New-York tribune., 1912-08-11
RENTES STILL FALLING
Decline of French National Sc
curity Causes Anxiety.
QUOTED NOW AROUND 90
Still Ranks Above British Con
soils, Taking Account of
Difference of Yield.


Paris, Aug. 10.-Of all financial topics
that OF the decline of French rcntes is
the most discussed at this moment
Two opposite theories are held OH the
subject-the official and parliamentary
on the one hand, which is supported to
some extent by popular sentiment, and
on the other the practical views of
many financial experts.
The first theory is TO the effect that
the decline In value os the national
stock is due to aggressive speculation
undertaken by certain financial group
ings for profit taking This persistent
attack on the rcnte, ii is said. should
be met BY counterbalancing official
support 80 as TO maintain the 3 per
cents IL not at par. at all events nearly
at that figure.
Many business mon. taking an oppo-
site attitude. express the belief that If
the price Of French rentes has declined
this result is due to natural causes
ing is regarded as a sufficient explana-
tion % the continuous fall IN the quota
ton, for people are finding it increas
ingly necessary to place their capital
in investments that return a higher rate
Of interest. Government and municipal
loans are constantly issued at the rate
Of 4 and AZ per cent, and even higher
figure In some countries. Moreover.
there is the vast and increasing field or
industrial enterprise to absorb the ma
tional savings at profitable interest. for
the French people save s4O,00O,000 each
month.
Again. the recent loan issued by the
Finance Minister for the benefit or the
state railways in France was injurious
TO the national fund. because this ran
way loan was issued at per cent. ana
consequently numbers OF small holders
Of rentes. as we'll as great capitalists
sold their 3 per cent scrip in order to
buy the new state railway bonds.
Indeed. each new issue OF government
guaranteed stock Is followed by the ap-
pearance on the market Of conslderaole
blocks OF French 3 per cents. But the
rente enjoys certain advantages: II Is
q vast reservoir that holds about $4,000.
900 900. upon which reserve speculation
can always draw. Rentes can be nego-
tiated with the same facility as bank
note for all personal estate belonging
10 minors. and various other categories
Of personal assets must by law be IN
vested I'm the rente.
There is a great outcry because the
national fund has fallen TO 90 francs
and some centimes. but in comparison
with British consols at - and the Ger
man fund at about so, French national
stock shows To advantage. \ simple
rule of three will show that II 2i2 per
cent consols are quoted at % they
would be quoted at 90 IL their Yield
were 3 per cent. And French rentes
arc two points better than this
Undoubtedly the issue by the govern
ment Of the state railway loan has
created a strong new competitor for the
Old rentes. and the ministerial declara-
tIon that the national debt should be
free from taxation for all time has had
no effect IN checking its gradual depre-
citation on the Bourse.
Yet arbitrage operations throughout
the world are largely governed by the
state Of the French per cents. both
. in the making or undoing Of financial
arrangements The best French finan-
clers consider that the rente should
have due protection. but should not be
bolstered up artifcially at price that
is no longer consistent with present
values.
In 1897 the rente stood at les. In
1902 II had fallen 70 l02 and at present
IL quoted al about 90 II would, how
ever. he a disastrous mistake TO draw
inferences prejudicial to public credit
l fal