Not much danger of losing value on this hammer. It isn't going to command a big price any time soon, and it is still worth more than two bucks.
>Everyone tells you don't restore old furniture because it looses all the value.
Everyone is telling you wrong. While a piece of furniture in top original condition or even slightly worn will command a higher price than one that has been restored, the cost of a broken or overly worn piece of furniture (or tool) will increase if it is *properly*(!) restored. There is a whole industry of restoration -- has been for a very long time. And proper restoration is not cheap. At one time I did quite a bit of restoration for several antique dealers, from regluing wobbly chairs to replacing missing veneer, to recreating missing parts and finishes. Dealers don't spend that kind of money if the piece is going to lose value.
The problem is amateur restorations by people who don't understand what they are working with, either wood or finish. I've made money fixing "restorations." I'm currently working on a press-back rocker that was a) painted over with green paint and b) "restored" by pounding a *bunch* of nails into the various joints. The nails I can fix. The corrugated fasteners used to repair splits in the seat are going to have to stay, unfortunately.