Wyandot County Republican. [volume] (Upper Sandusky, Ohio) 1869-1903, 1871-03-02
From the New York Independent
Some Questions Answered?

To the Commercial Editor Of tie Iadegendent
Having 4 few thousand dollars that 1
shall not need in my business, and being
| naturally desirous ofubtaining an invest
ment which will produce tile greatest
| income consistent with entire safety.
am led to ask you tie following ques
\ tions. which shall be glad to haye you
answer, either privately or through the
columns OF The Independent:
l. Do you think that, as rule, first
mortgage railroad bouds are desirable
investment In what do they differ from
first mortgage on ordinary real estate
=. notice you recommend Northern
Pacific seven-thirticS to investors. Why
do you regard them as unusually secure
3. Is the Government pledged to the
payment OF these Northern Pacific
bonds?
A. notice they are selling at par
Isn't this too high2 Cannot good rail-
road securities be bought cheaper?
3 / hold few five-twenties; DO you
believe the Government will soon call
for their surrender?
| 6. What assurance have investors that
| Northern Pacific seven-thirtie. will not
| hereafter depreciate below the price at
which they are now sold, compelling
| those who wish to realize on them to do
SO at Il loss?
| To the d6oUe the Independent anstpers:
Thus far the first mortgage bonds
of American railways have proved to
be among the very safest securities.
| la proportion to amount, they have
probably shown q smaller percen-
tage of loss in interest and principal
| than any other investment that has
been accessible to the people. Such
has been the history of railway Sc
| curities. Ofcourse there have been
exceptional cases of fmismanagement
I'd loss; but far oftener have imper-
Q titles, lapsed in urance policies,
ald shrinkages of value rendered
real estate mortgages bad invest
ment. There is a living principle
underlying q railway bond, which ap
plies to very few if any other securi-
It's. This:
1. Usually the solvency of rail-
road depends mainly upon its traffic !;
and, as rule, that traffic steadily
increases as the road grows older
and the population along its route
tecomes richer and denser In q
word, the income of railroad land
hense its debt laying ability will
ordinarily keep pace with the growth
of population.
2. A railroad, once built, rapidly
creates a business which is to render
it profitable, 1t dereloPes q carry
ing trade which did not before exist,
and which grows much faster than
the tributary population increases in
numbers.
3. A railroad usually has back of
it strong corporation of capitalists
and shrewd, energetic business men,
whose Profits, financial standing,
commercial reputation, and official
positions depend upon the solveucy
and living power whose efforts tend
constantly to increase the profitable
ness and soundness of the enterprise
in whose interests they are enlisted.
4. Finally, atteL railroad is built,
every dollar expended in making i'm,
provements and extentions, 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
nenting the productiveness and value
of the property on which these bonds
are based. II is in this way that q
second mortgage may increase the
safety of he first With mortgages
which-rest upon impro$SR real estate
in our midst the security steadily de-
teriorates with time, rs the improve.
ments become less valuable. Rail
roads grow better and more prosper
Gus with age, and furnish q constantly
increasing security for the debt Great
ed in construction. 1t is for these
reasons that first mortgage railroad
bonds are among the very soundest
securities that can be had.
ii. The Northern Pacific Railroad
has threefold solidity, which reni
ers it financially impregnablc. /. It
has for its broad and firm foundation
a real estate endowment gilmore than
Twenty-Five Thousand Acres fertile
Land to each mile of track or. an
unencumbered farm of 500 acres I'm
addition to the ordinary and ample
|
secure each 81, 900 bond bought by
the public. 2. 1t has awaiting it u
business which we believe is certain
to render it selfsustaining from the
first. and to give it large surplus al
an early day. 3. 1t is in the hands of
men of known and acEno wledgod in
tegrity, whose financial standing
whose business sagacity and thorough
experience, furnish complete guar
anty that economy, energy, and fdel
ity will characterize its management
III. Government does not in form
guarnty the payment of Northern
Pacific seven. thirties; but il indirect
ly insure their payment by donating
unreservedly to the company sufiic-
cient productive lands TO pay them
twice over. The belt OF country in
which this superb domain is situated
admirably combines the three ele.
ments essential to successful farming
viz: naturally rich soil, a milo
climate 1.-THE latitude being about two
degrees below Paris, and six below,
and sufficient rainfall.
| IV. When there is no difference in
point of safety, the comparative
market value of various securities is
mainly determined by their protita
bleness. In this view Northern
Pacific gold seven thirties, selling a
par in currency, are by far the cheap
, est investment of which we hav,
knowledge Regarded as source
of income, they are cheaper at pa
than a six per cent gold bong at 81
and cheaper than six per cent. cur
rency bond at TAI. In other words
one hundred dollars invested il
, Northern Pacifics at par will produc,
larger income thal the same amour
invested in six per cent gold securi
ty at 81.
L II y