Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1864-08-19
G0yEGNMENT SECURITIES AS Az IN
NESTMENT


NESIMENG
There 81 one view Of investments In Cow
errmcnt stocks which has not generally beer
t4krn. 10 taken by shreNd capitalists and
tpeculators, 20 bias not been generally c0nsid-
cred by the people 10 is this: When, after
long suspension, specie payments are re-
sumed, an stocks and all prices immediately
mud largely decline, but G4revusHt stocks no
son materially decline This iact we assert
cu Che ground Of historical experience. u Is
true thai in the war OF l8l2-l5 Government
stocks fc.l al one lime, TO 70 but most of
the banks were then suspended ar bank
lult, and thcrc was comparatively little
currency in the country to buy stocks
with. But suppose the gold value Of Gov
crumaut stocks were this day 10. the lowest
they were oyor till now sold at,) the market
value at the present rate Of gold would be
I35. while IN TACT the stocks are selling be-
low lO5. Surprising, then, that the market
price vi Government securities were, by the
resumption OF specie payments, 90 90 down
o. 20 no july, the decline would be 80 on 100,
equivalent 90 33 les per c., while the decline
una railroad stock would be nearly or quite
equal go the whole present difference between
li and paper. A common railroad stock
selling now 90 l0j, would decline 20 90, Or
Do .he beat suppo,able case 20 GO. This is
illustrated By ,he history Of every suspen-
sion OF specie Payments we have had, and
.thsre atc many business men who viii recol
lect what the prices OF produce, stocks and
all salAhie commodities were alter the com
merc,ai revulsions Of 1897 and lS3J-49, 10
lS4l-i2 and '43, prices we're reduced To d de
gree now scarcely credible. But Gopenasn
stocks did NOT tall materially. On the contra
u,uiaa settled principle deduced from all
experience in England and this country, iha
GousryimeBt funds do not Raciuate TO TIE sam
tfisat as other kinds Of property There Il
good reason for il. The time, rate Of interest
and security are all fixed and permanent
There may be some variations IN the matke
price, owing TO the greater or less bulk o
the entire currency, but there can be none II
the intrinsic value and hence It IS, that ms
toricaliy the fluctuations In the value OF Gov
eminent stock have been comparatively small
In all the recent commercial fluctuations
Knglaud Gin some Of which there has been
complete prostrauon Of all other property
the variation in British consols has not bee
over five or six per cent. This cennot b
said Of any other kind Of stock. OF ral."a
and bank stocks the great variations and
times wonderful depreciauons are notoilou
Sudden commercial revulsions have reduce
these stocks to one-half their puee. eui
pose. then, that gold say at 80 now, and CO.
crnment stocks al 1905, there should be r
sumption OF gold yments IN one year. (ai
this is superstition which may become
GctO what would be the relative effect
three kinds of stock-say Government
lO5, bank at / rs, and railroad at l2O
all human probability the resumption OF 60
payments in year would bring them to the
relative prices, viz, Government 80; bal
S5 railroad 70.
Judged by historical experience this won
be nearly the rclotipe result. The consequen
then, is that the Government funds d9pre'
ate ! 8 per cent. the banks 20, aud tue IA
roads So IL is more probable II THIS sta'
ment be thought erroneous, mat the aulO
results would be much more ia favor oil "
ernment. But we merely give this as an
lustralion Of general hiNorioal truth, u
on the resumption Ct specie payments, OF
the occurrence of great commercial rev
sion, the fall in Government stocks wilI
far less, relatively, than the fall IN any on
kind of stocks. The practical inference r.
this IL plain. The purchase of 6oyernm
stocks being made for investment, at as
safer and more profitable Investment for me
taro, when gold payments VIII be resuh
than any other. Now nobody can Doubt
the War Chat is, the great bulk and eApe
of the War; will be over in year or
and when that occurs, there ioW come a 9
standard and then, when others are lame
ing over the fall on stocks, the holder Of q
erRment loans will have no fall to lament
lie wall, in fact, profit by that change VII
Injuries the holders Of other property.