included owing to the scarcity of industrial companies in those remote days. At the time of this test, bonds could be bought to yield 505 per cent., and are estimated to have shown no change in market value during the period. Thus the yield from the shares was substantially higher on the average and materially higher in their least profitable year, while their original purchase price of $10,163 in 1880 compares with a market value of $13,616 at the end of 1896, and $18,817 at the end of 1899.
Mr. Smith considers that the results of Test No. 5, covering the period from 1866 to 1885, are by far the most significant, since this was a period which witnessed a recovery in the buying power of the dollar, which "had had no counterpart since the Napoleonic Wars and has as yet had no other. . . . Based upon the change in the purchasing power of the dollar, there has never been a period which so favoured the purchase of long term bonds as against the purchase of common stocks as the period from 1866 to 1885."
Nevertheless, even in this test, common stocks more than held their own, their advantage in aggregate income offsetting the greater capital appreciation in the case of the bonds. They even succeeded in showing a small capital increase, a fact which seems to have surprised
