he good of business, because in the first place
t proceeds from q recognition of the actual
acts of the case, which must do good and can
Tot possibly do harm, and because in the second
,lsoe, although is lie Of no great consequence !
o the commercial ideslists, The difference - Of