THE GLUT OF MONEY FOR INVESTMENT.
CA N nobody suggest a stiff bit of work for English Capitalists to do ? They are standing idle iu heaps, and they do not like it at all. According to the Stuffs/ of the 17th inst., a sum of money estimated at £200,000,000, or say nearly three years' revenue, is lying waiting for the profitable investment which it is so difficult to find ; and although that figure may be an ex- aggeration—we see no reason for thinking so—it is certain that the total sum available for new forms of enterprise must be very large. Bad as the times have been, and large as the ex- penditure of the late Government was, Englishmen made and saved in the five lean years a great deal of money, which was not, as it often is, flung away in preposterous speculations. No State plundered us much, no great amount of money was wasted on unreal discoveries, and there was a great deal of more or less stringent economy. The number of persons who, panic-struck by the decline of trade, or the difficulty of collecting rents for large farms, commenced retrenching, was very great ; they had often very good incomes, and men who once retrench usually do it with a will. It is so uncomfortable a process, that they want to see something solid—a good-sized bank balance, for example—on the other side of the account. If you are to retrench at all, especially for a few years only, you may as well :retrench to purpose, discharge everybody, let your "place," and live on 2500 a year, like a clergyman. Then, of course, though many trades suffered heavily, and some branches of commerce became unproductive, a great deal of business con- tinued to be done and large accumulations to result. The dealer in East India produce might be losing money, and Lord Greenshire might be cramped, and Mr. Bondstreet, the jeweller, bought nothing on speculation ; but we do not suppose that Messrs. Bass brewed less, or that the ordinary produc- tion of ordinary luxuries fell off at all heavily. Money was made and was put away, always in very safe places, and now that prosperity is reviving, as the Revenue returns begin to show, the state of affairs is very much in this wise. A great deal of money has been made, and a great deal more is making, and all the safe places for putting it away are getting choked. The "old stockings" and " teapots " are all full. Consols are very high ; railway debentures are very high; India stocks are inexplicably high, unless buyers think that they are practically guaranteed ; colonial bonds are high, though not so high as they would be, if there were not a good deal of latent distrust, and a good deal of muddling about the right of paying off ; and French Rente is at a figure which, sure as France may be to pay her dividends, is, considering the immense fluctuations which have occurred and may occur in the capital value of that security, preposterously high. The French rentier is sure his dividends will be paid, because the vote, the bayonet, and the bond are all in the same hand ; but he is not sure that Threes to-day at 85 may not be next week at 70. Capital, in fact, has been invested in the sounder Securities till they are too dear even for very cautious men, and new accumu- lations are held loosely, their owners looking out eagerly for investments which look sound, and will, at all events, yield the 4 per cent which is just now unprocurable. There is not, so far as we know, a clear and permanent 4 per cent. in the market. There must be very much money waiting investment, even if there is not 2:100,000,000, and the fine old way of investing it —the purchase of land—is, for the moment, discredited. There never was such a time for men with large means, really large means, to form large landed estates. In the Southern and Eastern Counties, and, indeed, everywhere throughout England, where farms are large and no great city is immediately at hand, land is going, estate agents say, "for a song," that is, it is to be purchased for ready-money at a reduction of twenty per cent. on normal prices. Utterly disbelieving that in this thickly- populated country, with its fixed social prejudices, land will permanently fall, we should have thought that form of invest- ment attractive ; but people read American statistics, they do not know that the " enfranchisement of the soil " will add ten years' purchase to its saleable value, and they shrink back and wait, as they say, to see what the reduction of rent will ulti-
mately be. They keep their spare money and trust Exchequer Bills, without trusting the future of the country. They are wrong, for notwithstanding all that may be done, your grandson with 10,000 acres will be a very important and very wealthy person, but they think they are right.
