New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-07-02
u0FTG4GES SHOULD Not BE SOLD.

4 novDu0LprR PROTECTS AGAINST WHAT HE
CONSIDERS a SACRIFICE OF HIS INTERESTS.
To the Tll;or Of The Tribune.
SIR. Permit me- 10 call your attention % matter
which viii be OF great interest 10 such u your
readers tanl there are doubtless many oi them
who have invested IN the various companies Issuing
d-bcniur- bonds secured by mortgages placed In
the hands OF trustees. These de5eniur's are
usually issued In sums OF 500 AMI $1,000 each. In
series 81 tlooo0 each series being separately Sc
cured hv deposit with some trustee. usually one
% the large trust companies 81 nm equal or some
what greater amount ~ hrst mortgages upon I'M
proved real estate certified t. have been appraised
AZ not less than TWO ana onc-hAf times the amount
Of the mortgage.
These mortgages are held in trust for the benefit
Of the holders Of the debcnturcs, and In case 81
default on the part OF the company issuing them
the trustee * authorized collect or sell the mort
gagrs aud use the proceeds to redeem the de-
bcnturos
OF course such dob ,n,ures n made. issued and
their terms carried ont IN gool faith, would be
very desirable securities for Investment, corpin-
ms eis' % collection 90 Interest ara pr'nc.P" WIZ
good real estate security available IN case Oh me
failure 81 the COMPANY issJi"s them. Mllii"hS Oh
dollars Of good and millions o., dollars OF paI cG
hcnturss OF the kiul describe hav" been lSSu'I,
Very many widows and orphans ar" no" deprived
~ tbr,r irc,mes bv reason of the failure Of com
pani~- issuing them. ann anything anectins, th,se
securities Is Il matter or very Beheral Pu'"' III
Two or three years ago the Jarvis Conkn Mort
gage Trust Company then considered one OF tl9
Le.t of th. companies issuing debcntures based
upon mortgages On farms AMI lands ar me NeSI,
advertised very largely and became one OF many
thousand investors / am AFRAID We shal nave 10
Say victims. 1900 J.,
Whrn on September !. 1893 this company de-
faulted In the payment OF interest On us deDrntureS
| supposed hat the trustee would proceed 10 col
Loot me intercs, upon the real estate mortgages
he'd by them security, ana the principal also hS
the mortgages became due, distributing the pro
cccls pro rata t. the holders ot the depehture7.
This although the process wouIi tikS yeats W
carry ont in the end might De expected TO return
II fair proportion Of the amount OF the deD"ntures.
To my astonISlrnent | IND 10y an advertisement
I'm The Tribune II the 18th inst. that the trustee
the Mercantile Trust Company or ms city, pro.
auction In tho Real Estate Exchange In THIS Guy on
July 49, These mortgages vary n amount rom
500 10 10000 (hrlng mostly OF the smaller hHiountp
and are almost entirely upon farms ana real es-
tate in the Western states ana TERRITORIES
Now the sale OF ouch securities In such way
would be a mere farce. What can frequ"nters OF
the Real Estate Exchange know OF the valne 81
a mortgage OF $1,000 on ITO acres OF lanf IN South
Dakota. although such "A security may ac'udlS ~
absolutely good? . , 49,, ,o,. -,
tho mortgages for "A fraction OF their value, 10
would constitute outrage upon inc rights Oh tns
dctcnturr holders, which 90 not pcH"Ne any court
II would 80 strike a blow at the whole system
of dcbenturcs based upon real estate mortsd8es' III
the issue OF which good and solvent companies are
engaged. and cause universal ulstiuSt VI SUN
invesfmcnts and such debenture bonds, instead OF
being comparable with first mortgage railway
honds will II their holders can be fc.ced 70 give
IN their securities In the manner described lose al
attraction FOR investors, and rank win those Sc
curitlcs the holders Of which be frozen out or
compelled to submit 10 rcVo"S'. s"'
time n r NiiiLDS'
Ncw-Yorl June % 1894