352 THE POPULAR SCIENCE MONTHLY. 



war. With trade restored to its normal channels, and a steady- 

 reduction in the national debt, have come a constant appreciation 

 in national securities. Ever-improving means of intercourse "by 

 steam and telegraph have brought about a better knowledge in 

 Europe of other leading American investments, and a competition 

 for them which makes the London demand in substantial sympa- 

 thy with that of New York. Meanwhile, too, European rates of 

 interest have fallen ; in 1887 Germany was able to convert her 

 3|'s into 3's ; last year Great Britain refunded a large portion of 

 her debt, which had borne 3 per cent, at 2f , with a liability for 

 but %\ after a certain term. Among the consequences which have 

 followed the diminution of income from secure European invest- 

 ments has been the invasion of the American industrial field by 

 European capital. This invasion, partly prompted by the fear of 

 continental war, in seeking to add profit to interest, must both 

 tend to increase commercial competition in America and contrib- 

 ute to further lower the rate of interest. A fact recently pre- 

 sented by Mr. M. A. Neymarck, the French economist, is worth 

 mentioning in this connection : when the existing redeemable 

 debts of France, of Paris, and of the French railway companies 

 are paid, the redemption prices will exceed the issue prices by 

 $1,300,000,000. 



While the progress of science, applied to developing the re- 

 sources of this country, has prodigiously increased its capital, the 

 ratio of it offered for safe investment has increased at the same 

 time. Savings-banks, trust companies, building associations, in- 

 surance companies diverse in type, afford, as it were, a thorough 

 system of conduits to bring every tiny rill of saved earnings to 

 some great reservoir of accumulation. Despite America's increase 

 of population, there are now, probably, fewer hoards of money in 

 its old stockings than ever. When tenders for city, county, State, 

 or railroad bonds are opened, it is usual to find that the majority 

 of competitors are trust companies, savings-banks, and other con- 

 cerns representing small investors, whose demand first and chiefly 

 is that their security shall be unquestionable. To this numerous 

 class a vitally important inquiry is, Are we to expect a rise or a 

 fall in the rate of interest ? In considering this question it will 

 be enough, in passing, to say that abnormal influences affecting 

 the rate of interest are the remote contingencies of foreign war or 

 civil commotion ; the normal influences are chiefly four : 



First, the comparative efficiency or reproductive power of 

 capital ; next, its security, depending on the character and ability 

 of those who handle it ; third, its supply and demand ; lastly, the 

 soundness of the currency, assuring the repayment of loans in un- 

 depreciated money. With respect to the first factor, a glance is 

 enough to show it to be two-sided. In the new South and new 



