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From the American Railroad Journal. Probable Effect of an European War upon American Securities.
An European War being certain, one of the most interesting problems involved, as far as this country is concerned, is its probable effect upon the intrinsic and marketable value of our securities, particularly those issued on account of railroads, and works of similar character.
From the intimate relations which subsist between the United States and all the commercial pations of Europe, each is, to a certain degree, necessarily affected by the condition of the other. If one be prosperous, all share in this prosperity. If the contrary be the fact, all suffer. At the present day, no nation, however independent its action, and however free from political and diplomatic entanglements, can escape the effect of the conduct or condition of its neighbor. Commercially, they belong to one community. If a paralysis strike a particular branch of industry of one of the members, it falis upon a corresponding branch of that of another. Should cotton spinning in Great Britain cease, the production of the raw material in this country would be largely curtailed. If European nations become too poor to purchase our staples, their previous value is the measure of our loss. Our people, therefore, are to be effected by a war in the same manner as
But the efiect of a war will extend beyond the mere influence it exerts upon the price of our staples. An opinion adverse to one of our more important interests, may do us as much harm as would the loss of one of our leading crops. --Should a war create a distrust as to the value of European securities, and depress their market value, a similar sentiment, by necessary sympathy, would cross the Atlantic, and exert a similar effect upon the securities of this country. There may be no necessary reason for such coincidence, and no satisfactory explanation for it. The price of Eng. lish corsols has certainly nothing to do with the value of Erie or New York Central stocks, yet the quotations of the latter dance attendance upon the former with as much certainty as the shadow does the substance.
The first shock that European securities reveived, was consequently followed by a corresponding decline of those of the United States, in obedience to what seems to be an unvarying law. We may always calculate a certain result in this country to be due to a real or assumed condition of affairs in Europe. But in the present case, there are other reasons than those named, why this country should feel the effects of an European war. For several years past our people have been in the habit of borrowing large sums from abroad for the prosecution of our public works. It has been foreign capital that has enabled our people to accomplish no small part of the immense results that have been achieved. If the whole, or a considerable portion of this supply be cut off, the entire burden of the construction of our public works will be thrown upon our own people. This fact must draw large sums from other investments, and create a general stringency, the effect of which must be to reduce the market value of all our securities..
The prospect of war bas already produced the results we have described. It has almost entirely checked the flow of European capital to this country-imposing upon our own people the burden of providing themselves the whole cost of our public works. A depressed share and bond market is the necessary result.
The degree of the depression of the market value of the securities of this country will depend, to a very considerable extent, upon the degree of the fluctuations in Europe. But as the causes that will produce, for a time, similar results, are different, our own market must recover its tone so soon as it is seen that the real value of our securities are not impaired, and so soon as our people adapt themselves to the altered state of affairs. The market now yields to a sentiment borrowed from abroad, and to a condition of things in this country, which must work its own cure. An European war certainly will not diminish the earnings of our railroads. Thus far it has added largely to their earnings, by the increased price created for many of our more important staples, which is rapidly drawing them from the interior to the seaports. The internal trade of the country was never so active as at the present time. Our railroads were never before so successful. The earnings of the entire investment in the United States are at least 25 per cent. greater than at a corresponding period the past year. With an equal ease in the money market, it may be confidently stated, that quotations would at the present time rule from five to ten per cent. higher than last year. The investment is worth such an advance were its value to be measured by the amount of income.
We cannot at so eariy a period, estimate the influence of an European war upon this country. There seems to be no probability, however, that this country will, in any way, become a party to it. Our people, true to their money. Joving instincts, will think it a good time, while the rest of Christendom is at war, to do the work of the world, and charge their own price for it. It may turn out that commerce can only be safely carried on through the medium of American bottoms. Should the war become general, provisions of all kinds must command a high price. The only staple, the price of which would be injuriously effected, would be cotton, so that on the whole were this country not indebted to Europe, and had we not been accustomed to rely upon European ca. pital to carry forward our works, it seems probable that the first. effect of a war would apparently be favorable. It would increase the value of most of our products. It would give additional employment and higher wages, to many of our more important interests, wbich would nearly balance the injury that others would suffer. It would in the end result in sending a large amount of capital into the country, as the stability of our institutions, the prosperity of our people, the intrinsic value of our investments, would contrast most favorably with what the old country would show. Such must be the case so soon as we become acclimated to the new state of things, and so soon as the favorable contract referred to, can be properly appreciated. Whether peace or war be the state of Europe, the greater value of investment in this country must be seen and acknowledged, and must continue to attract to it, steadily increasing amounts of foreign capital.
While, therefore, we think it very probable that a rapid decline of the securities of this country may follow a similar decline in Europe, this fact does not in the slightest degree invalidate their value. Should foreigners see stocks quoted in our market at a lower figure than cost, there is no occasion for distrust or alarm, nor is there any reason to suppose that they have paid more than the securities they bold are worth. The depression will be temporary. The state of Europe bas not affected their value in the slightest degree. The railroad investment in this country was never worth so much as at this instant. We have regarded the stringency which has prevailed for the past nine months as calculated to produce the most beneficial results. Had the money market continued easy, our people under the flush and excitement of success, would have rushed wild into visionary projects. Upon such, an effectual quietus has been put. Under the present state of the market, rival, or useless, roads will not be built. The roads that are constructed will, consequently, become all the more valuable. A stringency in our money market, therefore, should assure, instead of frightning, the holder of stocks or bonds. A depression in prices merely indicates what is to him, a wholesome state of things; not that his investment is the less valuable, but in fact more so.
