If Socialism Comes, Govt. Bonds Offer No Safety

Prophet Statesmen, J. Reuben Clark Jr.

And may I make here one observation about government bonds? Many trustees invest their trust funds in government bonds on the assumption that such bonds are the safest of all securities and that if they become worthless every other security will be worthless. But the whole history of the world, from the earliest, shows this assumption is erroneous, grossly so. Peoples, society, property exist and persist even though governments change or go down. A mere change of government does not destroy any of these, though all may suffer when the overturning revolution comes. The almost countless revolutions of the old world and the new prove this.

As the world has gone in the past, our own government could fall—which, pray God, may never come—but the bulk of the property would remain, and the bulk of the people would be here; and if the succeeding government recognizes the ownership of private property, then some one will own it, and the laws of private ownership will require some recognition of the security encumbrance. This has been the experience of all modern history.

Of course, where socialism or communism come in, as in Russia, all the bonds of the preceding government are not only repudiated—or not paid—but private property is abolished. That follows not from a change of government, but from an overturning of the whole economic system, the new government being set up to carry out the new ideology. Thus it can be that government bonds are not the safest and soundest security in which to put trust funds or private funds.


Source: J. Reuben Clark Jr., LDS Church News, 25 September 1949. J. Reuben Clark Jr. (1871–1961), served as a mem­ber of the First Pres­i­dency of The Church of Jesus Christ of Latter-day Saints, 1931–1961. Prior to his full-time church ser­vice he was assis­tant solic­i­tor to the State Depart­ment, worked in the Attor­ney General’s office, Under Sec­re­tary of State, the author of the clas­sic study, the “Clark Mem­o­ran­dum on the Mon­roe Doc­trine” and U.S. ambas­sador to Mex­ico. Among those who knew his work best, J. Reuben Clark was rec­og­nized as the fore­most con­sti­tu­tional scholar of the 20th Century.


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