Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1871-03-01
From the New York independently
some Questions Answered.


Having few thousand dollars that L shall not
need In my business, and being naturally DESTROYS
of obtaining an investment which Will produce the
greatest income consistent with entire safety, am
led to ask you the following questions which shall
be glad to have you answer, either privately or
through the columns of The INDEPENDENT:
l. Do yon think that as rule, first mortgage rail-
road bonds are desirable investment In what do
they differ from first mortgage on ordinary real
estateS
O. notice you recommend Northern Pacific sew.
en-thrties to investors. Why do you regard them
as unusually securey
3. Is the government pledged to the payment of
these Northern Pacific bonds!
4. notice they are selling at par. Isn't this
too highS Cannot good railroad securities be
bought cheaperY
5. / hold few fve-twenties, do you believe the
government will soon call for their surrenderf
g. What assurance have investors that Northern
Pacific seven-hirties will not hereafter depreciate
below the price at which they are now sold, COM
polling those who wish to realize on them to do SO
at a lossf
l. Thus far the first mortgage bonds OF American
railways have proved to be among the very safest
securities. In proportion to amount they have
probably shown smaller percentage of loss In in-
terest and principal than any other investment that
has zen accessible to tn people. Such has been
the history of raj way seeuri les. Of course there
have been exceptional cases of msmanagement and
loss but far ofener have imperfect titles lapsed in
policies, and shrInkages of value rendered
real estate mortgages o bad investment. There Is
living principle undertaking a railway bond, which
applies to very few If any other securities. This;
/. Usually the sOlyency of railroad depends
mainly upon Its traffic; and, as rule that trattc
steadily increases as the road grows oder and the
population along its route becomes richer and
denser. In word, the income of a railroad land
hence its debt-payng ability will ordinarily keep
pace with the growth of population.
2. A railroad, once butt, rapidly creates busi-
ness which Is to render PTCnt mt De-; 1t deSeopes
which grows much faster than the tributary p0pula
ton increases in numbers
g. A railroad usually has back Of it strong cor
pOratiOn cHnita and SlrpWd Pnprgpti. bUSi-
ness men, whose profits, financial standing, COM
mercial reputation, and official posi- ions depend
upon the solvency and success OF the road with
which they are identified This powerful combina-
ton of private interest constitutes living power
whose efforts tend constantly to increase the profit
ableness and SOundness of the enterprise In whose
interest they are enlisted.
A. Finally, after railroad Is built, every dollar
expended In m liking improvements and extensions,
adding facilities for dong business, and In
curing valuable alliances with connecting lines,
adds to the security of Its first mortgage bonds by
augmentiug the productiyeness and value OF the
property on which those bonds are based. 1t Is in
| this way that second mortgage may increase the
safety of the first With mortgages which rest upon
| improved real estate in our midst the security
steadily deterioraes with time as the improvements
become less valuable. R0lyrOGdS grolo better and
more prosperous ruth age and furnish a constantly
increasing security for the debt created their con-
structiOn 1t Is for these reasons that first mort
gage bonds are among the soundest securities that
| can be had.
| If. The Northern Pacific railroad has threefold
so idlty, which renders 1t financially Impregnable.
|. 1t has for Its broad and firm foundation real es
tate endowment of more than twenty-five thousand
of fertile land to each mile of rack-Or an un-
ineumbered farm Of 500 acres lin addition to the
binary and ample security of the road and its trait
TO secure each $1,000 bond bought bv the public. z
| 1t has awaiting it a business which we believe as
| certain to render it sefsustaining from the frSt
and to gye 1t large surplus at an cary day. 8. 1t
| Is in the hands of men OF known and acknowledged
integrity, whose financial standing whose business
| sagacity and thorough experience, furnish COM
plete guaranty that economy, energy, and fidelity
i Nri1 no nj 70 ffg mo frnNn ant
III. Government does not In form guaranty the
payment of Northern Pacific seven-thirties; but 1t
indirectly insures their payment by donating unre-
serYedy to the company sut cient productive lands
| to pay them twice over. The belt of coun ry in
| which this superb domain Is situated admirably
combines the three elements essential to successful
farming, viz: a naturally rich soil, mild innate
(the latitude beng about two degrees below Paris
and six below LondOn,) and suhoient rainfall.
~. Wnen there is no dlferenc in point of safety
the comparative market value of various securities
Is mainly determined by their prontableness In
this view Northern Pacidc gold seven-thires SELL
ing at par IN currency, by far the cheapest in
vestment of which we have knowledge Regarded
as source of income, they cheaper at par than
six Der centgold bond at 50, and cheaper than SIX
per cent. currency bond at TAX. In other wo:ds
one hundred dollars invested in Northern Pacincs
at par will produce larger income than the same
amount invested In q six per Cent, god security
at s.
V. We rgard it as highly probable that a large
proportion of the present ho.ders of government
ponds will be compelled to give them up within
comparatively short time, and accept therefor cash
payment or a new i've per cent. bond. Everything
now indicates that the government will soon be able
to fund toe bulk Of Its ve-twenties at q lower rate
Of interest Hence we have uniformly ADVISED our
subscribers to convert their government bonds into
trst-cass railroad security having equal safe
ty and greater permLnence and productiveness.
vi. vi course, all securities, even those of the
United States, liable to occasional slight fuctua.
tons in current price-the result of outside circum-
stances, and not of any change in real value. But
the same causes which now render Northern Pacific
seyen-thirIes an exceptionally strong and desirable
security will naturally sustain them in the market
so tnat those who wish to their bonds into
cash can do so at any time without loss. Indeed,
with their super-abundant security their high rate
OF interest and the provision that they will always
be rec lived at ten pr cent premium in payment for
PACING bonds are far more likely to go above par in
price tnan to fall below.