The weekly Portage sentinel. [volume] (Ravenna, Ohio) 1854-1861, 1857-09-24
BY HART 4 sOMERvILLE.
Depreciation of Ohio Bonds


Depreciation of Ohio Bonds
Ohio then has issued over $l4 ,OoO, 900 of
bonds, OF Hyou please prornissory notes to
be paid in years to come. These bonds have
been long ago c5shed. The State has bad
the money on every one ofthpm, and wiihit
cbuilther canals, national railroad, &c The
bonds are private PROPERTY aud are held by
capitalists, and snail smount by certain
,0uGksn Ohio, a much larger amount is
owned by Eastern capitalists. and d sill
greater amount ia held in Euglond. In
course of time sock gambling 1epreciates a
large,smount ofrailroad securities, the money
market gets more and more stringent. and
finally failures take place, panic in Wall
Street ensues, Stocks are plenty but mon.
ey scarce. The interest on the Ohio bonds
ssix per cent, per annum Money com
mands one, two and thr..a per cent. per
Eiuntn In Wall street Men who have
money can do better than to loan it fer six
per cent, or what is the same thing, buy
six per cent bonds. Those who have no
money, cannot buy, Of course. Those who
have fuiled or are in danger of failing, must
nevertheless sell at some price what stock
they have, and actually sell Ohio stocks for
ninety-three sents on the dollar.
~. Any one can see that the seller has lost
the difference between what he realized and
the real value of the stocks, but in the
name of mathematics, what has the State of
FOgfio lost! What has Gov. Chase done!-
Wfsht those bonds become due in 1886,
Ohio Will pay them, and in the mean time
twill pay the interest as it becomes due. 1t
= ,b.,t h,. al, II,
ct of the bonds, in the meantime, so far as
the payment is concerned. -..a .st -.
g. To illustrate this new doctrine in finance
and political economy, we will suppose The
t6sitdr ofttie Sentinel, gives his note for $1,000,
due in twenty years, at the expiration five
or ten years, the holder sells the note for
$500. How much has Mr.. Hart lost by
tNch sale? He says $500. A school boy
eight years old would say the maker Of the
mote lost nothing or would get fogged for
his stupidity vi mocrot. ~ u T. Il,
We can at present, only offer word in
reply TO the foregoing. The two arguments
of the Democrat appear to be, l. That il
makes no difference whether the credit of
Ohio is below orabove par, aud 2, that Ohio
has lost nothing by the depreciation Of her
bonds. The D mCcrd7, in its argument, ad-
lmits that Ohio bonds haze deprecated, and
that they have been sold for 90 cents on
the dollar. Now, we hoh thHt the credit Of
"a State is as important to its financial pros.
perity ss the credit of an individual is impor-
;tant his financial prosperity, and that an
administration which by its misinanagement
,depreciates the credit of Ohio in the none
tary world, is unworthy of support. Dare
our opponents attempt to deny this prdpo
'sition! t~a
We hold, in the second place, that the
State hes lost an amount of money equal to
1he depreciation of het bonds. The S2.5o0,-
900 worth of bonds, which we're sold in Nv
York few days ago at ninety.three cents on
the. e.dollar, were a aeio Issue of bonds-h d
neges beewin the hands oi a third person as
owner, but gere sold tor th4 bsneG q Tie Size
and the State did sttStaiqthc soss, ,rrrsnt z
-, The Democrat has supposed q case; We
will .dotho same, Suppose thal Han, Her.
rick & Co. give their noss FOR $1,000 pay,
able one year after date. When .;hcjr aote
falls due they are unablsto 'haeetib and the
creditor will not allow tlletn to repew it.
They are compelled to raise the money al
whatever sacrifice. They issue a ne,O prom
isary note for S 900 payable one year altel
date This note they take to Robinson, Kin&
& Co., and sell it for $500, end with tIepFo
tssds they are enabled to pay only ore .daJ
their Indebtedness. Is it not evident tha,
Hall, Herrick e. Co. have lost $500 by the
transucfisn' Certainty, And this simps
in consequence ofthe depreciation of thei
bonds in the money market. (,
Now, this,is precisely the position OF the
State'of Ohio. Some twenty years ago, Ohi'
borrowed money to build her canals, and is
sued bonds payable in certain number o
years thereafter. These bonds, to th,
amount Of about three milian dollars, .fel
due last year. The State was compelled t
pay them, and was unwilling 10 raise tn
money by taxation. For the purpose o
meeting the payment, the State issued new
bonds payable in 1856, and with these.bond
psat asto ths money market III Aeso York an
gold them for aehat she coald get, and apple
the proceeds to the payment Of our debt.7
These bonds, as we .ee seen, were opl.
worth ninety.three c>nts on the dollar Will
we are paying six per cent! interest on ou