The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1866-04-27
Probable Eject OF an European War OF
American Securities.


In an. article on the Austro- -Prussian situation
and American securities, the Financial Chronicle,
oflApril IA, says:
OF the large amount of United States bonds
held in Europe probably not less than 5000 600 600
are distributed throughout Germany. How would
by the outbreak ei hostiitiesS The first result Of
war in any country, and under any circumstances,
is TO disturb confidence, contrao! commerce, and
GENERALLY. Capital is Withdrawn from manufac-
tures and foreign enterprises, and the wonted
earnings Of commerce, instead OF being employed
some form Of security least liable to depreciation
from the condition Of public affairs. Amid this
general quiesoence OF capital, the Government
rover, and by adapting It's offers to the prevailing
estimate OF the public credit, borrows portion Of
the capital thus taken out OF employment Such
war between: these countries. But would Ameri-
can securities held there necessarily suffer The
decline In home securities would naturally induce
many holders to sell them and invest the proceeds
In some form Of security, the value Of which is in
dependent OF domestic disturbances. '''.'"
During the wars Of France, larger amount Of
French capital sought Investment in the United
the outbreak Of hostities in the Southern states,
large amounts Of capital were sent to Europe for
dency OF capital to seek foreign investments pend
ing IN condition OF war. Should the occurring war
between Austria and Prussia call forth this usual
tendency, the capitalists Of Germany, seeking a
sound and stable security into which they may
change their Investments, have at hand just what
they desire in the $40 bonds. Hitherto, they have
eh9Wn remarkable confidence in our SECURITIES.
Thsy have taken them in preference to the bonds
OF their own governments; which, even in times
OF peace, have been driven to negotiate their
bonds in London or Paris. It would be difficult to
conceive why, in the prospect Of destructive
var, they should sell our securities to invest in
those OF their own governments. It is true that,
In time OF war, there Is always class whose inan-
cial judgment Is influenced by their political zeal;
and 1t Is quite probable that some German capt.
taists may be induced to sell out 520's, and take
up national securities; nor is it impossible that
sone bankers from motives Of loyalty or political
advantage, may use their influence to induce
others to take that course. But the cases in
which citizens deliberately make sacrifice of
capital in order to lend to their government are
the rare exceptions; the frat instincts with nine
tenths Of the people are to insure safety for their
The tendency Of recent events in the United
States is in favor Of increased confidence in our
securities abroad. The premium on gold has ma.
thorEing the funding Of the short time Obligations
OF the Government and the adoption Of measures
looking to the resumption Of specie payments; and
calculated to inspire confidence abroad in the
stability Of the Government. In view of these
considerations, 1t ie not easily seen why 5.29's
should be- less esteemed, in comparison with com
hitherto.
The fact that United States bonds have not, az
in all former cases. risen in Europe correspond
tainly shows that hitherto the effect of the politi
cal situation has been unfavorable to the price,
Up TO this stage in events, however, we have seen
nothing more than that indiscriminate failure OF
confidence which always attends grave crisis
the financial results proper to condition OF war
not having been developed. It Ia, however, q
nominal compared with what has occurred upon
many kinds OF Government securities, especially
upon bank stock.