St. Tammany farmer. [volume] (Covington, La.) 1874-current, 1896-08-08
THE DECLINE IN INCOMES.
Return from Investments Cat DOwn
Nearly One-Half.


Return from Investments Cat Dows
Nearly One-Half.
The returns upon safe investments
have fallen SO low MS to become seri-
Gus matter to persons relying for their
income tipcn invested capital. In the
next feii Or fifteen years most of The
railroad bonds issiied years. ago at
and Z per cent. interest fall due, and AZ
they are abundantly Secured they will
te extended at a greatly reduced rate of
interest. Two such cases are before
Philadelphia investors ut the present
time. The first mortgage per cent.
bonds of the North Pennsylvania Rail-
road company, d perfectly safe invest
ment, arc being extended ut 4 per cent.
The first mortgage z per cent. bonds OF
the Pennsylvania & New York Canal
and Railroad company nre being re-
placed at ~ per cent. Both these Is
sues were put out 80 years ago and now
the new holders have their income cut
down from IS to 43 per cent. Other in
stances can readily be found. Twenty
years ago the consolidated mortgage =
per cent. bonds of the PENNSYLVANIA
railroad sold at par: within few
months the company has sold bonds Sc
cured by the same mortgage at 81. per
cent.
This condition il world wide. Brit
ish consuls have lately sold up to ia
per cent. They bear 25 per cent. inter-
est, which is to be reduced to 2H per
cent. in 1908, while the bonds are abso-
lutely payable 20 years thereafter. The
rate of interest is falling throughout the
civilized world. This has been its course
for 80 years, and there is NO. reason to
suppose there will be any change. The
wealth of the world is increasing every
Year at most wonderful rate. Every
movement that tends to conserve en-
facilitate business is one more influence
that aids in the creation of wealth.
Never was the human intellect so busy
as now. SO ingenious, so well supported.
And with every year the pressure for
good investments increases. The sup
ply is not at all equal to the demand,
nor can it be. 1t is still possible to se-
cure investments that yield per cent.
interest, but they are not ordinarily
such as a trustee would select for his
benefciaries. A risk must be taken.
And even these opportunities are not
as numerous as they were few years
ago. The truth must be recognized that
we have no longer a frontier, our coun-
try is developed, all the best favored
spots are occupied, and there is no
longer necessity for good borrowers
10 pay per cent. for money.
From these conditions it seems that
a further fall in interest rates is in
evitable. Railroads that now borrow
money at 3h per cent. will be able to
borrow at before long. The stocks of
sound dividend corporations will rise
in price. But there will be one im-
portant result from this condition that
will affect our career as nation. AS
the pressure for good investments in
creases our capitalists will reach on:
for foreign countries just as England
has done. We have Cuba and South
America at our doors and we have the
carrying trade of the world before us.
1t is morally certain that our adventur-
GUS capitalists will reach out for. these
new fields. They will retard the de-
clining tendency of income for time.
but they cannot stop the inexorable law
Of commerce. A generation hence the
rates of interest now paid, which we
consider extraordinarily low, will seem
to our successors to be exceptionally
Inquirer.