El Paso herald. (El Paso, Tex.) 1901-1931, 1918-09-06
MONEY WILL PROBABLY BE EASIER,
NOT TIGHTER. AFTER WAR THAN NOW

ALREADY there is concern among holders OF seeu
n ties the status Of those securities after the val
They wonder their stocks viii be when the ngnuns
stops when industries must be rnquished entirely OF
converted into peace industries and when RECONSTRUCTION
starts.
II is assumed there will be an enormous demand for
money and that it will be hard get, causing high IN
terest rates There those who fear rush OF european
nations incur obligations TO finance the WoIk q re
construction in devastated and to refund old oohga
tious Under such conditions it felt BY many that gov
ernmeutaI and municipal borrowing viii not leave enough
money for industrial and commercial needs Thus It VIII
hard to borrow money to carry on tne % -
make such changes might be necessary to convert them
from to peacetime requirements
This is question which has been little discussed and
which touches purses Of large number OF INVESTORS
while the assumption seems reasonable that the war
will Be followed BY pronounced money Sringency and ao-
or high interest rates experience has been TO the con-
trsrv The Wollman Review New York financial letter,
presents historical data tending to show that aItI
there has always been excess of money and resultant
decline in interest rates
Napoeons war, ending with his downfall at Waterloo,
was one Of the most destructive in history Governmental
borrowing was on enormous SCALE but, despite ms
money became easy after the wal British consos three
s1t rose from so TO 90 during the period from 1915 to
1924 while the investment yield this security declined
from five percent less than three and onehiTo percent
During that period Great Britain refunded large portions
Of the debt at reduced rates Of interest.
n Isoed on the desructveness past because IS
high feature Of the present war and tght money 1t
comes will be the result Of reconstruction demands
More than s4OOQ9O0OOo worth Of wealth was destroyed
during the Franco-Prussian war 1t IS estimated But the
average price Of British consos was only about two peLoe'
lower in 1871 than in 1863 The discount rate Of the Bank
of England declined from 40 percent in 1872 to 261 per
cent in 1876.
have placed the loss at In 1865, shortly BE-
fore the close Of the war the government was paying SIX
percent interest on long bonds Temporary loans
called for an interest rate IN excess Of seven percent
ut bv 1868 the money had declined to 21o percent
The reason for the decline in the interest rate after
Sc bsbIv TO be found in the fact that the demand for
cspital is not instant and imperative. During war tine IS
an essential element Governments cannot wait on mun-
tiops Expense is no object With the coming Of peace
nations can take their time within reasonable limits ABOUT
he work Of reconstruction They refund their ooga-
fons when the interest rate becomes more attractive
Moreover wien peace comes great amount Of capital
now flowing into channels, viii be available tor peace
uses and this viii augmented, never before, BY the
great fund built up by individual savings The amount OF
actual savings $1,000 banks in the United States IS more
than s., 100000. -.
The LIQUID supply Of capital will increase partly from
the habit Of thrift engendeed by the partly because
Of smaller requirements of those concerns which have been