Under such circumstances, to return securities to this country for sale, would be the greatest folly. Such a course pursued to a considerable extent would defeat the object of returning them. It would only serve to depress still more their value. As their intrinsic value is entirely independent of their market value, the two will harmonize in our own markets, so soon as the present causes of the depression, which are accidental and temporary in their character, shall cease to operate.
[From the Southern Quarterly Review.] Material Progress of the United States. Report on the Seventh Census, with accompanying Tables.
By J. D. B. De Bow, Superintendent United States Census. Washington: 1854.
The results of the seventh census of the United States just published, are calculated to excite pleasurable emotions in the heart of the philanthropist, as evincing the progress which republican civilization has made over purely monarchical systems of government, and as conducting to show the inherent energies which & free people eminently possess, in planning and laying the foundation of their political and social welfare. These results involun. tarily suggest contrasts with the condition of other and older nations, who have enjoyed uninterrupted happiness, so far as a different form of government could confer it, for centuries, and whose political integrity has been maintained throughout the revolutions of contemporaneous history. So recent are the events which led to the discovery and European occupation of the territories of the United States, that it seems but yesterday, that the Indian of the Southwest tilled the earth by digging with fish bones, and whose crops for breadstuff were the wild persimmons which grew luxuriantly over his unhedged plains. So recent, that the red man of the West dwells on the verbal traditions of his fathers, as still monarchs of the North; and the octogenarian can point to Bunker Hill, as being still unstained, in his boyhood’s day, with the blood that achieved our independence. Thus, as it were, our nativity was of yesterday-our nationality commenced with to-day. It has not passed through the ordeal of a thousand years, nor yet hardly attained the experience of active puberty.. It has yet to reach maturity—to stand before the world in the attitude of full grown manhood, armed at all points with the weapons of peace, and in the unreserved possession of the faculties and powers of a Colossus. The utmost license to speculation, has fallen behind the reality of our progress thus far; what that progress may be hereafter, the most sanguine anticipation may be inadequate to determine.
We have said that involuntary comparisons are suggested with other nations, whose forms of government differ from our own. We believe that naturalists have not gone quite so far, as to accord to one genera of the Caucasian family, pre-eminence over another ; por will we assume that, morally and physically, the Anglo-American is superior to the Anglo-Saxon. If, on this score, there is a universal parity in the Caucasian family, it follows that the pros. perity, activity, enterprise and intellectual progress of one offshoot of the family over another, have their origin and inspiration, in the government which such nation adopts, and in the character of their freedom, and the moral efficacy and utility of the institutions which they erect. In this respect, no example of ancient or modern times compares with our own-which incontestibly proves, that the true theory of human happiness and success, consists in the liberty of physical pursuits, and the imposition of only such laws as are calculated to promote and consecrate our freedom.
The contest of progressive rivalry in the nineteenth century, has been confined to the United States, France and Great Britain. But both France and Great Britain had passed through almost every political stage toward the attainment of a perfect state of government, before the birth of the American Union. Both had invoked the philosophy and experience of twenty centuries to aid in constructing their social fabrics, and to vindicate every resort to revolution, to bloodshed, to tyranny, or to anarchy. They had built upon the splendid sites, vacated alternately by barbaric and civilized monarchies or commonwealths; and bad endeavoured, by cautious diplomacy and rigid discipline, to avoid encountering those fearful disasters which had befallen those cities and empires, which had crumbled and strewn Europe and Asia with their ruins. The people of the United States, on the contrary, had come hither, not only actuated by various and opposite motives, but from coun: tries recognising conflicting systems of government, and severally imbued with antagonistical feelings and prejudices—some seeking an asylum from oppression-some led by a spirit of adventure; some to expiate crimes in banishment; some to better their fortunes; and some, who preferred hardships and exile, with freedom of conscience, to ease and luxury with a trammelled conscience. And of this people--strangers to each other, strangers in their intercourse, and strangers in their sympathies – it was expected to make a nation, unanimous in sentiment, harmonious in action, and concurrent in popular suffrage! How could it be believed, that these adverse and diverse elements should co-operate, fraternize and counsel together, and, as by a word, put all the wheels of a civil and practical government in motion? The leading nations of Europe, of which France and Great Britain were the eminent representatives, had been influenced by circumstances, and tutored by expediencies, until the population of each had been moulded to a unity, and the bond of sympathy, superadded to that of interest, was made complete. They had reached, at the time of the American revolution, that social condition which is wanting in none of the essential qualities of a united family, nor of the filial instincts which become potriotism or martyrdom, in the devotion with which the subject serves his king. But it was a happy coincidence that brought a unicn among the American colonies ; for otherwise, being in the social condition we have described, without any political organization, whatever, as a whole, a hundred years