River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1896-08-27
DECLINE IN INCOMES.
Returns from Investments Cut Down
Nearly One-Half.

The returns upon safe investments
have fallen so low as to become a Sc
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 "a
6 and Z per cent. interest fall due, and.
as they are abundantly secured. they
will be extended at a greatly reduced
rate of interest. Two such cases are
before Philadelphia investors at the
present time. The first mortgage 7
per cent. bonds of the North Pennsyl-
vania Railroad company. a perfectly
safe investment, are being extended at
4 per cent. The first mortgage per
cent. bonds of the Pennsylvania G.
New York Canal and Railroad company
are being replaced at 4h per cent.
Both these issues were put out 30 years
ago. and now the new holders have
their income cut down from 90 to 43
per cent. Other instances can readily
be found. Twenty years ago the con-
solidated mortgage 0 per cent. bonds
OF the Pennsylvania railroad sold at
par. within few months the company
had sold bonds secured by the same
mortgage at az per cent.
The condition is world wide. British
consols have lately sold up TO ia per
cent. They bear pa per cent. interest.
which is TO be reduced 10 2h per cent
in 1903, while the bonds are absolutely
payable 20 years thereafter. The rate
Of interest is falling throughout I'll 1
civilized world. This has been it's course
for 80 years. and there il no reason TO
suppose there will be any change. The
wealth of the world is increasing every
year at a most wonderful rate. Every
Invention that tends 10 conserve ener-
gy. to augment production and to ia
,ilitate business Is one more influence
that aids I'm the creation Of wealth.
Never was the human in elect so busy
as now, so ingenious, so wpl' supported.
And with every year the pressure for
good investments increases. The sup
ply is not at all equal to the demand.
Tor can IL be. II Is still possible 10 Sc
,ure Investments that yield per cent
interest but they are not ordinarily
such as a trustee would select for his
beneficiaries. A risk must be taken
And even these opportunities are not
as numerous as they were a few years
ago. The truth must he recognized
that we have no longer frontier. our
country is developed, all the best ia
Eored spots are occupied, anu there is
no longer a necessity for good borrow
srs to pay per cent. for money.
From these conditions IL seems tina.
L further fall in interest rates is in
svitable. Railroads that now borrow
money at ga per cent. will be able to
borrow at 3 before long. The stocks
Of sound dividend corporations Will rise
in price. But there will be one impor-
tant result from this condition tina.
will affect our career as a nation. AS
the pressure for good investments in
creases our capitalists will reach out
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 u.s.
II Is morally certain that our adven-
furious capitalists will reach out for
these new fields. They viii retard the
declining tendency of income for a
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-
sionally high.-Philadelph Inquirer.