Juniata sentinel. [volume] (Mifflintown, Pa.) 1846-1873, 1871-03-01
(Ftom the HeW Fork Lndependent.
Some Questions Answered.

DENT:
Having few thousand dollars that shall
not need in my business, and being naturally
desirous of obtaining an invesimen which
will produce the greatest income consistent
with entire safety. am led 10 ask you the
following questions, which l shall be glad tc
have ycu answer. either privately or through
the columns of The INDEPENDENT
I. Do you think that. as rule. first mort
gage railroad bonds are a desirable invest
mcnt! In what do they differ from a first
mortgage on ordinary real estate!
,. notice you recommend Northern Paci-
ic seven thirties TO investors. Wy do you
regard them as unusually secure!
3. Is the Government pledged to the pay
ment OF these Northern Pacific bonds!
4. notice they are relhng at par. Ism I
this 100 high. Cannot good railroad securi'
ties be bought cheaper!
S. hold a few FIVE twenties do You be
lieve The Governmct will soon call for their
surrender!
6. What assurance have investors that
Northern Pacific seven -thirties will nDt here
after depreciate below the price at which they
are now sold, compelling those who wish to
realize on them to do so st loss!
To THE ABOVE The ISDEPExDENr ANSWERS;
Thus far the first mortgage bonds
of American railways have proved TO be
among the very safest securities. ln
proportion to amount. they have probably
shown a smaller percentage of loss in
interest and principal than any other in
vestment that has been accessible to the
people. Such has been the history Of
railway securities. Of course there have
been exceptional cases of fmismanagemen
and loss but far oftner have imperfect
titles. lapsed insurance policies. and
shrinkages of value render real estate
mortgages bad investments. There is
living principal underlying railway
bond; which applies to very few if any
other securities. This:
!. Usually the solvency of railroad
depends 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 dem
ser. In word, the income of railroad
land hence its debt-paying ability will
ordinarily keep pace with The growth Of
population.
=. A railroad. once built. rapidly
creates business which is to render it
profitable. 1t decelopes a carrying 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 a
strong corporation of capitalists aud
shrewd, energetic business men, whose
profits. financial standing. commercial
reputation, and official position depends
upon the solvency and success of the
road with which they are identified -
This powerful combination of private in
terests constitutes living power whose
efforts tend constantly to increase the
pro6tableness aud soundness Of the en-
terprise in whose interest they are en-
listed
4. Finally, after a railroad is built,
every dollar expended in making i'm
prov, ments and extensions, adding, new
facilities for doing business, and in Sc
curing valuable alliance with connecting
lines. adds to the security of its first
mortgage bonds, by augmenting the pro-
ductiveness and value of the property on
which those bonds are based. 1t is in
this way that a second mortage may in
crease the safety of the first. With
mortgages which rests upon improved
real estate in our midst the security
steadily deteriorates with time, az the i'm.
provements become less valuable. Rail
roads grOr better and more prosperous
nih age, and furnish a constantly in
creasing security for the debt creard IN
Meiir construction 1t is for these rea
sons that first mortgage bonds are among
the very soundest securities that can be
had
ii. The Northern Pacific Railroad has
a threefold solidity, which renders it II
nancially impregrable, l. 1t has for it's
broad and firm foundation a real estate
endowment of more than Twenty-Five
Thousand Acres of Land to each mile
of track-or an unencumbered farm of
500 acres Gin addition to the ordinary
and ample security of the road and its
traffic) to secure each 81 900 bond bought
by the public. 2. II has awaiting it a
business which we believe IS CERTAIN to
render it self-sustaining from the first
and to give it large surplus at an early
day 8. 1t is in the hands of mem Of
known and acknowledged integrity
whose financial standing, whose bust
ness sagacity and thorough experience
furnish a completeguarauty that econ
omy, energy, and fidelity will characterize
its management.
III. Government does not in form
guaranty the payment Of Northern Paci
fic seven-thirties but it iniirectly insure:
their payment by donating unreservedly
to the company sufficient productive lands
to pay them twice over The belt of coun
try in which this superb domain is situa
ted admirably combines the three Gle
ments essential to successful farming