Mr. Andrews to Mr. Fish.
Stockholm, August 14, 1875. (Received Sept. 2.)
Sir: In a report which I had the honor to send with my number 110, of June 10, 1871,* it was shown that the public debt of Sweden was then 119,000,000 “riksdaler,” (now called kronor,) or $31,000,000, and that it was incurred almost exclusively for railroads which the state owned. At the end of 1874 the debt amounted to 130,477,920 kronor, or $34,794,000; and it is but fair to say that the state railways, for which the loans were made, comprise a capital equal to the indebtedness, and which yields a steady income of 5 per cent. Sweden’s 5 per cent. obligations have for some years been firm at 102 and 103 per cent., and her 4½ per cent. obligations at 99, 99¼, and 99½. Mr. Dudley Baxter, in his latest article on European loans, justly places Sweden, in respect to credit, in the first class of loan-taking states. Her last loan for railways, to an amount of 18,000,000 kronor, was made at Frankfort at 4½ per cent. interest, for a period not exceeding sixty years, and at a price for bonds of 95½ per cent., which was perhaps favorable, considering that the loan was made at a time when there were apprehensions of another war between Germany and France. Owing to the budget containing large estimates for building railways, there has sometimes appeared to be a deficit in the Swedish finances, when actually there has been a surplus of several millions.
Ever since the time of Charles XII, the business of the public-debt office has been under the sole charge of deputies annually chosen by the Riksdag. In 1813 Sweden was engaged on the side of the allies in the war against France, or rather against Napoleon, while Norway, acting with Denmark, was engaged on the side of Napoleon. At that time the issue of paper money was so extensive in all of the Scandinavian kingdoms that they made a partial repudiation. Norway resumed the payment of her current notes by paying two and one-twelfth dollars in coin for one hundred dollars of notes. Denmark redeemed hers by paying at the rate of ten and five-twelfths per cent., and Sweden hers by paying at the rate of 37½ per cent.†
The public debt of Norway at the end of 1873 was 35,240,800 kronor, ($9,397,000,) and was contracted for railways which the state owns. It is therefore merely nominal, as is the case with Sweden’s. Only about a quarter part of the loan of last year for railways has been availed of.
It was negotiated at a price for the bonds of 97½per cent. with interest at 4½ per cent. While the credit of Sweden and Norway, as shown above, is good, it would seem that, considering their pre-eminent political tranquillity and their growing wealth, loans for purely productive purposes and for moderate amounts ought to be negotiated on even better terms than what has been stated.
I am, &c.,