The Portland daily press., 1879-01-23
The Abundance of CAPITAL.

The latest issue of the Shoe and Leather
Reporter has timely and well-considered
editorial article on the abundance of capital
in this country to-day compared with our
poverty in that respect heretofore. It is
curious but by no means unprecedented that
the cry for more money should bs raised at a
time when capital is abundant and cheap.
That is not unfrequently the case; men con-
founding reluctancy to engage in speculative
undertakings with want of money.
The Reporter points as conclusive proof of
Its assumption to the patent fact that money
is exceptionally cheap, and that the decline
in the wages Of capital is greater in proper
ton than the falling off in the compensation
of labor. Heretofore the supply of available
funds has not been sufficient to meet the
wants of the country 1t has been necessary
to make up the deficiency by the negotiation
of loans abroad. In order to overcome the
reluctance OF investors to send their means
SO far out of their reach high rates of usury
have been offered them. We had large
foreign debt when the rebellion broke out.
1t had been contracted by corporations and
individuals. The shares and bonds of our
principal railways had been extensively pur-
chased by European capitalists. The differ
ences against us, arising from the excess OF
our imports over our exports of merchan
disc, annually augmented the sum of our
liabilities. The payments of interest occa-
stoned perpetual and exhaustive drain upon
our production Of the precious metals. When
the Government was confronted with peril
that threatened its existence, there was no
alternative but to raise means for repelling
the attack made upon it by the use of its
credit. 1t was obliged to borrow money by
the issue of every conceivable form of liabil-
ity. To-day third of the national debt has
been paid, and the interest on the remaining
two-thirds proportionately reduced. That
part OF it once held abroad has mostly been
redeemed. What is outstanding now is mainly
due to our own citizens, ard is to be coru-
puted as part of the surplus wealth of the
nation. The inhabitants of the countries be-
yond the sea have been buying our products,
and handing over to us in exchange for them
the due bills we gave them for the money
they lent Us when we were laboring under
pecuniary embarrassments. The amount of
private liabilities too has been enormously
reduced.
As result of this, the Reporter says: We
have now reached that stage of easy inde-
pendence which enables US to dispense en-
tirely with precuniary favors from our trans
atlantic npiOhhnPs -
to borrow money in London at three per
cent. as it was in New York at six. At
present the rates are not essentially lower in
the one city than they are in the other.
Our resources are abundant, for all our i'm
mediate or prospective requirements. There
is very little probability that there will be
any occasion for seeking extraneous aid here
after; it is much more likely that foreign
capital will find its way hither, and be offered
on such advantageous conditions as will in-
duce the acceptance Of it. The effect of
such state of things must, as matter of
course, be to create competition among
lenders that will keep the rates of interest at
low figures.
The Reporter thinks these views are en-.
tertained by many men in our Atlantic
cities, and that they are being quietly acted
upon. 1t gives, as illustration one case in
which, as long as six months ago, man
loaned $4,000 on bond and mortgage in
New York for ten years, at four per cent. per
annum. This would have been thought a
ridiculously small figure at any period prior
to the panic.