Alpena weekly argus. [volume] (Alpena, Mich.) 1871-1893, 1889-03-13
Money Cheap.

The decline in the earning power
of money is a serious matter to many
families in New York. At the pres
ent time this power is only about one.
half what it was twenty years ago,
and ten years hence it probably will
be still less. The decline has been
steady, and il seems likely to continue.
The more money there is in commu-
nifty the cheaper it must be, and
therefore the greater the quantity the
less, in relative sense, is its earning
power. Accumulated wealth is con.
stantly piling up in New York Many
millions are added to it every year
Some Of these millions appear in the
reports Of the saving banks, trust
companies and life insurance compa-
MES. More are seen in the large
yearly additions to the aggregate real
estate valuations, which have gone up
fully S300,000,000 in few years.
The steady increase in the number of
individual millionaires, or of men
rapidly advancing to that rank, is an
other illustration. A dozen more
might be given, but it is needless.
The main fact, that accumulated
wealth is rapidly piling up, is evident
to all who give any attention to the
subject. A large number of persons
are obliged to give attention to it.
Families who live upon the income
from investments can't help doing so.
Take, for example, family with the
proceeds of 100000 to live upon.
Twenty years ago there was no diff
Guilty in safely investing 100000 at
Z per cent. Real estate mortgages
and bonds as good as gold paid that
rate of interest The family owning
the 100000 could confidently count
on $1,000 income from it every year.
But how is now? The same sum in
vested in the same manner won't pro-
duce more than $4,000 at the outside
The savings banks now limit their
dividends. to 81 per cent. No trust
company will pay more than 3 per
cent. on deposits, and in most cases
the rate is not over 2 per cent. Unit
ed States bonds and good local bonds
don't average over 3 per cent. clear,
when allowance is made for the prem
ium they command. Very few rail
road bonds that are really reliable in
an investment sense can be counted
on for more than AZ per cent when
the same allowance is made. In the |
case of real estate mortgages, any man
wanting to borrow money on city pro-
perty can get all he needs for 4 or Al |
per cent, if the security is good. And
so on along the whole line of invest
ments that are solid. When William
III. Vanderbilt sold S50,000 900 worth
of New York Central stock and put
the money into United States bonds
at Al per cent he was thought to have
done very singular thing. But Mr..
Vanderbilt simply looked ahead. The
average interest to-day, where the Sc,
curity is reasonably safe, is not above
4 per cent. Many capitalists arc sat
isfied if they can clear 81 per cent.
The decline in the earning power of
money is, then, serious matter to
those who are dependent upon income
from invested money for support. 1t
means the cutting off of nearly half
of their former resources, and in some
cases fully a half For the most part
they are widows and minors, who are
unable to make up the loss by any pro-
ductive power of their own. All they
can do is to accept the situation and
retrench. This is often hard trial,
but there is no remedy and it must be
borne.-N. Y. correspondent Of De-
troit Free Press.