The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-03-17
SPIRIT OF THE PRESS.
Editorial Opinions Of the Leading Journals
upon Current 7 opios-Compiled Every
Day for the Evening Telegraph.
WILL THE VALUE OF INVESTMENTS
FALL UNDER GOLD VALUES?
From The NJ Y Times,


A very practical question will come
up in connection with the appreciation of the
currency, or 'the fall in gold'-how far it is
to affect the value of investments. Here, for
instance, capitalist puts 500, 600, with gold
at 125, in a railway, whose debt is two-ffths
of the value of the property, and gold subse-
quently sinks to 10. The amount of the
shareholders proportion of the debt is quite
different in the two cases, provided gold is
the absolute standard of value. In the first
he holds 100000 of property over and above
his part of the Indebtedness; in the last only
$48,000. This principle may be applied
generally to railroads and their debts. Their
stock is often valued on deprecated state of
the currency, say with gold at 40, but when
real values are reached their debts must take
their real proportion, and market values of
stock sink correspondingly.
So theor eticaily, with real estate. The
prices have been blown up by the rise in
gold while the mortgages remain often the
same. With gold currency, or paper but
slightly deprecated, these prices must come
down, and the debts which cover real estate
will bear much larger proportion to the
value, and may finally, in many instances, eat
up the property.
That this is true of commercial property
no one of course doubts. If one of our
wealthy sugar firms should hold sugar to the
value of 300, 900, bought when gold was at
125, having paid in cash $40 600, and gold
should fall to 10, we can see that the loss in
the different value of the debt would be as
above with the railway stockhoIder.
But the practical question is, ''Is gold the
absolute standard of value for railroad pro-
perty and for real estate ?" If railroads and
town lots could be exported, and were in
demand all over the world, or even in every
part of this country, and were portable and
easily exchangeable, they would tend to follow
exactly the value of gold. But q thousand
local and incidental circumstances affect
their money values. Thus, the Government
during several years gave vast business to
various railroads, and enabled them to pay off
old debts and to equip themselves with
valuable outfit. Their property, which ap-
peared to be swollen by the paper currency
has not as yet perhaps much fallen in paper,
and is, of course in gold much higher than
it was during the war. Again, immigration
has settled new districts and given a new
value to certain means of communication
and traffic; as consequence certain roads are
doing a business so much larger as to meet
the depreciation of the currency and to keep
their gold value about the same. Others are
more carefully managed, or have grown with
the country, or have so much cheapened ex-
penses that, despite the fall in general prices,
their value remains about as it was.
So again with real estate. rich stream
of immigration has poured into certain
States. 1t is cultivating land and developing
new capacities in those regions. Land has
really risen in value there, from legitimate
causes, so to $50 per cent AS natural
consequence the acre retains, with gold at
par, the same price which it had at 200. So
with lots near large cities, and sometimes in
city limits. There are thousands of excep-
tional influences affecting such property.
For instance, there are beautiful sites within
twenty miles of New York whose price has
not been affected in any way by the rise or
fall of gold, while there are others that have
followed almost exactly the value of the
paper dollar, and again others which were
very low when gold was high, and are high
now when gold is low. Public taste, the
opening of new railroads, the means of COM
munication, the reputation for health, and
many like causes, determine the prices of such
property far more than the Gold Exchange.
In large city, lots and buildings are more
directly affected by the price of gold, because
they are more easily exchanged and bought
and sold; and the speculation induced by
redundant currency can more easily find an
outlet in such purchases. On broad scale,
too, no doubt all real estate feels the effect
somewhat of an inconvertible currency, but
very slowly, and with many excep-
tions. We doubt for instance, if the
prices of good arabic land throughout
the Union have at all followed the value of
the paper dollar. At this time we question
if the fall in farming lands (taking an average
through the United States) will at all equal
the fall in gold. Who can say, too, that real
estate in this city will follow the course of the
gold market? To a certain degree it WILL no
doubt; but the question of value will depend
on the relation of population to space, the
new communications the attractions of the
parks, the state of business, and the local
taxation, as well as thousand other causes.
All that investors or holders of railroad
property and real estate can do, is to look
around and wisely select such property as has
not been swollen in price by the currency,
and is not too much laden with debts. The
theory is undoubtedly true, that all values
are either measured, or tend to be measured,
by gold; but the fact has many exceptions,
which must be judged of on their own merits,
and where practical judgment is of more use
than any economical science.
is OUR NAVY EXTRAVAGANZA
MANAGED? 4?
From the NJ Y. Herald.
When the present administration of the
Navy Department came into power it had but
small allowance of funds and large allow
ance of Secretary Welles' debts to pays but il
mt forth all ifs enaroieS set men to work or