Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-09-08
BERLIN STOCK LETTER
STEADY DECLINE IN GERMAN
AND PRUssIAN coNsoLs.

Special Cablegram to The Star
BERLIN, September Side by side with
the fall in English consols there has also
been steady decline in German and Prus-
sian consols, until threes reached 81 30. The
loss involved will be evident from the fact
that in 1905 threes averaged 90.oS: in 1902.
after the effects of the industrial collapse
had been overcome 81. IS: and In 1897, or
ten years ago. 1855. Three aud-a- half per
cent stock is in similar plight. Starting
at over 1895 In 1897. the 31s per cents aver
aged l02 in 1902, and today stand at 92.5.
In other words. investments in these two
classes Of securities have entailed nominal
losses ranging from 10 to over IL per cent
during the last ten years
Capital invested In 3 per cents in 1so3 has
been diminished by one-sixth. The 81 per
cent stock of other German states besides
Prussia shows similar decline. and where
3 per cents have been issued they are
quoted today at -. 1t seems at first sight
legitimate to ascribe this general decline
10 the issue OF per cent state securities
put when the recently issued German and
Prussian per cent treasury bonds have
laiied Tor weeks to find purchasers at par
ana today fell below that level, 1t is evil
ueht that other causes for the deteriora-
ton must be sought
The increasing issue of frst-class stock
a u
3ls per cent constitutes it is true. a ma
terial factor In the process Of decline Thus
the recent issue OF Az per cent German
mortgage bank stock at only 101 consd-
erapiy disturbed the market. An even
more unfavorable effect. from the point of
view or the consols market, has been pro-
duced by the prospective issue of a Az
per cent municipal loan which represents
highest interest hitherto borne by stock of
this class.
An Abnormal Situation.
The necessity Of departing from the
per cent type Of loan, moreover, sufficiently
indicates the abnormal character of the
financial situation. The extent to which
German capital Is being withdrawn from
the home market may be gagged by the
fact that since 1897 foreign stock to the
normal value of over s. 600 OOO, 600 has been
admitted to quotation in this country.
large proportion Of the capital thus at
tracted has been absorbed by America
Russia and Hungary In view OF the in
JUDGEMENTS offered by these Investments II
Is scarcely wonderful that even first-class
securities should go begging at 4 per cent.
Prussian consols are regarded "a an in
vestment of the highest security, and In
the absence Of foreign or domestic alarms
1t is felt to be urgently necessary to dis
cover some remedy for the war prices"
which prevail today. The secretary OF
Stengel, appears to think that no remedy
Is possible until a reaction In the present
era of industrial prosperity has set in
But 1t would seem to be more desirable to
induce German capital gradually to aban-
don its foreign investments than to with
draw Its support from German industry
Above all, 1t Is suggested that the feverish
activity Of municipalities should be re-
stricted. by legislation If need be, until
the financial balance has been restored
furthermore, the saving banks, with their
deposits OF over 500. 900, 600 ought to be
required to invest a larger proportion Of
their capital In cOnsoS. But 1t Is felt that
the fluctuations in ccnsols would affect the
small saver even more appreciably than
other classes Of investors.
Imperial Debt Doubled.
1t is safe to say that no measures will
bring about a permanent improvement so
long as the German imperial debt which
has been nearly doubled during the last
ten years continues to increase 1t its
present rate. and long as the business
Of the empire is conducted with an annual
deficit. More or less heroic measures of
reform have been tried. but so far they
have failed. and. in view of the desire of
the separate states to retain the unimpaired
enjoyment OF sources OF revenue like the
income tax. the financial outlook Of the
empire necessarily gives rise to manifold
anxiet!es Until this government by de-
has been remedfed, there can be no amortt-
cation of debt and no permanent improve
ment In the anomalous position Of German
consols, which will continue to react, d.
rectly and indirectly. upon the financial
situation both at home and abroad.
The preliminary draft OF the navy esti-
mates for the financial year 1908 includes
first lnstallments for two new battleships
and one new cruiser, all three of which are
to be Of the largest type. The five battle
ships of the 1920 ton Deutschland class
will have been completed for sea by next
year. At present only the Deutschland and
the Pommern are in commission; the Han
mover. it Is hoped, viii. be ready in the
autumn.
The two remaining battleships of this
class are the Schlesien and the Schloswig-
Holstein which. it Is hoped will be COM
pleted next year. 1t is hoped. by increas-
ing the rate of construction, the first full
division Of the new batteships Of 1S,GO0 tons
more will be adoat by the year 1910,
when also the last Of the thirty-eight
battleships contemplated by the navy law
of 1900 will be laid down.
The estimates for 1908 will also include
first installment for new large cruiser OF
the improved type which will be the seven
teenth out Of the twenty large cruisers con-
templated by the navy law. The remaining
three large cruisers will be laid down in
1909. 1911 and 1912, while in 1910 the work
of superseding in rotation the obsolescent
cruisers will be begun. In addition to a
first installment for the new or sixteenth
large cruiser F. which has been laid