The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-05-29
THE DECLINE IN INCOMES.
Return From Investments Cut Down
Nearly One-HnIf

Return From Investments Cut Down
Nearly One-HaIf.
The returns upon safe investments
have fallen SO low as to become a seri-
Gus 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 at 6
and 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 per
cent. bonds of the North Pennsylva-
mia railroad company a perfectly safe
investment, are being extended at per
cent. The first mortgage per cent.
bonds of the Pennsylvania & New
York Canal & Railroad company are
being replaced at 4 12per cent. Both
these issues were put out thirty years
ago and now the new holders have
their interest cut down from 43 to 80
per cent. Other instances can readily
be found. Twenty years ago the con-
solidated mortgage per cent. bonds
of the Pennsylvania railroad sold at
par; within a few months the COM
pany has sold bonds secured by the
same mortgage ct 31a per cent.
This condition is world wide. Brit
ish consols have lately sold up to ia
per cent. They bear "a per cent inter
est, which is to be reduced to 212 per
cent in 1903, while the bonds are abso-
lutely payable twenty years thereafter.
The rate of interest is falling through
out the civilized world This has been
it's course for thirty 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 invention that
tends TO conserve energy, to augment
production and to facilitate business is
one more influence that aids in the Gre
alton of wealth. Never was the human
intellect so busy as now so ingenious,
so we'll supported. And with every
year the pressure for good investments
increases. The supply is not at all
equal to the demand, nor can it be. It
is still possible to secure investments
that yield G 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 be recognized that we have no
longer a frontier, our country is devel-
oped, all the best favored spots are oc-
cupied, and there is no longer neceS-
sity for good borrowers to 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 31s per cent. will be able
to borrow at before long. The stocks
of sound dividend corporations will rise
in price But there will be no inn
portant result from this condition that
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
us. II is morally certain that our
adventurous capitalists will reach out
for these new fields. They will retard
the declining tendency of income for
time, but they cannot stop the mex
orable law of commerce. A genera
ton hence the rates of interest now
paid, which we consider extraordinarily
low, Will seem to our successors to be
exceptionally high.-Philadelphia In
quirer.