Some Questions Answered

From U:c New York Independent TO T1IW COMMKUCIAI, iiDIÏOU OK 1HE 1SDErKNüENr : Ilavins; a few tliousand dollars that I sliaU uot ueod la wy business, and being iiatuïalïy desirons of obtainlug an Invcstnvjut ivhlch wül produce thn greatost In conrc cotl9isteiit wlth enlire safety, I am hul to ask you tlie following questious, whlcU I shali.be glad to bave yon aüswer, eitlier piivalciy or liirough tlio columus of Tiik Independ 1. Do you think that, as a rule, first ïiiartgngti raüroiul bor.ds are a desirable InvesMlsra f Iu wl'at do tlicy Uiirer froiu a ü.i-L luoftjage ou ordiuary real estáte? 2. 1 1 i-Dcommoud Northern Pacilio scvotltMrt'n-s to tnvestovs. Why do yon regard theitl as unusually secure ? :!. Is" the Government pledged to the paymout of these Norlhoni l'aciüc bouds? 4. I notice tliey aro selliag at par. Isn't thls tQO hlgh ? CauDOt good railroad securlties be bought chcaper? 5. I hold a íew flvetwentics: do you believe the Goverument wlU soon cali for tbelr wrroodct ? 6. What a8suranoe have iuvestors that Novthern l'acillc seven thlrties wlll not hereafter deprecíate below the prlce at wlnch they aro now sold, compelliiiK those who wish to realize ou them to do so at a loss? To tilu above Tue Indefbndbnt an8WKR8: I Thus far tho first mortgsge bonds of American raílways have proved tobe nmoDg Ibe very safest eocurities. lo proportion to aniount, they Lave probably shown a smaller percontago of loas in interest and principal than any other invcstmeut tbat has beon accesible to th? peoplo. Such lias been the hi$tory of railway soourities. Of course there have been.exccptioual cases of múnianaLomünt and loss ; but far oftencr havo imperfect titles, lapsed insuranco policios, and shrinkages of valuó rendered real estáte mortagos a bad nvestment. Thero is a living principie underlving a railway boud, whiofa npplics to very few il aoy ütlier accurities. This : 1. Usually tho solvoncy of a railroad dependa mainly upon its traffic; and, as a rale, tliat trullio steadily increascs as the roid grows older and the population nlon Ha routo bccames richer auddeuser. Ia a word, tho income of a railroad (and heneo its debt-paying ability) will ordiaarily keep paco with the growth of population. 2. A railroad, once built, rapidly ereates a business which s to ronder it profítable. It develops a carrying trade which did not before exist, and which graws much faeter thau tho tributary population aereases in number. 3. A railroad usually has back of it a strong Corporation of capitalists and ehrewd, energetic business men, wboso proüts, finaocial standing, commercial reputation, and cffioial positions depend upon the solvency and suocess of the road with which they are identified. This powerful combination of private intereats oonstitutes a living power whose efforis tend constantly to ineroase tho profitablenees aud soundness of the enterprise ia whose iuturest they are eulisted. 4. Fically, after a railroad is built, every dollar expended in niaking improvcmouta acd extensión, addiog ncw facilitios for doing business, and in scouring valuable aüiances with connecting lines, adds to thu gecurity of itB first mortgago bonds, by augmenting the productivenees and value of the property on wbiüh those bonds are basod. It is in tliis way that a second mortgnge may increaeo the Bafety of tho fint. "VVttb mortgagcs whioh rest upoo improved roal estato in our midst tho security steadily deteriorates with time, sa the mpvoveuients become less valuable. liailroads grow letter and more prosperous with age, andfurnish a consíantl; in creasing securityfor thedeht crealeá mtheir eonstruction. It is for these reasons that firel raortgage bonds are araocg the very soundest eecurities that can be bad. II. Tho Noithern Paoifio Eailroad has a throofold solidity, which renders itfinancially improgoable. 1. It has for its broad aod iïrra foundatiou a real estat endowment of moro than twentytwo thousand acres of fcrtile Lacd to each milo of track - or an uneucumbercd farm of 500 acres (in addition to the ordinary and ampie security of the road and its traffic) to secure each 1,000 bond bought by tho public. 2. It has Dwaiting it a business wbich wo believe is eertain to ronder it self-sustainingfroin the fint, and to give it a larga Eurplus at an early day. 3. It is in tho hands of men of known atid aoknowledged tegrity, whoso finaueial etdcding, whoee business sagacity and thorough esperience, furnish a oouiplete guaranty that econmy, euergy, and fidolity will charucterizu its management. III. Government does not in form guaranty tho payment of Northern Pacific seven-thirties ; but it indirectly insures their payirent by donating unrescrvüdly to tho coinpany scffiuient produoiive lands to pay them twico over. Tho belt of country in which this superb doicain is eituatcd adinirably combines the three elemants essential to BucocBsiul farniicg - viz : a naturally lich eoil, a mild Uníate (tho latitudo being about two degrees bel av Paris, and kíx below Londen,) and sufficient rainfall. IV. When there is no difference in poiut of Fafety, the comparativo market valuo of vtirious tecurities is mainly de termined by their profitablaness. In this view Northern Pacific gold seven-thirties sülÜDg at par in cnrreucy, are by far the cheapf et investmect of which we have knowlcdgo. Kegarded as a source of income, thcy are cL'eapor at par Ihan a nis per ceut gold bond at 82, and cheaper than a sis per cent. currenoy boud at 7-1. In other words, ono hundreddüllaisiüvcsted in NortherD Pacifies ut par wül produce a largor income than the samo amouut invested iu a six for cent. gfld sueurity at 82. V. We regard it as highly probable that a large proporiion of the present bolders et' Govercment bonds will bo compelled to give them up within a comparativoly eh&rt timo, and accept therefor cash payracut or a new five per eent. bond. Everytliiug now iudicates that the Government will soou be ablo to fui4 tho bulk of its iive-twenties at a ljwer rale of interest. Henee we have uaiformly adviBed our subecribers to con velt their üovernment bonds into EOtne Drít-clasB railroad sucurity, beving equal eafety and grcater permaucnoo and procUictiYcuesB. VI. Of coursö, all Becuritiee, even these of the United States, are liablo to occasional sligbt fluctuatioas in curront price - t!io rcsult of outeido circumstanoes, and not cf nny chango iü real valuó. But. the 6fraa canses whioh uow rendcr Northern Puciflo seventhirtics an exetptionally ürovj and deHralls eeeurity w 11 naturaliy BUBtuio tliem iu the omrbet so Wiat thosu wbio wish 10 cauvert thoir bonda ÍBtO casli can do so at auy timo Without loes, Iudeed, with their suparnbucdact socurity tbdir hijh rato of inttros , and tho prcvisi o Lat tho-y will alwa s bc recoived al ton BOT cent, premium 11 pajmtDt l'cr the Ccmpony'ó Iand, 7 8-10 per cent. Northern PaciLc Tou is a;c far moio likely to go ; abtff mr íd prieo tlau tü fall bolow. j