Mineral Point weekly tribune. (Mineral Point, Wis.) 1859-1868, 1864-08-17
Government Securities as sp Investment,


There is one view of investments in Gov
ment stocks which has not been generally Ia
ken Ii taken by shrewd capitalists and
spectators, 1t has not been generally consid-
cred by the people. 1t IS this When, after
a long suspension, specie payments are re-
sumeu, all stocks and prices Immediately and
largely eeeline, but Gosvrl.nls7st stocks DO NOT
"safefaalty decline. This fact We assert on the
ground Of Historical ecpsrienoe II is true
that IN the War of 1S12-I5 Government
stocks fell, at one time, 10 10; but NEST of
the banks were then suspended or bankrupt,
and there was comparatively little currency
in the country to buy stocks with But sun
pose the gold value of Government stocks
were this day 80, (the lowest they were ever
sold att the market value at the present rate
OF gold would be 135, while in fact the
tochs are selling below los. Supposing
then, that the market price of Government
securities were, by the resumption of specie
payments, TO go down to 40 in July, the d.
ctRte would be 80 on los, equivalent to $50
PER cent, while the decline on Il railroad stock
would be nearly or quite equal to the whole
present difference between gold and paper
4 common railroad stock. selling now At los
would decline to %, or, in the best suppos-
able case, TO so. This Is illustrated bv the
history OF every suspension Of specie paw
ments we have had, 8Ui there are many bus
mess men who will recollect what the prices
OF produce, stocks and all salable commodi-
ties were after the commercial revulsions of
1887 and lS39-4O. In 1S41, ~ and As
prices were reduced TO a degree now scarcely
credible.
But Government stocks did not fall material.
ly. On the contrary, it is a settled principle,
deduced from all experience in England and
this country, that Government funds do not
fi,sctaate TO The same erte7at as other kinds OF
property. There is good reason for it The
t3e rate Of interest, and security are all fixed
and permanent. There NAV be some varia-
uons IN the market price, owing TO the great
er or less bulk of the entire currency. but
there can be none in the intrinsic value; and
hence it is, that historically the fluctuations in
the value OF Government stocks have been
comparatively small. In all the recent com
mercal 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 per
cent. This cannot be said of anv other kind
OF stock. OF railway and bank stocks the
great variations and at times wonderful de
PROBATION are notorious. Sudden CONNER
clal reyulslons have reduced these stocks to
one half their price. Suppose, then, that
with gold say at 80 now, and Government
stocks at los, there should be a resumption
oI Soiu payments IN one year, land this Is
supposition which may become fact,) what
would be the relative effect on three kinds of
stock-say Government at los, bank at lis,
and railroad at 800? In all human proba-
blllty the resumption of gold payments in a
year would bring them to these relative
prices, viz Government, 90 bank, 50 :;
railroad, 30.
Judged by historical experience this would
be nearly the relatiue result. The conse-
quence, then, is that the Government funds
depreclate 10. per cent, the banks 25. and
the railroads so. It is more probable, if this
statement be 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 general historical truth,
that on the resumption of specie payments,
or on the occurrence Of IA great commercial
CONFUSION, the fall in Government stocks will
be far less, relatively, than the fall in any
other kind of stocks. TIE practical inference
from this is plain. The purchase of Govern
ment stocks ENG made for investment It IS
q far safer end more prottab2e investments for
tie FUTURE when gold payments viii be resum-
ed, than any other.
Now nobody can doubt that the War (that
is, the great bulk and expense of the War;
will be over in year or so; and when that
occurs, there uH come a god standard : and
then, when others are lamenting over the fall
OF stocks, the holder of Government loans
viii have no fall to lament. He will, in fact,
profit by that change which Injuries the hold
ers of other property.