Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1864-08-18
Government Securities az an Juvestmant.

| mere is one view of Investments !, C1.
ment stocks which has not been reneraIIr r..
Ken. 1t taken by shrewd capitalists and
| SPECTATORS, 1t has not been generally consid.
cred by the people. 1t is this: When, after
| long suspension, specie payments are re-
Suihed, ali stocks and prices Immediately ana
largely uecilne, but Goue7sne1at stocks DO NOT
materially decline This fact We assor. ~, ~
ground of distorted erper;snos r i +n-Io
| that in the War of lSl2-15 Governnat
stocks fell, at one time, to 10: bnt most %
the banks were then suspended or bankrunt
| and there was comparatively little currency
| IN the country to buy stocks with. But SIM
| pose the gold value of Government stocks
were this day 20, (the lowest they were ever
Soid at the market value at the present rate
OF gold would be 135, while in fact the
Jocks are selling below los. Supposing
then, that the market price of Government
securities were, by the resumption of specie
payments, to go down 10 20 in july. the de-
ct"ae would be 80 on los, equivalent to 334
per cent, while the decline on a railroad stool,
would be nearly or quite equal to the whole
present difference between gold and naner
a common railroad stock, selling now at los
MTuiu uecilne to %, or, in the best suppos-
aoie case, to 60. This is illustrated nv the
ii'e'ory Vi every suspension of specie nav
w IA I hdu, ana there are many bus
mess men who will recollect what the nrices
OF produce, stocks and ali salable commodi.
ties were after the commercial revulsions Of
1887 and 1890 In 1871, ~ and AZ
prices were reduced to degree now scarcely
credible.
But GoUernDse1d stocks did not fall material
ly. On the contrary, it is settled pripciple
deduced from all experience in ENGLAND and
this country, that Goreyunle3a funds do not
t~ct'tate to the same extent as otAe, kinds of
prop1fy. There is good reason for it The
s"tS' rae q "terest, and sec Fixed
and permanent. There ma, c., varia-
uons IN the market price, owing 10 the great
er or less bulk of the entire currency. but
there can be none in the intrinsic value: and
hence 1t is, that historically the fluctuations in
the value OF Government stocks have been
comparatively small. In all the recent com
merclal fluctuations Of England lin some of
which there has been a complete prostration
OF all ether property the variation in British
consols has not been over five or six Der
cent. This cannot be said of any other kind
OF stock. Of railway and bank stocks the
great variations and at times wonderful de-
preclatlon are notorious. Sudden CONNER
clal revulslons have reduced these stocks to
one half their price. Suppose, then, that
with gold say at 80 now, and Government
stocks at lO5, there should be a resumption
OF gold payments in one year, land this is
supposltlon which may become a fact.) what
would be the relative effect On three kinds of
stock-say Government at 1O5, bank at IFS
and railroad at 100? In all human nroba-
blllty the resumption Of gold payments 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 Telatipe result The conse-
quence, then, is that the Government funds
depreclate 10 per cent, the banks 25. and
the railroads 90. 1t is more probable, if this
statement DC thought erroneous, that the ac-
tual results would be much more 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
VI Oh Cle occurrence OF great commercial
CONFUSION, the fall in Government stocks will
De lar less, relatively, than the fall in any
other KIND OF stocks. THE practical inference
from this is plain. The purchase of Govern
ment stocks being made for investment IL is
a t@y safer and more profitable Investment. for
The future, when gold payments will be resum
ed, than any other.
Now nobody can doubt that the War THAT
IS, the great bulk and expense of the Wary
Will be over in year or so; and when that
occurs, there wiH come a gold standard and
then, when others are lamenting over the fall
OF stocks, the holder of Government loans
Will have no fall to lament. He will. in fact.
profit by that change which Injuries the hold
ers of other property