The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-08-30
s rs Il GENE

alnW ana DNTIlhl. III bho v NAae 50 '
.hIe Indication Of the state OF the country's bust
n.ss II shows that our citizens are occupied In
,norinr money in other ways, and arc, there
,oro less inclined toward adventures on the
e,,,k Exchange. 1t may also be viewed rs an
Indication that under the excitement OF speou-
iatiys enthusiasm prices had been pushed up
higher than hey legitimately should have boon.
and that they arc now nearer their proper level.
what the truth Of the matter Is, time will DEM
ons,ratc. Wheat, in spite of ups and downs,
holds its own stoutly, and upon the prospect
that the farmers will be well paid for this years
crop. ii not for that OF next year, the shares Of
the railroad companies which are likely to profit
by carrying IL have risen in public estimation.
A feature Of the financial situation, which has
attracted little or no attention, and which 10 yet
NJ great significance, is the recent increase OF
the lawful money reserve OF our New York
banks. Formerly, at this season Of the year,
heavy drafts were always made on this point
for currency to send West for the moving Of the
rtops, and, since most OF this currency was legal
tender, tho withdrawal Of it depleted the banks
reserves and compelled them TO contract their
loans and discounts. In fact, the chief griev-
snce OF which our socallod currency retormers
complain, next to that OF the issue by the Gov
eminent Of paper money, Is the want Of elias
ticity, as they call 1t. in our circulation. where
Dy Int NAiAhl hhi NCsb Sbloi ~ NhAkNAst
cannot be supplied without producing a fnan.
cial stringency. This year. however, that de-
nand appears to DO lacking. The reserves Of our
banks, which on July 3. about the date when
the wheat harvest was fully In progress, were
sl92. $50, 500, rose last Saturday to $685.
765. 700. Hero we have, in the course OF two
months, not only no depletion Of the reserves,
but an increase in them Of $4,000, 900. This
may possibly DO explained by the Treasury dis
bursements, which since July / have been
SIS, 600. 900 in excess OF the Treasury receipts,
but the acknowledged revival OF all kinds OF
business in every part Of the country must have
been sufficient to absorb this sum. 1t can hard
" he doubted, therefore, that the supply Of cur
rency. elsewhere than in this city. and the abil-
ity to keep 1t, have of late years SO greatly in
creased that there Is not SO much dependence as
there was formerly on this city for the cur
rency needed at special seasons. The rural dis
tricts are, apparently, so much richer than they
were that they can dispense with the aid they
or:e had to seek every summer from this and
other financial centres.
4 further proof OF this abundance OF capital
throughout the country is tho reduction in tho
rate Of interest paid here for money, not only
for short periods but for terms Of years. On
bond and mortgage on city real estate 1 per
cent. has long been tho established rate. The
~ So NAtS ~ @'SV VI eAA Nlo " y
Brooklyn have both obtained premiums for their
recent 3a per cent. bonds. which reduces the
rate Of interest on them as an Investment to 3x
per cent. and less. First-class railroad bonds,
such as those Of the Pennsylvania and the
New York Central companies, bearing 4 per
cent. interest, also command q large premium.
The Lake Shore Railroad Company's new
s3 per cent. gold bonds sell above par.
and as soon as it comes into the market
the new gig per cent. issue Of tho New
York Central will do the same. Last week
the Pennsylvania Railroad Company, through
its auxiliary, the Pennsylvania Company. put
out $1,000, 900 of 3a per cent. bonds for which
l0s is asked. A number Of smaller 3a per cent.
railroad loans are also in tie market, none of
which are offered below par and most of which
are held at o premium.
Low as the income from these investments ap-
pears to US Americans, to the British capitalist
It would seem very attractive il 1t could be OBJ
hined nearer home. Recent London quotations
Cor arst-class securities are these:
consols 2s per cent. till 1908. ..........Il2k TO 1l2l
cousols 92 per cent. redeemabie 1905. 104La to 100
Metropolitan District uondon) 8 per
"Ne enA to 11<
Various Municipal Corporation 3 per
cent loanS. -. 101 TO III
London and Northwestern Railway de-
beniures, 8 per cent. 10 1no
London. Brighton, &C, Railway deben-
turea 4 per cent. 1853 to lbx
Great Western Railway debenturss,b
per cent to lSA
Metropolitan District Railway deben-
'ufe'' o per to 2ls
These are but a few specimens out of a great
number of quotations, which, altogether. I'LL
several pages of the London Economist. II
must be borne in mind, however. that the
debentures OF the British railway companies,
like their guaranteed shares, which have about
the same market value as the debentures, never
mature, and that the income from them il.
therefore. perpetual, SO that no allowance need
be made for the reimbursement to the purchaser
Of the premium above par, such as must DO
made on consols and on our high-priced railroad
bonds having o comparatively short term to
run. Hence a British investor, paying, say. $50
for . 4 per cent. railway debenture or guaran-
teed stock gets 2.33 per cent. forever, whereas
II he purchases. at los, the 2Lo per cent. consols
due In 1908. he must calculate upon the loss of
his s per cent. premium In 1905. and reckon his
income. In the meantime, at not much over .
per cent. Similar calculations have to DO made
for most American railroad bonds, though tho