New Zealand Times. (PUBLISHED DAILY.) WEDNESDAY, JUNE 27, 1877.

New Zealand Times, Volume XXXII, Issue 5073, 27 June 1877, Page 2

New Zealand Times. (PUBLISHED DAILY.) WEDNESDAY, JUNE 27, 1877.

Judging from recent monetary articles in the London Times and other leading influential journals, corporate securities in the United States —railway securities especially—do not offer a very eligible field for the investment of capital. Very large sums of English money, however, appear to have been so invested, and with the most deplorable results to the investors. The Philadelphia Public Ledger in a recent issue informs its readers that twelve railways were shortly to be sold at auction, under foreclosure, some of them representing a very large amount of money. The losses will be enormous, and the ruin is not all on one side of the Atlantic, British as well as American investors suffering alike. One of the lines referred to, the Atlantic and Great Western Railway,- we are informed, "has been built almost entirely with English money, of 'which from £10,000,000 to £18,000,000 seems to have boon absorbed, and now the whole stock of the company could be bought in the market for less than £1,000,000." Nobody but a few lawyers and officials will get anything out of the fire, and this is only one sample of many which the English investors can point to. " Eighteen hundred millions sterling, or 38 per cent, of the capital invested in American railways, are wholly unproductive. For the last year only 165 out of 691 railways paid any dividends, and a very large proportion of these, viz., 103, paid comparatively small dividends, the aggregate paid by all being less than 4 per cent, on the capital stock." The Railway Age says:—" The bonded debt of our railway interest is as bad as its capital debt. More than 30 per cent, of all railway bonds outstanding have ' defaulted ' within a few years. About 814 millions of dollars more are thus rendered unproductive, though some part of tho sum may be recovered." The financial picture thus drawn is not a pleasant one to contemplate, especially for those who have put their money into these ventures.. The cause which has led to the investment of so much British capital in American railways is no doubt the difficulty of finding an outlet for money at Home, so as to bring in even a moderate rate of interest. This is felt especially by those of tho middle class not engaged in trade. In the English funds not more than about 3£ per cent, can usually be. obtained, and it therefore lakes several thousand pounds to produce an income sufficient for even very modest wants. American railways, with their higher rates of interest and brilliant prospectuses, have therefore not unnaturally caught the eyes of tho unwary, who for a short lime have received a liberal return for their outlay, and then have lost everything. It certainly seems strange that colonial securities, especially such as Australian and New Zealand Government debentures, have not been more largely appreciated as an investment by small capitalists in the old country, the rate of interest as compared with that of English Consols being much larger, and the security equally good. Then, again, municipalities and harbor boards have been raising loans at an average of 0 or 7 per cent., and offering security which cannot be doubted by those who are acquainted with the value of tho properties upon which the loans arc raised. More specutive, yet hardly less secure, are several of tho coal companies in this colony, which altogether offers opportunities for the safe investment of capital unequalled probably in any part of the world. Yet the class of people at Home to -which we have referred, have to a very small extent availed themselves of these outlets for their surplus funds. Throughout the, towns and cities of Great Britain and Ireland there is hardly a respectable banker or solicitor who has not from time to tithe money belonging to clients placed in his hands for investment, and lying idle there month after mon th, because n o eligible opportunity presents itself of getting anything like good interest. If some of these people would only turn their attention to New Zea-land,-the investors at Home and the borrower here would be alike benefited, and there would not be tho slightest likelihood of tho result being analogous -to that which has awaited those who have put their savings into American railways.