The Davenport gazette. [volume] (Davenport, Scott Co., Iowa) 1841-185?, 1850-08-15
From the American Railroad Journal
RAILROAD SECURITIES.

1 From tie american Railroad Journal.
RAILROAD SECURITIES.
By far the greater part Of the rniIroads
now in progress nre in the South and West,
parts Of the country that have but little ac-
cumulatcd capital. Most Of the compa nies
are therefore obliged to resort to the com
mcrcial towns for loans Of money TO pur-
chase iron, equipment, etc. The prepara-
tion Of the road bed for the iron often ex-
haus,s the immediate funds ofthose building
them. For all beyond thni, they must bor-
row upon such time as will suffice 10 con-
vert the means they possess into money.
a great number Of these companies are
now coming into market for money. A
majority Of the securities which they bring
are the obligations Of towns and counties
interested iD these works. As far as safe
~ and certainty Of fpayment are concerned
no securities can be better. They repre-
sent mere fraction Of the ability Of those
issuing them. The payment Of them may
be readily enforced by law, and the aggrc-
gate property OF whole community may
be seized in discharge Of the debt. The
bodies asking for these loans have high
standing and credit, and are every day be-
coming more and more able 10 pay.
Al this is rs general rule sdmit,ed.-
No capitalist doubts bu, that the bonds Of
the richest couniies Of Ohio and Indiana
for the amount Of 100000 are perfectly
safa investment, MS safe ms New York or
Ohio State stocks; yet these stocks COM
mand very large premium for permanent
investment, while those Of counties having
the same time to run and bearing the same
rate Of interest are at a large discount
This difference 10 the price OF these secnri-
ties is in part owing to the shortness oftime
they have been ia the market. They have
attracted SO little attention that the public
have not become impressed With their true
value. Another cause is to be found in
the interest that the brokers BY whom they
are mostly negotiated have in keeping them
AT n low figure. II broker can buy al
s5 cents and sell Mt 100, the amount Of one
Of his commissions is readily seen. Where
too, a broker buys at low figure, upon an
order, his principal may wish to cell again
rs tho value Of tho security rises in the
market. This gives him chance for a
second commission, which he would lose if
he gnve in the outset all the security were
worth, saving his first commission.
Here we are satisfied lies the great ob-
stacie with which railroad companies have
to contend, in obtaining the fall value Of
their securities. The money broker and
the company have exactly opposite inter-
cs,s: the former to buy ns low, and the lat
ter to get as much possible. The broker
is interested too keep the seller away from
the capitalist, who buys for investment,
for the purpose Of pocketing the commits
sion as The go-between. The systematic
concert Of this large. active and influential
class, renders il very difficult to negotiate,
without their aid, securities not already
well known in the market; and their gains
are measured just in proportion as they can
blind the eyes or embarrass the position Of
the persons having securities to offer.--
Such persons cannot be too cautious how
they show their hands to this class Of men.
They ingcniously worm out Of the seller
every fact in his case that can make for or
against him, for the purpose Of using what
ever is favorable for their own advantage
if they get the job, or against the seller il
they lose it. Asan invariaLie rule the less
security is hawked about Wall street the
better. An exposure there for few days
will faint the best Of them. Alter all, only
one person can have the business of selling
them, aud every person consulted, and
who has failed 10 get the j,b, teels that be
ought to have had il, and gives the scheme
| o., sbot h.o Il r:,, .h ~
ry off as few honors ns possible. Every
ono who knows anything Of Wall street,
knows how easily il is for any man or body
Of men to throw discredit and distrast upon
the best of security.
j In money matters it is the same as with
purchases Of produce. The merchant buys
at the smallest possible price, and sells at
the highest he can get lie stands hetween
the producer and consumer, and his profits
nre measured by the gains he can make
between the two.
Ifa company wish to negotiate securities,
the proper way Tor them to 90 work is, TO
first make up their minds what they pro-
pose to do. and having done this, to select
The right kind Of man to aid them, man
who shall bring the seller and purchaser
for investment together. and who shall be
entitled to proper commission for his
services. II is time that these negotiations
should be effected upon some system which
shall do Justice to the important improve.
ments going on 10 all parts Of countrv, and
which shall receive the aid, good will, and
encouragement Of oil.
ASK THY PURSE WHAT THOU SHOULD ST
Buy.-We put the question 70 ours the 9th
ler day, but we are sorry to add, that in
spite Of echo's habit Of repeating the last
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