THE THEORY OF INTEREST
Table 11
Rales of Interest Realized from Dates Named to Maturity *
Coin
Cur-
rency
Price ofGold*
Coin
Cur-
rency
Jan.
1870.
6.4
5.4
119.9
Jan.
1879.
3.7
4.5
July
1870..
, .
5.8
5.1
1125
Jan.
1880..
3.8
4.0
Jan.
1871..
6.0
5.3
110.8
Jan.
1881..
3.3
3.4
July
1871..
5.8
5.0
113.2
Jan.
1882..
3.0
3.5
Jan.
1872.
5.3
4.9
109.5
Jan.
1883..
2.9
3.3
July
1872..
5.6
5.0
113.9
Jan.
1884.
2.6
2.9
Jan.
1873.
5.7
5.1
111.9
May
1885..
„ _
2.7
2.7
July
1873..
5.4
5.0
115.3
Jan.
1886..
2.6
2.6
Jan.
1874.
5.0
5.0
110.3
Jan.
1887.
2.3
2.6
July
1874.
5.1
4.9
110.7
Mar.
1888..
2.3
2.9
Jan.
1875..
5.0
4.7
112.6
Jan.
1889..
2.2
2.6
July
1875..
5.1
4.4
117.0
May
1890..
2.1
2.6
Jan.
1876..
4.7
4.4
112.9
July
1891.
2.4
3.0
July
1876..
4.5
4.2
112.3
Jan.
1892.
2.6
3.1
Jan.
1877..
4.5
4.4
107.0
Mar.
1893..
2.8
3.1
July
1877.
4.4
4.3
105.4
Nov.
1894..
2.7
3.5
Jan.
1878..
5.0
4.6
102.8
Aug.
1895..
2.8
3.6
July
1878..
3.9
4.4
100.7
Aug.
1896..
3.2
4.3
’ Specie payments were resumed in 1879 and thenceforward the priceof gold was, of course, 100.
in the currency standard than in the coin standard, aswell as a higher rate in both standards than in previousyears. The contrast is that between 2.7 per cent and 3.5per cent in 1894, and between 3.2 per cent and 4.3 percent in 1896. The divergence of the two rates is explain-
3 This table has been obtained by the aid of the usual brokers’ bondtables. In the case of currency bonds, it was only necessary to deductaccrued interest (if any) from the quoted price and look in the tablefor the interest which corresponds to the price so found and the numberof years to maturity. This gives the rate in terms of “currency.” Inthe case of coin bonds, since the quotations are given in currency,it is necessary to divide the quoted price by the price of gold in orderto obtain their price in gold (i.e., “coin”), and then proceed as aboveindicated. We thus get the rate in terms of “coin.” The quotations ofprices of bonds and gold are the “opening” prices for the monthsnamed, and are taken from the Financial Review and its annual sum-mary, The Commercial and Financial Chronicle, 1895, the (New York) Bankers’ Magazine and the Bankers’ Almanac. After 1884, Januaryquotations were not always available.
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