Dodge City times., 1891-07-17


In every case national bankruptcy and
ruin were the result The same thing
would follow in this country. We can
not ignore history; neither can we de-
feat the laws of the Almighty. The
farme rs themselves would see the error
and abandon it This country is not
going to be ruled by any one class of
people-neither by the farmer nor
tradesman-neither laborer nor capital
ist; and any political party built upon
one class or interest will 60 down, as it
ought to- No. sir; the Farmers' Alli-
ance as a political power, will not stay.
It will soon serve its day and may do
good, but it will 60"
I'm the annual report of the Jarvis
Conklin Mortgage Trust Co. we find the
following:
The market value Of a railroad stocks
listed on the New York stock exchange.
shraiSk in value the enormous sum of AL
1856 below the market value of said stock
six months ago; and it is estimated that
within that period the market value Of all
stocks listed on the New York stock ex.
change deprecated In value ;6s0 900 00O. or
70 per cent of their value six months ago.
1t is with reasonable degree OF satisfaction
that the directors Of this company call atten-
tiOn to the fact that the market value of this
cOmpany's debentures did not come re-
duced in value one per cent Land. the basis
Of these securities, is ultimately also the
periods when it depreciates, It can never be
entirely wiped out, and must always finally
return to its true and normal value.
Here are some important facts,
which too many investors fail to real
ize. A hue and cry has been raised
against western mortgages, on account
of some losses that have occurred,
where investments have been unwisely
made; but these losses bear no COM
parison to losses that have occurred in
other classes of securities For in
stance, take the stock of the Atchisou,
Topeka & Santa Fe. Over $50, 900. 600
have been lost by shriDkage in that one
security, which is more than has been
lost on all the farm mortgages In the
west in the last twenty years Tho
stock of the Rock Island has fallen from
40 1886, to about 20 in 1891. or . total
loss of one half. We think the day d
near at hand when confidence in
western mortgages will be greatly inn
proved Prosperity is returning to
Kansas and the west Values are ad-
vancing. The bottom has been reached.
A reacti.n has begun. Liquidation ID
going on among the farmerA Tho
losses 50 fondly predicted by enemies Of
western securities will not occur"
The above naturally excites in the
mind curiosity to know Just what are
these ''company's debentures" which in
the recent crash and wreck Of specula-
tive values, did not become reduced in
value one cent"
What, then, are ''debenture bonds?"
I will tell you These loan and trust
and farm mortgage and in
vestment companies, etc, etc, invest
their capital in farm mortgageA That
Is to say, they have their capital out to
farmers at from 9 per cent. with .
to - per cent straight,
but as rule so as to average about
per cent to the farmer. from whom
they receive a mortgage and . five or
coupon bond for the amount
loaned.
Now mark: These bonds, - Q rule,
are not allowed to show . greater rate
of interest than Z per cent-indeed.
many companies limit their revealed
rate Of interest to per cent The
average rate Of o or 10 per cent Is OBJ
tanned in two ways; first, by taking .
sufficient amount of money out Of the
principle advanced to make the rate for
the term Of the loan amount to Q or 10
per cent; the money thus taken out Is
called commission. Second, by taking
q second mortgage to secure 10 notes
for the semi-annual payments Of 3. or
1 per cent ,as the case may be, upon the
principle sum for which the first mort
gage is given. This is called ''com-
mission" mortgage.
Having invested, say 500, 900, in this
receiving that amount Of first
mortgage bonds drawing an average Of
6 or per cent. tho next step is to de-
posit these bonds and the mortgage se-
curing them with a trust company in
New York, Boston or some eastern
money center. which trust company,
for a small per centage, guarantees the
payment of what are called ''debenture
bonds. such being nothing more or less
than the long time bonds of the company
to whom the farmers gave their mort
cages in the first place, but bearing I,
. or per cent less than do the bonds
given to them by the farmer.
These ''debentures" they sell for cash,
thus receiving another 800. 900 in money
to loan out to the farmerA
It will be seen ut q glance, that this
system enables loan company to du-
plicate their capital as many times
Is they please, such duplication
being limited only by the de-
mand ON the part of the farmers for
loans upon their farmA The profits
TO the loan company are
found. first, In the commission received
from the farmer above the rate Of in
terest shown IN the bond; second. in
the margin or difference between the
rate Of interest received from the farm
er upon the bond, and the rate paid In
vestors upon ''companys dedentures." {"
There Is NO doubt but that Jarvis-
Conklin 4 Co have issued and outstand-
ing debenture bonds amounting to
many times their entire capital, while
the trust company which guarantees
the debentures amounting 70 many
times tksr capital; - that IN the Anal
aaalysis the only real base o. security
for these debentures-which ''amidst
khe crnah and ~racle N All tia nei,>v,