Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-05-23
A DULL MONEY MARKET.
ESPECIAL TELEGRAM rorHE DISPATCH,


paying securities remains firm, and is even
advancing. The prophets of evil who have
| been predicting both the failure of the Rich.
| mond Terminal reorganization scheme,
which has been so long before the public,
| and the passing of the quarters dividend on
| Northern Pacific Railway preferred stock,
| have had their sagacity vindicated by the
| event, and, just at the close of the week,
| came the announcement of the new $780, 600,
600 second mortgage of the Atchison, Topeka
and Santa Fe Railway Company, which, ap-
| parently, Is bold reputation of the con-
tract OF the company with its income bond
| holders and an attempt to bulldoze them
into accepting considerably less than they
are entitled to. The Western floods have,
| likewise, discouraged purchases of the
| STOCKS OF the companies whose property
they nave damaged and whose receipts they
have cut down. But beyond the limits Of
the direct influence of these untoward agen-
cies, purchasers show no signs of trepida-
ton, Dut rather the reverse
Ihe 1act Is that abundance of idle capital
seeking Investment, both here and In
europe, ana the consequent low rates of IN
tereSt Tor money are adverse to ANYTHING
like permanent depression of really good
stocks and bonds. In this city call loans on
marketaple ma securities can easily be had at 2
per cent per annum, and less, while time
loans on similar securities as well as dis
counts of f1rst-class commercial paper, are
qooteu dC nOG over o16 per cent.
Ruling Rates in Foreign Markets.
In London, the Bank of England rate, for
the first time in five years, stands at per
cent, with call money at one-half of / per
cent, and discounts in the open market at IL
per cent. In Paris, Berlin, Amsterdam,
Frankfort and Hamburg the rates of dis
count In the open market range from to
29s per cent, and it is only in Portugal, Spain
md ta1r
bad, that higher quotations are made AS
usual, this condition of things impresses
many minds as being an unprecedented nov
city, IN the same way that every hot summer
Is declared to be the hottest ever knownand
every cold winter the coldest. 1t is need.
less to say that we have had many Just such
seasons before this one and shall have many
more of them in the future. Day is no more
surely followed by night, f1ood-tide by eDb,
and summer by winter, than are periods OF
great activity in industry, trade and enter
prise by periods of reaction and compare
tive StagnatiOn.
Two thousand and more years ago the
wise man of Scripture wrote: "The thing
that hath been it is that which shall be:
ana that which is done is that which shall
be done. and there Is nothing new under the
sun. These words remain true to this day,
and they apply as well to financial affairs as
TO those OF less Importance.
False Ideas of the Present Reaction,
By most people, too, the present reaction
Is attributed to the Barring suspension of
year before last, and to the shock which that
catastrophe gave to general confidence
ihls, though true i'll part, is not sufficient to
act entirely for the prolonged and wide-
spread dullness now prevailing. Had the
Barring failure not been supplemented by
the Dad harvests of last year in Europe, by
the collapse of speculation on the continent
as well as In Great Britain, and by the fear
OF hostil1ties by Russia against Germany and
Austria, Its effects would by this time have
passed away. Our new tariff is also charge
able with disturbance of European manu-
featuring industry which acts unfavorably
upon enterprise. When existing invest
ments of capital are yielding reduced profits,
or no profits at all, new ones are not made,
ana diminished demand for money for
both old and new undertakings leads to low
rates of interest as a logical consequence
How profoundly our economical legisla-
tion has effected Europe-in imagination, Mt
1eass Pri Is sn9wn Dy the regent speech Of the
curry condemnatory of free trade, and
lamenting the inability of his country to re-
taliate upon US with protection without do
ing itself more harm than good Were it
not, as his Lordshtp was compelled to
acknowledge, that Great Britain cannot i'm
pose duties upon the breadstuffs, provisions
and cotton, which constitute the bulk of her
purchases from us, without increasing the
cost of feeding and clothing her workmen,
and thus increasing the cost of the manu-,
factures they produce. protection would
have good chance of being tried there
Great Britain's Imports and Exports.
AS it is, the British people must endure
patiently what they cannot obviate, q very
considerable diminution of their foreign
trade apparently caused by our protection
ist policy. The British Board of Trade re-
turns for the past four months of this year
show an increase of imports of E3s2S 492 as
compared with the corresponding TOUR
months of 1891, nearly the whole of which
increase is in articles of food and drink.
The exports for the same period exhibit on |
the other hand, decrease of $685. 6i7 as |
with the corresponding four |
months of 1891, of which decrease f5,s71, ,535 |
is in articles manufactured or partly manu- |
100000 of it resulting directly |
from the effect OF the Mckinley tariff in |
our consumption of British tin |
plate and telegraph WIRE There is also
falling off in our buying of |
and cutlery. For the month of |
April the decrease in exports amounts to
S3, 042 504, which is 1l5 per cent of the total |
for April, 1891.
1t is of course an open question whether
Lord Salisbury does not, for political effect,
exaggerate the injury inflicted by our tariff
upon British trade. Evidently the increase
Of imports which he laments is due not to
that tariff, but to the bad barvests, while the
decrease in the exports of metal manufac.
turer to this country is not so great as to
Justify alarm. He probably had in mind the
recent protective legislation of France as
we'll as of this country, and the competition
IF German protected manufactures in South
America and other foreign markets with
,entage of the loss of British trade is not
it affects so great number of
people that their complaints are noticeable,
content with their profits, it terrifies poll
cian.
Advics to Pick Up Investments
But, whatever be it's cause, there is no
lisputing the dullness of the European
money market, and the sympathetic dull
less here. The stagnation shows itself
most conspicuously in the piling up of cur
ency in our banks, this being an effect and \
n indication of the same condition of
hings that makes interest low. Borrowers
# money, as have often pointed out, want,
lot coin nor paper, but the things that coin
nd paper will procure for them by ex-
hange. AS a matter of fact in very few
arge borrowing transactions does actual
money change hands. Usually only bank
redit is transferred by the lender to the
borrower and by the borrower to the seller
# the commodities he requires, and except
n paying wages and buying for small pro-
ucers no actual currency is employed. 1t I
$ true that we are adding every month be-
ween 81 900 600 and 81, 500, 900 to our stock of
money. and thus apparently to our loanable
apital.
Any long continuance of low rates of in (
crest on temporary loans inevitably creates
willingness to pay more for permanent in.
crest and dividend paying securities. and
7ere it not for the uncertainty that attends
II human affairs, should confidently pre-
let still higher prices for them. But
hough the results of this years harvest ,
ere and in Europe have yet to become
manifest, the contingency of a war in
Europe to be considered, and the finances
f olIr Government are in very unsettled ]