Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1871-02-11
WORCESTER.
SATURDAY. FEBRUARY II. 1871,
Railway and other Securities.

Railway and other Securities.
In this country, there was never time when
more enterprises were afoot soliciting the invest
ments of surplus capital, or when there was
more doubt aud uncertainty in regard to the
security of proposed investments. The new
railroads at the west, whose bonds are in the
market cannot be counted on ones fingers; and
ell these securities profess to be entirely safe,
while they seem attractive In the matter of in
terests. VIII the promise they hold ont be fully
reallzed2 To investors, this is the important
question; and not many of them are able to
answer it satisfactorily. They can read what is
said by those who set forth the attractions of
the varions enterprises. They can study the
charming pictures of strength and future pros
perity. But they cannot always determine how
much, in each case, is due to rose color which
may presently assume darker and much less
elightful hue.
Experience has shown, that, In such cases, all
is not gold, that glisIens. Enterprises that be-
gau with high hope and splendid dreams Of sue
cess, have sometimes gone on only to unrealized
promises and consequent bankruptcy. Even
when the security seemed to be carefully guard
ed, it has, in some cases, proved worthless For
instance, s, me years ago, certain counties of
Iowa issued bonds in aid of railroads passing
through them. While the roads were unbuilt,
they were eager to have these bonds sold, and
very earnest in making pledges to provide
promptly for payment of interest and principal.
The roads were built, but did not yield net
profits sufficient to pay interest on all the bonds
Issued in their behalf; and very soon the coun
ties in question began to repudiate their obliga-
tons, aud the attempt 10 enforce collection of
the interest they promised to pay, has produced
great excitement among Tie people. Of course,
such bonds are not exceedingly valuable. Some
years ago, the state of Minnesota issued bonds
In aid of certain railroads, in that common
wealth, expecting the companies to pay the
interest and principal. Tney were in due form
bonds Of the state; but, when the railroad com
panics became bankrupt, they we're promptly
repudiated, and have not been paid to this day.
If the state could be sued by those holding these
bonds, the money due could be collected. As it
Is, they are cheated by means of this repudia-
ton; and the state officials excuse the infamous
proceeding, because the bonds in question were
issued in aid of railroads.
The bonds and other securities offered in the
market, nay be divided into three classes -
Those that are perfectly good in all respects
those that are sure to be good, after some ex-
pcriencc of being "under the weather, and
those that arc sure to prove worthless or nearly
so. Men of limited means, who may have two
or three thousand dollars, more or less, to in
vest should ropf;ne tbair nurchasoa ep+iral1, IN
the securities which we put in the first class
for they can not afford 10 be without the interest
regularly, and they may, at any time, need to
sell out without loss, in order to put the money
in house or in busine s. Very wealthy men
who have large amounts of surplus capital and
can afford to wait for profitable returns, may
safely purchase the securities which we rank in
the second class; but such men generally know
what they are about, when they make invest
ments. Securities that are sure to become worth
less, can not be safely purchased by anybody
They are not likely to be purchased by those
aware OF their true character save for purposes
of speculation. Such securities usually become
The staple of stock gamblers, and are regularly
quoted in the markets where these gamblers
operate.
But, 1t is not easy TO know what is good and
what is bad, when we have money to investp
This is true. Therefore, purchase nothing
which You do not kaolo to be good, or which
you can not know 10 be good, by means of a
little investigation. For instance, you can see
that our government bonds are safe; you can
trust the bonds issued by Massachusetts and
the other New England states; you know that
the stock and bonds of certain New England
railroads are perfectly good; and there are other
securities concerning which you have no DOUBT
They are certain to pay both interest and prlz-
cipal. Purchase these, il you can see no others
that you know a,e safe. Doubtless there are
olheIs just as good; but SO long as you are un-
aole to distinguish them with certainty from the
doubtful or worthless, it is wise to let them
alone. "But the securities we know to be good,
do not yield so high a rate of interest as the
othefs." This, also, is true; but you know them
to be safe, and you Go not know as much of the
others. Very often, a high rate of interest
means insecurity, and those whom it attracts to
make investments, ultimately lose much more
than they hoped to gain. For most people, and
especially for those whose means are compara-
lively limited, the most important consideration
Is safety; md this should not be sacrificed to
high rates of interest.
Should the Boston and Albany railroad com.
pany have occasion and authority TO issue new
six per cent. first mortgage bonds to the amount
OF 100000, they would he regarded as per-
fectly good in every respect; and they would be
taken readily by men who would refuse ten per
cent. bonds issued by some other less solvent
companies. The Boston and Albany road goes
through settled and busy country it has de-
Seoped great business, and is not in danger of
bankruptcy. Therefore its stock and bonds are
good beyond question; and it has not now to
deVelope business and talk, with limited present
receipts, Of future value. The Northern Pacific
railroad will ultimately be great highway of
commerce, aud have along its route populous
and prosperous communities. The wealthy
men who build it, will not be disappointed in
their expectation of its future value; and, as
they can afford to wait through the years of
weakness and deyelopment,-before the settle
ments on Lake Superior and Puget'S Sound be-
come great cities, and before the country along
the railway becomes well settled are sure
Of profitable returns from their investments.
They have "a good time coming" and can wait
for it without embarrassment. Persons with
limited means can not do this. They must be
sure of regular, uninterrupted payments of in
terest, and able TO sell their bonds at any mo-
ment, without loss. Therefore let them turn to
other securities, and take only what is sure in
these respects, and leave prospective values,
however certain or rich, to those who can most
surely profit by them.
Responsibility for the Railroad sIaugh.
ter.
Those New York papers which made haste to
say that the recent disaster at New Hamburg
could not be in any way attributed to want of
care or precaution on the part of the railroad
officials have, by this time, probably seen oo-