Under these circumstances, if they continue, a burst of specu- lation is ultimately a certainty, and it depends a good deal upon accident whether the speculation is sound. If a good. wide groove for the employment of capital is discerned in reasonable time, the enterprise will be legitimate; but if not, much money will yet in no long time be eagerly and triumphantly chucked into the sea. No doubt, a great many people have lost a great deal, and foreign loans are discredited, and a ship railway across Honduras would not attract again, and everybody has grown very much wiser about his cash. But we suspect, for all that, the money is beginning, as the children say, to burn holes in men's pockets ; that the spirit of caution is wearing out, as it periodically does, and that speculators are getting, like pike in an east wind, too hungry to see hooks. A good many businesses are becoming " Limited " very easily, and one distrusts people who sell good businesses There is a sort of eagerness to believe pleasant things about large profits coming to Banks. Reports about South Indian gold-reefs seem to be trusted very readily, and there is an in- creasing vagueness in the messages as to the probable produc- tion of the metal to the ton of rock crushed, which, to those who only look on, is not without significance. Everything may be all right. South India may be going to yield gold in greater pro- portion to wages than Australia, for anything we know, though we adhere to our permanent view that gold is the least profit-giving of the metals ; but if the tide of speculation were not rising, there would be a good deal more doubt about these rose-coloured prophecies than there is. Every Tea Company did not prosper because the Assam Tea Company did, and we do not believe iu the equality of all gold-bearing rocks in Malabar. The thermometer of speculation is rising, and nothing would sur- prise us less than the appearance of some quite new industry, a rumour of fabulous profits, a wild rush, and the disappearance or transfer of a great deal of good money, wasted upon projects almost demonstrably absurd. It is time for honest pro- jectors to bestir themselves, and see if there is not a big bit of honest work somewhere waiting to be done. France, for example, is very rich—too rich—sending millions to India to subscribe to Rupee Loans, and ready to give millions for any reasonable project. Has France enough canals ? Canals pay, and canals are wanted even when rail- ways have been made, and France does not abound in navigable rivers. Would it not pay to lend money for wheat-culture in the Far West and Canada, with the wheat to be grown as security ? Is there not 50 per cent. to be had from fruit-culture on the shores of the Mediterranean ? Shrewd Yankees make that out of orange-gardens, and—we note, for the benefit of Mincing Lane—arc just going heavily into tea-growing in Georgia. There is fortune in that, if Congress will leave the Chinese labourers alone. Is it certain that great Com- panies, working on the great scale, could make nothing of that immense and hitherto heart-breaking industry, the conversion of cane-juice and beet into saleable white sugar ? We should have thought it conceivable, with the malt duties taken off, that capital, and capital in considerable masses, would flow into the provision of materials for brewing, not necessarily malted barley. Science, we hear, is looking out in that direction, after the method of English Science, which is never without a reminiscence of alchemy, and is growing hopeful, and is muttering strange things. We do not expect to like potato-beer, but then we have not that first of Heaven's physical gifts, the clam ilia MC880110)1 ; and the masses of mankind may like beer from potatoes, or rice, or rye, or anything else, if it is only cheap enough. There must be a large dividend for a large capital in the work of supplementing malt, and making beer cheap enough for universal mankind to buy. Has Science said its last word about building materials ? There are entire classes who would build if only a cheap material could be found, and with the immense development to which the power of crushing things to- '" gether has now reached, there ought to be a cheap material procur- able. We can crush carbon into diamond, why not sea-sand or com- mon mud into building material ? There is a good deal of sea- sand in the world. There should be forms of insurance as profitable as guaranteeing employers against their clerks bolting, a business that yields splendidly ; and now is the
time to bring them forward. We insure against things, furni- ture, for instance, being burnt by fire; is it impossible to use the same precaution against their wearing out ? That may be regarded as a joke, but the principle has been applied to carriages and many forms of machinery ; and the follow- ing is no joke. It must be possible and practicable to insure investments themselves, to expand the principle upon which the " Trusts " of the Stock Exchange are built, and within broad margins to guarantee a man for a premium against his investments turning out total losses. The average of picked investments do not fail, and the insurance of them cannot be mathematically impossible, any more than in- surance against accident to the body. That business should be wide enough. There has been far too much timidity, too, in -considering, as many able men have considered, the possibility of insurance against sickness, not for the whole of life, but for separate decades of years. Malingerers are adroit, but malingering is not an unmanageable offence. The great Benefit Societies are not ruined by it, nor would a sufficiently determined office be, particularly if, instead of refusing to pay, in cases of suspicion, it only returned premiums received, deducting a heavy fine. The malingerer would not risk the penalties of perjury for that, but would eat up his saved money just repaid, and the office would dare to be stern. Above all, for we do not want to be, helping the projectors, who must be far more competent than ourselves, is there not a new and great business to be done in steam or compressed-air tramways, as feeders to railways ? In other words, are there not wide districts in this country where it would pay to transport heavy goods on a very narrow line of rails at very low speeds—as low, possibly, as the speed -on a canal—and passengers at eight miles an hour ? We shall have the engineers against us, with their pas- sion for perfect work, and level gradients, and expensive structures ; but if permission to lease land, instead of buying it, could be given by a local authority—say the Highways Board, so superseding the costly Parliamentary authority—and the notion of high speeds were definitively given up, cheap railways must be possible, and over one-half of England they are urgently required. Rails are cheap, land is cheap, and the 'keep of horses is dear, while communication with the railway depot is the farmer's first necessity. -
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