Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1871-03-03

To the above the Independent nsWerS rs
follows:
/. Thus far the first mortgage bonds of
American railways have proved to be
among the very safest securities. In pro-
portion to amount, they have probably
shown smaller per centage of loss in in
terest and principal than any other invest
ment that has been accessible to the people.
Such has been the history of railway secur-
tiles. OF course there have been excep-
tional eases of mismanagement and loss;
but far oitenor have imperfect titles, lapsed
insurance policies, and shrinkages of value
rendered real estate mortgages a bad in
vestment There is living principle I'M
derlying a railway bond, which applies to
very few if any other securities. This:
/. Usually the solvency of a railroad de-
ponds mainly upon its traffic; and, as a
rule, that traffic steadily increases as the
road grows older and the population along
its route becomes richer and denser. In a
word the income of a railroad land hence
its debt-paying ability will ordinarily keep
pace with the growth of population.
2. A railroad, once butt, rapidly creates
a business which is to render 1t profitable.
1t developes carrying trade which did not
before exist, and which grows much faster
than the tributary population increases in
numbers.
3. \ railroad usually has back of il a
strong corporation ofcapitalists and shrewd,
energetic business men, whose profits, fl
nancial standing, commercial reputation,
and official positions depend upon the SOL
vency and success of the road with which
they are identified. This powerful combin-
alton of private interests constitutes lv-
ing power whose efforts tend constantly to
increase the profitableness and soundness
of the enterprise in whose interest they are
enlisted.
4. Finally, after railroad is built, every
dollar expended in making improvements
and extensions, adding new facilities for
doing business, and in securing valuable
alliances with connecting lines. adds to the
security of its first mortgage bonds, by aug
menting the productiyeness and value of
the property on which those bonds are bas-
ed. 1t is in this way that second mort
gage may increase the safety Of the first.
With mortgages which rest upon improved
real estate in our midst the security steadi-
ments become less valuable. Railroads
grow better and more prosperous with age,
and furnish a constantly increasing securi-
ty for the debt created in their construc-
ton. 1t is for these reasons that first mort
gage bonds are among the very soundest
securities that can be had.
II. The Northern Pacific railroad has a
threefold solidity, which renders it finan-
cially impregnabe.
/. 1t has for its broad and firm founda-
ton a real estate endowment of more than
g, 900 acres of fertile land to each mile oil
track-or an unencumbered farm of 5000
acres lin addition to the ordinary and am
Pile security of the road and its traffic. to
secure each $1,000 bond bought by the pub
lie.
2. 1t has awaiting it business which we
believe is certain to render it aeli-sustain-
| ing from the first, and to give it largo sur.
plus at an early day.
| 5. 1t is in the hands of men of known and
acknowledged integrity, whose financial
| standing, whose business sagacity and thor
| ough experience, furnish a complete guar
anty that economy, energy and fidelity will
| characterize its management.
III. Government does not in form guar
anty the payment of Northern Pacific seven
thirties; but it indirectly insures their pay
ment by donating unreservedly to the com
pany sufficient productive lands to pay
them twice over. The belt of country in
which this superb domain is situated adj
mirably combines the three elements es-
sential TO successful farming, viz: natu-
rally rich soil, mild climate, (the latitude
being about two degrees below Paris and
six below London and with sufficient rain
fall.
". When there is no difference in point
of safety, the comparative market value Of
various securities is mainly determined by
their profitabeness. In this view Northern
Pacific gold seven-thirtes, selling at par in
currency, are by far the cheapest invest
ment of which we have knowledge. Re-
garded as source of income, they are
cheaper at par than a per cent gold bond
at 80, and cheaper than a o per cent curren-
cy bond at 74i. In other words, 500 in.
vested in Northern Pactics at par will pro.
| duce a larger income than the same amount
| invested in per cent gold security Al
so.
V. We regard it as highly probable thai
large proportion of the present holders o
government bonds will be compelled t.
give them up within comparatively shor
time, and accept therefor cash payment OIL