New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-06-10
CHEAP CONSOLS.
Partisan Pleas about SociqLsr
Taration of Capital.
London. JunA :,

Il
during March. and while there was quick
covery. In sympathy with more buoyant A.
lean market. the interval sufficed for a REM
Of irresponsible attacks upon the governmar,n 4
impairing public credit until it was little bsa
than it was during the revolutionary cycIon.
1913 Partisanship defeats its own ends bv
aggeration and misleading comparisons. Com,
fell to so during that stormy period. wbs,.
they have not gone below "a this week, and L
measuring stick has been altered so as 10 fa,e
hasty deductions. Consols drawing "a Der -
interest are not the same as per cents, and
lowest quotation of the week would be eou.I
1O1 at the old rate of interest Compari,
with 1S48 are worthless when the scales
graduated differently. When full aHowapc.
made for the lower rate of interest the prars
security is much higher to-day than il was .
the English BLACK Friday of 1865 or the das,
est period of 1S4S, when the bank act had bA
temporarily suspended and two Pararaents,E
committees were investigating the causes Il
commercial distress. Partisanship was sur
GENTLY envenomed sixty years ago. when hna,
ciaI disasters were attributed to defects in 81
Robert Peers financial legislation and 10 mis-
management Of the Bank of England; but II
even more bitter to-day when the Liberal gov,
eminent Is held responsible for widespread d,
trust of socialistic projects.
Political assailants Of the Ministry have bss.
reinforced by financiers SO eminent as LoHs
Rothschild and Lord Avebury. who attribute II I
fall in consols and the shrinkage in values of 4
classes of securities to dread of socialism. Il I
not by any means clear why a governing
which is heavily reducing the national debt q,
cutting down current expenditures should d
dstrusted on financial grounds. II was d
Unionist government that increased enormous
the funded debt by the costs Of the BOer wi
and the operation of the Irish Land PurchaaY
act, and enlarged current expenditures by na7f
and military ornaments on a tremendous szs
and local taxation by bringing the voluntz7
schools under the rates. The Liberal MinistT
has stood for retrenchment and has not adoptalH
any policy that increases the outlay Of Ia
spending services or involves fresh issues
consols. II the Chancellor Of the Exchequer Ia
earmarked a portion OF another years sUrplzl
as a reserve for starting an old age penSirs
fund the government is not vet definitely con
mltted to this measure II the small holdinlA
bill. introduced by Mr.. Harcourt. promotes ten
anCies under local authorities rather than pur.
chase OF land for OCCupiers. IL is not lard
measure requiring extensive grants from III
Treasury and is not sufficiently sOCialistc a
described as predatory legislation exists rnains
in the Imagination OF partisans. Each party
playing with socialism for political effect. an.
IT is dangerous game; but neither the Liberal
nor the Unfonists have committed thernselva
unequivocaI!y to any line OF action that can
considered permanently nsettling, much les.
revolutionary
One has merely 70 read few chapters 4
the bank charter act to be impressed VIII
in 1S4s and at the present time. Consols han
been cheap in each instance but one was Il
period OF commercial distress and industrI
staguation when confidence was lacking for "A
vestments; whereas the other is a time OF phs
nomenal industrial activity. when capital IS ri
quired in large masses at home and abroad a-l
commands higher rates than 21s per cent tn
real analogy between the two situations lies
distrust OF the financial system Of the day
Sixty years ago many fnanciers as distinguish
and experienced as Lord Rothschild and Lori
Avebury are to-day We're convinced that "a
bank charter act OF 1874 was operating uaI
scientifically and mischievously and that d.
rangements OF commercial credit and renewal
of monetary pressure were 10 be expected "A
long as the system remained unchanged. Thgs
IS the same lack of faith in the existing ori-E
of free trade Lord ROthschild and Lord Ave-
bury may not share this feeling OF skepticlsz
but they know that il is widespread and steadr i
increasing. The approximations and gloomy 1ors.
casts of experts may be exaggerated as thsi
were then, but the effect IS distinctly uusettirE
The government OF the day is loyalty supportlz,
the free trade system precisely as minister
were defending the bank charter in Sir RobE
Peers time; but the defence Of the establish
order. while resolute and effective. does not dis
pei doubt respecting the permanence OF exist-s
conditions. How can il be otherwise when u
government is straining the resources OF dEsa
taxation in the effort to prove that social y
forms can be financed under free trade?
All experts agree that while there has besat
shrinkage ranging from 20 10 40 per cent in Hs
class securities during the last decade. and
much larger reduction IN the values Of mini;
stocks. there is lack or capital for new unds
takings required by Industrial progress. Muna
pal borrowing has been on an unprecedsn'A
scale. and colonial investments have been h.sh'
remunerative; but the scarcity of money ~
home enterprises cannot be adequately expa1a
on these grounds Capital available for inves.
ment disappears as mysteriouSly as the goa
shipments from South Africa which are receives
in England but cannot be kept in the coun'n
The Cobdenites used TO say that one of the ca-
advantages OF their system was the tncrsaS
mobility which was impaired 10 money. CapI
was drawn into London for reinvestment -
used in England II there was a demand fa
or sent abroad If IL could earn better rata'D
What is now said is that foreign caplai
longer comes into the country for reinvesunS
In large masses. and the reason assigned fo'
withdrawal is that the excessive death and y
cession duties brighten investors and TO-
them 10 put il where the officials Of SonSS
House will be unable TO put their hands ug'.
Investments abroad are naturally favored W.