Morning journal and courier., 1881-01-08

5upcEt1S1OA UT R4f0 any bEOuOtS. OA bAS
 Stock Exchange alone can he usually find 8
 security of the kind. And accordingly there
 is always an immense sum seeking employ
 ment there. It has been said-we know not
 upon what basis of calculation-that at the present moment there are e200, GOO, 900 in ever may be thought of this esti-
 mate, it is certain that the amount is enormous In France it is generally
 estimated that in spite of the loss of Alsace-
 Lorraine, of the ravages of the pltyI5oreT1,
 and of the series of bad harvests, the annual
 savings are about e120, 900, GOO sterling. We are inclined to think this estimate too low. It is only half Mir. Giffen's estimate for the
 United Kingdom during the period of 1885,
 75, and France, we know, is making marvel lous progress in wealth, her people are among the thriftiest in the world and the national riches are so widely distributed that very few among them are without the means of saving something. They invest upon the Stock Ex- change far more generally than English peo- pie do, and consequently the demand for Stock Exchange securities is very great in France. It is hardly necessary to say any thing of the great and rapid growth of wealth in the United States. Estimates of the rate of growth must necessarily be very conjectu- ral but we may safely conclude that the an- nual savings are not less than in the United Kingdom. Thus for these three countries alOu6 W0 arI1Y6 hI d BTdIu IOIdl Ol dOOut e6OO, GOO, 900 sterling of annual savings. If this conclusion appears incredible to any of our readers, we would remind them that Russia, the poorest of the great European States, was able to defray the whole cost of the war against Turkey out of her own saw ings. Not having been able to raise loan abroad, she was compelled to borrow at home
 that is to say, to defray the cost of the war out of the funds in her own loan market If the savings of Russia sufficed for this pur- pose, our estimate for England, France and the United States is clearly not exaggerated.
 The demand growing out of this vast sav- ing necessarily enhances prices. And the eff feet is intensified by the rapid diminution of existing first-class securities and the rare crs- ation of new ones. Since the close of the civil war the United States have paid off nearly 16O millions sterling of their debt, and they have converted the greater part of the remainder into debt bearing only 44 and per cent. interest. The sizes and fives still outstanding will fall due and be refunded next year. When this process is completed nearly one-third of the United States debt will be swept away, and of what is left not single bond will bear more than H per cent. interest. Moreover, the reduction in the charge of the debt will be such as to make it possible, if the people so choose, to clear it bodily away in about fifteen years or less In other words United States bonds will not be obtainable in Europe. Compared with what the Americans have done, our efforts to re- duce debt have been trifing. Still we have greatly reduced the funded debt during the past twenty years, and in 1885, when the ter minable annuities fall in, 1t will be in the power of the Chancellor of the Exchequer of that day, provided peace is preserved, to put in operation a scheme that will rapidly re- duce the debt. Further, Turkeys repudia- ton of her debt in 1875 destroyed at stroke what had previously been considered vast property. And the bankruptcy of so many other States has still further narrowed the area of investment Against these re- ductions and disappearances the only great creation of first-class securities within the past ten years has been the French indemni- ty loans. It will be seen, however, if we add together the repayments by the United States, England and Germany and the repu- diations by Turkey and Peru, that the latter greatly exceed the new issues. In fact, since 1873 new issues upon great scale haveI ceased. This is true of industrial and com mercial undertakings as well as ofStates. As we recently in discussing the railways of the world, the United Kingdom has practical ly completed it's railway system. Whatever may be done in the future, there can in this in the past. France, Germany, Holland and Belgium find capital for their own lines Russia has not credit enough to raise loan for the present, and Hungary is obliged to be cautious. It IS the same with most of the colonies. At any moment new mania for foreign loans may no doubt spring up, and may be financed for all sorts of places; but we are now dealing only with the present and the immediate past, an3itis that the issues of 6rst-class securities have not kept pace with the reduc- tions At the same time the new savings constantly made have been seeking for in vestment and have not been met by any new creations.
 The inevitable result of this double move ment is the rise of prices to which we re- ferred above or, in other words, 8 fall in the rate of interest. This Is the natural tenden- cy in all advanced communities. During the past forty years it has been counteracted by the construction of railways. which, in the United Kingdom alone, have used up capi- tai nearly equal to the present amount of the debt. The tendency has further been checked by the laying down of tele- graph wires all over the globe, by the re- placement of sailing vessels by steamers, and the substitution of iron for wood in naval construction, by the vast development of in- dustry and manufactures, and by the 1m- mense loans made to foreign States. But there has come pause in the creation of all these forms of investment, and instantly the tendency of events asserts itself The prices of securities rise, money accumulates in Lombard street, and bankers complain that they can get nothing for it. Is this state of things likely to last '? Are the saving classes per manently to make up their minds to lower return for their savings? It is always haz- ardous to predict but we are not inclined to give an affirmative answer to these ques- tions. We see no reason to conclude that the era of mechanical inventions has abruptly come to an end and if it has not, we cannot suppose that our present instruments of pro- duction and locomotion do not admit of inn provement. To take an illustration. If the Thomas and Gilchrist process of making steel turns out as well as is now expected, it is only reasonable to infer that steel will iron in naval construction, just as iron supplanted wood, and conse- quently that we are about to witness a revolution in shipbuilding Further, steel rails must take the place of iron rails. Even now this latter change is in progress. But, if really steel is so much more lasting than iron and so much cheaper as is said, railroad directors will soon find out that the line which is first steel-laid from end to end will get an advantage over it's competi- tors; and when once this is realized there will be a race between the companies. But such a race would involve 8 revolution in the iron industry also, and a complete re- construction of works; and none of these transformations can be effected without an immense expenditure This particular fore
 
 case the possibility shows how single great invention may put all vaticinations to nought. Again, as we pointed out last week, the rail way systems of the world are as yet in their will certainly be extended, and must use up vast capitals. Lastly, should a great European war break out, it would rapidly absorb the worlds savings. It would be out of place here to inquire into the probability of great European war; but nobody will deny that it is among the possible contin- permanent tendency towards low rate of interest, it would be rash to assume hastily that the inducements to saving are about to be diminished.
 Russian Barbarian.
 From the London Telegraph.l
 Our Russian contemporary, the GoEos, gives conspicuous publicity to a terrible story of priestly and peasant barbarity reach ing that journal from Uschitza, in the gov ernment of Podolia. Some short time ago