Loading ...There is little doubt that the years 1874-5 will witness some new form of mania for the British Investing Public ; and it is in the belief that more attention will be directed to the securities of America, that this small work has been compiled.
English railways have been carried to such a high price that little over four per cent, all round, is yielded to the investor; and public confidence has been so much shaken by the recent repudiation, or admitted inability to pay dividends by such states as Honduras, San Domingo, Spain, that it is doubtful if any but the best form of Foreign Bonds will attract our money. Doubtless many persons who have lived for years past upon the enormous interest paid for loans by such countries as Turkey and Egypt, will still put their savings into risky securities ; but the late fall in value of their holdings must soon tell, and less interest with less danger will be sought for.
Several books on the subject of American Bonds and Stocks have been already written ; but none, I believe, are of much use unless to those who thoroughly understand the nature of such securities, and who, consequently, merely have occasion to watch the incomes and expenditure of their respective stocks, as the English investor watches our own railway receipts when published from week to week. It should be remembered by those who look for investments, that whilst in England our Government stocks yield but some 3 per cent, per annum, those of the United States yield nearly 6 per cent. ; and this shows almost more than anything else the difference obtaining in the two countries as regards the value of money. Money is, of course, a commodity regulated by the laws of supply and demand ; and whilst there are at this moment millions waiting for mortgages upon land at even 4 per cent, here, almost double that rate would be given upon equally good security in New York, and perhaps quadruple in San Francisco, or towns of equal importance. In fact, so great is the demand for cash in the Far West that undeniable security is often offered, even in San Francisco itself, which yields 30 per cent, per annum.
This being the case, it of course follows that there must be many judicious investments to be found which, whilst absolutely safe, will give a far greater interest than can be expected here, where money is so abundant ; and although some few American States have, it is true, failed to fulfil their obligations, most of such defaults have happened only to America herself, and the losses consequently fallen upon the Americans themselves. Much caution should, of course, be exercised by the would-be lender; but, generally speaking, our London – American houses are of too high standing for us to doubt that a few words with any of them will suffice to show what is good and what is not. In all cases, however, an investment should only follow careful investigation. Any American knows how to discriminate between bond fide stocks and the reverse, in the same way that an Englishman knows the difference between our London and North Western and North British stocks. Many lines, such as Erie and Atlantic and Great Western, are in the hands of speculative cliques, and, of course, are consequently of little use for investments, although dividends may be paid regularly.
In the following pages will be found only a limited number of securities, but nearly all are believed to be perfectly sound. In the case of the two lines quoted above, viz. Erie and Atlantic, a brief statement is given, for although for years past the stocks of these two lines have been a vehicle for gambling here and elsewhere, some people imagine that under the new management both may aspire to the high rank they originally held as sound dividend-paying securities. Erie is one of the main arteries of the railway system from New York, embracing nearly 1,000 miles of rail, and must, they say, with proper care some day or other pay large dividends. Whether that period is at hand, time can only show.
This work is necessarily incomplete, but, should the public receive it with favour, a second and greatly improved edition will be issued ; and the compiler solicits his readers to kindly notify any errors, or offer suggestions for improvement, assuring them that their hints shall have his careful attention.
Perfection is not claimed for this work ; but the information is presented in a readable form, and has been selected from various sources, unattainable to the ordinary public.
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