The Jeffersonian. [volume] (Stroudsburg, Pa.) 1853-1911, 1873-09-25
NORTHERN PACIFIC BONDS.

has caused feeling of anxiety to pervade the
Northern Pacific Bonds, and few facts in re-
lation to the security of these bonds may be |
interesting to those concerned.
While there can be no doubt that the sus-
pension of this prominent banking firm-the
financial agents of the Northern Pacific Rail
road Company, is great blow and serious
inconvenience to the company, yet this ough'
not to, and does not affect the security which
the bond holders have for the money 'hey
have invested in the company's bondS'
If the bonds were secure before the suspen-
sion they are secure nor, for the company owe
jay Cooke & CO., and consequently no money
can be lost by the failure of Jay Cooke.
The loss sustained in losing the support OF the
influential house of Cooke d Co., and the in
convenience of finding others to negotiate
bonds in future, we do not pretend to under
estimate 1t is very great, but as before stated
does not affect the security upon which the
money on the bonds was obtained.
Let us look at the present state of the road
! The company is entitled to receive from the
Government for every mile of road constructed
through the States 1880 acres of land, and
25,600 acres through the territories patent
for which is to be granted them at the compile
lion of every % miles of road which is finished
| in substantial manner.
There is now completed through Minnesota,
Dacotah and Washington territories, and
in working condition over 500 miles of road
which entities the company to receive in the
neighborhood of 100000 acres of land, a
patent for which has been granted.
The company has expended in constructing
and equipping these 500 miles of road Sl5,
S04,37I.22.
The total Indebtedness of the road is the
$40 per cent gold bonds issued,
in all to $50, 100000. To secure the holders of
these there's isa mortgage covering the &c, 100000
acres of land above mentioned, the road-bed
and tracks, all rolling stock and other equip
ments,-all engine houses, machine shops,
depots, water stations and other building, as
well as all rights, franchises, privileges, &C.
that belong to the road, in all, property worth
at least S450O0,0O0.
The Government price for land and the
price below which the company is restricted
from selling is $3.50 per acre, but the lands
already sold, have netted on an average
. between s. and Sc per acre. Supposing the
land to be worth S3 the 100000 acres
would pay of all the bonds, and leave the COM
pany the road free and clear, without one dol
lar of debt upon it.
This looks as if the bonds were well secured
But TO make it still better for the bond holders,
the company agrees and it is so stated on the
bonds, that any holder of bond can buy of
the company land, at the lowest cash market
price, and ray for it with his bond at par and
interest BY subsequent arrangement the
bonds are made receivable for lands at ten per
cent premium.
! Now while it is possible for the holder of a
! 81 900 Northern Pacific Bond to buy 81, 100
worth Of lands on the line of a working rail-
road and use his bond in payment, it would
! be worse than folly for him to consider that
bond insecure, and sell it below its face value.
| There is no man who has desire TO retain
his property, and is sane, who will mortgage
| his property for less than its value and give
the holder of the mortgage the privilege of
buying at the lowest cash market price, and
handing over the mortgage at 10 per cent
premium In payment. Yet this is what the
Northern Pacific Railroad Company does, and
can afford to do on account of the unparalleled
and more than princely gift which the Govern
ment has bestowed upon them, in the land
grant alluded to, amounting in all to over So
100000 OF acres.
What mortgage anywhere can be more
secure and satisfactory than this? and what
security is there that is equal to a mortgage?
So far then as security is concerned We think
the holders of Northern Pacific Bonds may
rest easy.
| But no security is satisfactory unless the
holder Of it draws interest, and the question
therefore naturally arises, will the company be
able to pay the interest on their bonds?
In answer to this we can only say that The
500 miles of finished road is doing better
business than was anticipated, and will yield
something over the expenses of operating it,
towards the payment of t his interest.
In addition to this we believe that the road
will be rapidly pushed forward to completion.
There is such an enormous amount of money
in the project, accruing from the Government
land grant that there will be no difficulty in
finding men ready and willing to put it
through, even though Jay Cooke & Co. do not
recover sufficiently to do it.
In order to accomplish this, more money
must be raised on the company's bonds, and it
would be folly to put more bonds on the
market, unless the interest on the present ones
is promptly paid. In view of this fact we
think, every exertion will be made by the
company TO pay the January interest on the
day it is due, and to keep on paying the inter
est promptly and punctually on the first days
of January and July, at least until the road is
completed and the company has borrowed all
the money they want. .
Taking then into consideration the securit,
Of = ba houdS with tho cf