St. Tammany farmer. [volume] (Covington, La.) 1874-current, 1896-10-10
DECLINE IN INCOMES.


BoeO4Do t4Oo 10Veo4o00eo C0B OOV0
Neas1y Oae-Half.
The returns upon safe investments
have fallen 10 low - to become . ne
rious matter to persons relying for
their income upon invested capital. In
the next ten or fifteen years most Of
the railroad bonds issued years ago .:
s and 2 per cent. interest fall due. and.
as they are abundantly secured. they
will be extended at . greatly reduced
rate Of interest. Two such cases are
before Philadelphis investors at the
present time. The first mortgage 2
per cent. bonds of the North Pennsyl
vania Railroad company. . perfectly
safe investment, are being extended at
4 per cent. The first mortgage per
cent. bonds of the Fennsylvania 4
New York Canal and Railroad company
are being replaced at ~. per cent.
Both these issues were put out 30 years
ago, and now the new holders have
their income cut down from IS to 43
per cent. Other instances can readily
be found. Twenty years ago the con-
solidated mortgage 6 per cent. bonds
Of the Pennsylvania railroad sold at
par; within few months the company
had scld bonds secured by the same
mortgage at 3h per cent.
The condition is world wide. British
consols have lately sold up to ia per
cent. They bear 2A per cent. interest.
which is to be reduced to 2h per cent.
in 1908, while the bonds are absolutely
payable 20 years thereafter. The rate
Of interest is falling throughout the
civilized world. This has been It's course
| for 30 years, and there 10 no reason to
suppose there will be sny change. Tho
wealth Of the world is increasing every
year at . most wonderful rate. Every
| invention that tends to conserve ener-
gy, to augment production and to fa
cilitate business 10 one more influence
that aids in the creation OF wealth.
Never was the human intellect 10 busy
a. now. 80 ingenious, 10 well supported.
And with every year the pressure for
rood investments increases. The sup
ply il not at all equal to the demand.
nor can it be. 1t is still possible to -
cure investments that yield 6 per cent.
interest. but they are not ordinarily
such as q trustee would select for his
beneficiaries. A risk must be taken.
land even these opportunities are not
~ numerous N they were few years
ago. The truth must b. recognized
that We have NO longer frontier. our
country il developed, all the best n
vored spots are occupied. and there u
NO longer . necessity for good borrow
ers to pay per cent. for money.
From these conditions It seems tina!
a further fall in interest rates il In
evitable. Railroads that now borrow
money at 3H per cent. will be able te
borrow at before long. The stocks
Of sound dividend corporations Will rise
in price. But there will be one impor
tant result from this condition tha'
will affect our career - . nation. A
the pressure for good investments in
creases our capitalists will reach on,
for foreign countries just as England
has done. We have Cuba and Soutl
America at our doors, and we have thu
carrying trade Of the world before us
lit il morally certain that our adven
turous capitalists will reach out fol
these new fields. They will retard thu
declining tendency Of income for
time, but they cannot stop the mex
orable law Of commerce. A generation
hence the rates of interest now paid
which we consider extra ordinarily low
will seem to our successors to be excep
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