INVESTMENTS IN AMERICA.
Sin—With a high appreciation of the candour, courtesy, and intelligence of the notice with which you have honoured my pamphlet on "American Securities " in your journal, I beg respectfully to observe that, in one part of the review, you appear not to have altogether carried my meaning with you. Will you permit me to explain ?
You allude to the Illinois Central Railway and its difficulties as a proof of the insufficiency of the basis indicated by me, whichyou describe to be the possession of a large landed estate. But this is only a part of the basis which I recommend, and the shareholders of the Illinois Central suffer be- cause the other and equally indispensable part—contiguity to tear et—was not duly considered, whilst the railway managers were contracting their improvident obligations. More than once in the course of the essay I have laid down the axiom, that the mercantile value of land must be governed by its proximity to market, and that heavy and expensive undertakings carried out in new and remote districts could not (especially when burdened by the effects of financial mismanagement) be expected to pay, even when supported by landed property, until local markets spring up, as they cer- tautly are springing up. As you have mentioned the name of a celebrated public man, 'I may be allowed to observe that his disappointments have, beyond all doubt, arisen from the fact that he (like many other men of sagacity and experience) must have overlooked the great importance of the second (but not secondary) condition specified by me. It must be that, in contemplating the fertility of the Illinois Company's territory, he forgot the heavy drawback involved in the expense of transporting the enormous produce to a place of adequate demand.
You will therefore perceive that the alternative of a line, with trade and population but no estate, and a line with an estate but no trade or popula- tion, scarcely describes my proposition. My emphatic advice to British investors is, not to be satisfied with one without the other; and both should be accompanied by a reliable guarantee for good management. These con- ditions alone can be said to embrace real safety and security.
A statement appearing in the Spectator commands, and has long com- manded, influence in the most intelligent circles, and that influence, I know from experience, is not confined to these islands. I have therefore ventured to trouble you with this explanation, and
I am, Sir, your most obedient servant,
AN ANGLO-AMEILICAN.
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