The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1864-07-13
Government, Securities .. IN Investment.

There IS one view Of investments IN
Government stocks which has not been
generally taken IT taken by shrewd
capitalists and spectators. IT has not
been generally considered by the people.
1t is tbs: When, AFTER = long suspen-
sion, specie payments are resumed ~.
stocks and all prices Immediately anu
largely decline. but Government ssocAs
DO Nor materially decline. TINS lact VIC
assert ON the ground Of historicai expe
rience 1t is true that, in the War OF
lsi2-l5. Government stocks fell. at one
time. TO 20; but most OF the banks were
then suspended or bankrupt. and there
was comparatively little currency inthe
country to buy with, But suppose the
gold value of government. stocks were
this day 20 fthe lowest they were ever
till now sold att. the market value
a. the present rate Of gold would DC
13a, while in fact tile stocks are seiiinS
below los, Surprising. then, that the
market price Of Government securities
were, by the resumption of specie pay
ments, to go down to 20 in July, the
decline would be 81 on 100. equivaient
To 81 per cent while the decline on
railroad stock would be nearly or quito
equal to the whole present difference be-
tween gold and paper. a common
railroad stock. selling now Mt 100, wouin
decline To 80. or, in the best supposaiie
case, to 90, This is illustrated by the his
tory of every suspension of specie pay
ments we have had: and there are many
business men who will recollect what the
prices Of produce stocks, and all saiabie
commodities were after the commerclaI
revulsions of lSS. and 1899 ~. In 1871,
A. and '43, prices were reduced 10
degree now scarcely credible but
Government Stocks did not fall materi-
allv. On the contrary, 1t Is settieu
principle, dcduced from all experience
in England and this country, that GoV-
ernment funds do not fuctuatc TO the
same extent as other kinds of property.
There is a good reason for it. The time,
rate of interest, and security, are all
fixed aud permanent When man
buys a United States bond of 81 900, ne
knows all about it, and everything which
can effect it, he knows that he Is TO re-
ceive so much interest; that is TO De
paid and that in gold at the end of so
many years; and that the whole power
and resources of the nation, and that
national faith which was never violated,
are pledged, that in any contingency, it
shall be paid Hence, there is no
reason why it should huctuate to any
considerable extent. 1t is gold bond
from the beginning, paying interest in
gold now, and to be paid in gold when
due. There may be some variations In
the market price, owing to the greater
or less bulk of the entire currency, but
there can be none in the intrinsic value;
and hence it is that historically, the
fluctuations i'm the value of Government
stocks have been comparatively small
In all the recent commercial fluctuations
of England Tin some of which there has
been n complete prostration of all other
property }, the variation in British con
soils has not been over ten per cent.
This cannot he said of any other kind
of stock OF railway and bank stocks,
the great variations and at times won
derful depreciations are notorious. Sud
den commercial revulsions have reduced
those stocks to one-half their price.
Suppose, then, that with gold say mt 60
now, and Government stocks at lO5,
there should be resumption Of gold
payments in one year (and this is sup
position which may become a fact), what
would be the relative effect on three kinds
OF stock-say Government at los, bank at
lis, and railroad Mt 100? In all human
probability, the resumption of gold pay
ments in year would bring them to these
relative prices, viz Government, 90,
bank, So; railroad, 10
Judged by historical experience, this
would be nearly the relative result. The
consequence, then that the Government
funds depreciate Is per cent. the banks
%, and railroads 80. 1t is more proba-
bic, if this statement be thought erro-
ncous, that the actual results would be
much moro in favor Of the Government.
But we merely give this as an illustration
of a general historical truth, that on the
resumption of specie payments, or on
the occurrence of a great commercial
CONFUSION, the fall in Government stocks
will be far less, relatively, than the fall
in any other kind of stocks. The prac-
teal Inference from this plan. The
purchase of Government stocks being
made for investment it is far safer and
more profitable investment, for the future
when gold payments will be resumed than
any other.
Now nobody can doubt that the War
THAT is the great bulk and expense OF
the War; will be over in n year or SO;
and when that occurs, there will come a
gold standard, and then, when others are
lamenting over the fall Of stocks, the
holder of Government bonds will have
no fall to lament. He will in fact be a
gamer by that change which Injuries the
holders of other property New York
Tribnne.tAsa