The Middlebury register. [volume] (Middlebury, Vt.) 1850-1882, 1871-03-07

o From the New York Lndepcndeu,
Some Questions Answered.
q TO THE COMMERCIAL EDITOR OF THE INDE
PENDENT:
/ Having few thousand dollars that
s shall not need in my business, and boin,
2 naturally desirous of obtaining an invest
4 ment which will produce the greatest in
come consistent with entire safety, | an
t led to ask you the following questions
. which l shall be glad to have you answer
, either privately or through the columns
of The Independent
, l. Do you think that, as a rule, frs
mortgage railroad bonds arc desirabl,
investment In what do they differ from
a first mortgage on ordinary real estate
2. notice you recommend Northern
Pacific seven-thirties to investors. VIII,
do you regard them as unusually secure /
3. Is the government pledged to the
payment of these Northern Pacific bonds.
4. notice they are selling at par
Isn't this too high Cannot good rail
road securities be bought cheeper?
5. | hold a few twenty-fves do you
believe the Government will soon call fol
their surrender?
q. What assurance have investors thai
Northern Pacific seven -thirties will no,
hereafter depreciate below the price al
which they are now sold, compelling those
who wish to realize on them to do SO at q
loss ?
TO TILE ABOVE THE INDEPENDENT ANSWERS
L. Thus far the first mortgage bonds oil
American railways have proved to be
among the very safest securities. In pro.
portion to amount, they have probably
shown similar percentage of loss in in.
terest 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 mismanagement
and loss but far oftener have imperfect
titles, s,lapsed insurance policies, ,and shrink
ages Of value rendered real estate mort.
cages bad investment. There is liv-
ing principle underlying a railway bond
which applies to very few if any other
s.ss-;.;es. This:
L. 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 becomes richer and den.
ser. In 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 built, rapidly cre-
ates business which is to render it pro.
fitable. 1t developes carrying trade
which did not before exist, and which
grows much faster than the tributary
population increase in numbers.
3. A railroad usually has back of it a
strong corporation of capitalists and
shrewed, energetic business men, whose
profits, financial standing, commercial re.
putation, and official positions depend up
on the solvency and success of the road
with which they are Unidentified. This
powerful combination of private interests
constitutes living power whose efforts
tend constantly to increase the profitable
ness and soundness Of the enterprise in
4. Finally,after railroad is built, eve
ry dollar expended in making improve
ments and extensions, adding new facili-
ties for doing business, and in securing
valuable alliances with connecting lines,
adds to the security of its first mortgage
bonds, by augmenting the productiveness
and value Of the property on which those
bonds are based. 1t is in this way that
second mortgage may increase the safe
ty of the first. With mortgages which
rest on improved real estate in our midst
the security steadily deterioratcs with
time, as the improvements become less
valuable. Railroads grow better and
more prosperous ,oih age, and furnish a
constantly increasing security for the
debt created IN their construction. 1t is
for these reasons 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
financially imprcgnablc. /. 1t has for its
broad and firm foundation real estate
endowment Of more than Twenty-Five
Thousand Acres of fertile Land to each
mile of track-or an unchcumbered farm
Of 500 acres lin addition to the ordinary
and ample security of the road and its
traic) to secure each 81 900 bnnd bonght
r by the public. 2. 1t has awaiting it bus
iness which we believe is certain to rend
, er it self sustaining from the first, and tt
give it large surplus at an early day
3. 1t is in the hands of men of known ant
f acknowledged integrity whose inancia
standing, whose business sagacity anC
E thorough experience, furnish a complete
, guaranty that economy, energy, and fidel
! ity will characterize its management.
. Ill. Government does not in form guar
anty the payment of Northern Pacif
q seven-thirties but it indirectly insure
their payment by donating unreservedl
to the company sufficient productive lan'
b, to pay them twice over. The belt of coun
try in which this superb domain is situa
tcu duuiIapiJ COinuiuCo tuc tHlCc ciciiCut
essential to successful farming-viz :
naturally rich soil, a mild climate 9TH
latitude being about two degrees beloy
h Paris, and six below London,) and sufie
!, lent rainfall.
= w. When there is no difference j
, point of safety, the comparative marke
! value OF various securities is mainly dc
! termined by their proftableness In thi
), view Northern Pacific gold seven-thirtiei
selling at par in currency, are by far tn
cheapest investment Of which we hav
q knowledge. Regarded as a source of ii
l. come, they are cheaper at par than si
l. per cent gold bond at 81, and cheape
+, than a six per cent. currency bond at "A
u In other words, one hundred dollars il
G. vested in Northern Paciiic's at par wi
). produce larger income than the sam
-. a