The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1854-04-28
EFFECTS OF AN EUROPEAN WAR
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| III Ell . VI A4N hCieCi IIIAN "@hA
UPON AMERICAN SECURITIES.
The American Railroad Journal has wei
digcstcd article upon this subject, from which
we take the extracts the reader will find sub
Joined. The Journal perceiying that war is
certain and inevitable, and abiding particu.
larly to Railroad Stocks and Securities, says
From the intimate relations which subsist
between the United States and all the COM
mercial nations of Europe, each is, to 4 GER
tain degree, necessarily effected by the condi.
ton of the other. If one be prosperous, all
share in this prosperity. If the contrary be
the fact, all suffer. At the present day, no
nation, however Independent its action, and
however free from political and diplomatic
entanglemcnts, can escape the effect OF the
conduct or condition of its neighbour Com
mcrcaly, they belong to one community. 1t
paralysis strike particular branch OF in
dustry of one of the members, it falls upon 4
corresponding branch Of that of another
Should cotton spinning in Great Britain cease,
the production of the raw material in this
country would be largely curtaed. II Euro
pean nations become too poor to purchase
our staples, their previous value is the meas
ure of our loss. Our people, therefore, are
to be effected by war in the same manner
as those of France or England, only in 4 vast
ly less degree.
But the effect of war will extend beyond
the mere influence it excrts upon the price of
our staples. An opinion adverse to one of
our more important interests, may do us rs
much harm as would the loss of one of our
leading crops. Should war create 4 dis
trust as to the value of European securities,
and depress their market value, n similar SEN
timent, by necessary sympathy, would cross
the Atlantic, and exert Il similar effect upon
the securities of this country. There may be
no necessary reason for such coincidence, and
no satisfactory explanation for it. The price
of English consols has certainly nothing to
do with the value of Erie or New York Cen
trail stocks, yet the quotations of the latter
dance attendance upon the former with as
much certainty as the shadow does the sub
stance.
The first shock that European securities
received, was consequently followed by cor
responding decline of those of the United
States, in obedience to what seems to be an
unvarying law. We may always calculate II
certain result in this country to be due to n
real orr assumed condition of affairs in Europe.
But in the present case, there are other rca-
sons than those named, why this country
should feel the effects Of an European war.
For several years past our people have been
in the habit of borrowing large sums from
abroad for the prosecution of our public
,rn pI.p hn, f,rn tf,1 fhnk bo,
enabled our people to accomplish no small
part of the immense results that have been
achieved. If the whole, or II considerable
portion of this supply be cut off, the entire
burden Of the construction of our public
works will be thrown upon our own people
This fact must draw large sums from other
investments, and create Il general stringency,
the effect of which must be to reduce the
market value of all our securities.
The prospect of war has already produced
the results we have described. 1t has almost
entirely checked the flow of European capital
to this country-imposing. upon our own
people the burden Of providing themselves
the whole cost of our public works. A de.
pressed share and bond market is the neces.
sary result.
The degree of the depression of the market
value of the securities of this country will
depend, to very considerable extent, upon
the degree of the fluctuations in Europe
But as the causes that will produce, for n
time, similar results, are different, our own
market must recover its tone so soon rs it is
seen that the real value of our securities are
not impaired, and so soon as our people adapt
themselves to the altered state of affairs
The market now yields to sentiment Dor
rowcd from abroad, and to condition of
things in this country, which must work its
own cure. An European war certainly will
not diminish the earnings Of our railroads.
Thus far it has added largely to their earn
ings, by the increased price created for many
Of our more important staples, which is rapid.
ly drawing them from the interior to the
seaports. The internal trade of the country
was never so active MS at the present time
Our railroads were never before so success.
full. The earnings Of The entire investment
in the United States are at least 25 per cert
greater than at Il corresponding period the
past year. With an equal ease in the money
Market it may be confidently stated, that
quotations would at the present time rule
from five to ten per cent. higher than last
year. The Investment is worth such IN adj
vance were its value to be measured by the
amount Of income.