country, where it is possible to build long stretches of road, practically without curves and appreciable grades, all conditions incident to a low operating cost are favourable.

High rate of speed over privately owned rights of way is, where the natural conditions are favourable, resulting in the carrying of through passengers for long hauls, and the transportation of freight to very profitable ends. It is continually bringing electric railways into stronger competition with the steam roads. The introduction of dining, sleeping, and drawing-room cars is making one system of transportation more like the other. The filling in of small links of road here and there is furnishing the means for long distance service, and, withal, the electric railway situation is constantly shaping itself upon a permanent basis and upon different lines, capable of a reasonable certainty as to results.

The modern inter-urban electric railway, which has the best chance for a successful future, is the one which operates over a private right of way, and approximates in its character the construction and equipment of the standard steam railroads.

The inter-urban electric has a distinct function, and it is predicted that the ultimate outcome will be that these roads will do most of the short haul passenger business, and leave to the steam roads the long haul and freight. And, furthermore, that many electric roads feeding into, or parallel with, the steam roads will eventually be absorbed by the latter.

It is a peculiar fact, and recognized by many, that the inter-urban road parallelling the steam road does not result in a reduction of the passenger business of the latter, but seems to create a new business for itself. In other words, it is recognized that the "trolley lines" "breed" business.

Much information and experience have been gained of late, and the roads now being constructed are on a different scale and less likely to come to grief than the earlier ones. Judging by this, it is reasonable to suppose that new properties, built according to modern methods, and serving populous communities, will prove desirable and profitable investments.

The question of equipping steam railroads with electrical power has received consideration, as is evidenced by steps taken in that direction by the New York Central & Hudson River, and the New York, New Haven & Hartford, and other railroad companies.

Some of the things to consider in the selecting of a street railway security have already been set forth, to which may be added:

The length of franchise, which, in the case of a bond, or other security having a definite maturity, should always outlive it. (See "Franchise.") The earnings should be given careful consideration. Proper charges should be made each

year for improvements, and assurance had that the road is being maintained in a high state of physical condition from its earnings, and that no new indebtedness is being created to pay for what is strictly wear and tear. (In this connection it may be well for the reader to consider the matter under "Depreciation.") When a property of this kind is first constructed it is usually in a high state of efficiency, and the road and equipment do not begin to show visible increased cost of maintenance for the first few years, thus permitting it to be operated at a lower cost than later on when the wear and tear will become more apparent and replacements necessary. A road giving service where the riding is more or less for pleasure, rather than for necessity, is also likely to show unduly large earnings at first, owing to the novelty afforded the patrons. Thus, the earnings of a new road should be studied from this point of view.

The power is all-important, whether it be purchased or furnished from the road's own plant. The question is: If furnished by water-power, is the power sufficient for service at all times of the year, and has provision for the future been taken into consideration?

In all such matters the opinion of a well-established expert engineer should be furnished, and his report should not only cover the physical condition of the property, but should enter with care into the business tributary to the road. In considering this, the reader is asked to turn to the subject " Auditor," which treats further upon this matter.

The net earnings of a company ought to be, at least, double the interest charges; the mortgage ought not to exceed 75% of the replacement value of the property; a sinking fund is advisable, which it is well should become operative at an early date after the issuance of the bonds.

Electrolytic Copper. That which is purified by suspending it in an acid solution and by an electrical current disintegrating it and re-depositing it upon a plate without the impurities. This copper has high electrical conductivity, sometimes 102% of that attributed to chemically pure copper. It is not quite as strong as the best "Lake copper."

Elevator Certificates. Same as "Elevator Receipts."

Elevator Receipts. (See "Warehouse Receipts.") Practically the same thing, only issued by warehouses for the storage of grain, called grain elevators, evidencing the storage therein of a certain quantity of grain.

Elm River. Elm River Copper Co.

Emergency Currency. A form of money created to fill the needs of a sudden demand, and for a brief period only; a form which can be put out and withdrawn with equal rapidity;

money which can be easily retired when the emergency for which it was created has passed. During the Civil War the Federal Government issued some short time one or two years notes bearing interest, which, by some writers, are considered "emergency currency." The Imperial Bank of Germany is authorized to issue an emergency circulation to any extent it pleases in excess both of its authorized circulation, provided it holds in cash (See "Bank of Germany ") one-third of the total issue of such notes; but it must pay the Government an annual tax of 5% upon such excess of notes.

Employees Liability Insurance. See "Liability Insurance."
Endorse. See "Indorse."

Endowment Life Insurance. See "Life Insurance."
Enforced Liquidation. See "Liquidation."

Engagements. "His engagements amount to $50,000," meaning his promises to pay or contracts to deliver call for that amount, or value.

Engineer's Certificate. This is a statement over the signature of an engineer as regards the physical condition of a railroad or other property. This is further explained under the next subject, but the wording of such a certificate should be in form so as to show beyond peradventure that exhaustive examination has been made and that all construction was proper; that power, for example, is sufficient for the present needs, and likely to do so for reasonable future requirements; that, if a water-power enters into the proposition, the supply of water is sufficient at all times, and, if not, that proper provision has been made for auxiliary power by the use of coal, for example; and so on. In fact, on an "engineer's report depends so much that too great pains cannot be exercised in studying into such a report and ascertaining if all reasonable care and precautions have been taken. Let the engineer be one of good repute and standing, and let his report be sufficient to set forth in detail all necessary information.

It has become the custom for railway and other public service corporations to allow for an extension of the property by a further issue of bonds up to a certain rate of the actual cost for such an extension, all based upon " engineer's certificates." It is, therefore, of extreme importance that these certificates should properly show the expenditure of this money. It is not a bad idea that an affidavit, signed by the president and treasurer of the company, should go with such reports, showing them to be true.

Engineer's Report. A report by one who by previous education and experience is competent to investigate the physical

condition of a railroad, electric light, or such a property as he may be employed to report upon.

In purchasing at first hand from a corporation desiring to sell its obligations, it is customary to employ an expert engineer to report upon the physical condition of the property belonging to the corporation. Let us take, for example, a street railway whose bonds have been offered to a banker for purchase, and who has contracted for them subject to the usual conditions as to finding everything as represented. Among other experts, a competent engineer is employed to thoroughly examine the machinery, road-bed, ties, rails, overhead construction, rolling stock, etc., to find if it is thoroughly up-to-date and capable of fulfilling the demands likely to be placed upon it. In this regard, let the investor, among others, bear this point in mind: that the most favourable report from the best engineer in the country certifying to the conditions of this street railway does not argue that its bonds will prove to be a safe investment, because no matter how good a road is from a physical standpoint, there must be sufficient business to warrant its existence, and to provide for its proper maintenance as well as to safeguard the interest and principal of the bonds. It is better to have, perhaps, a poorly constructed road running through a section furnishing an enormous amount of business, which will provide earnings to not only safeguard the bonds, but enable the road to be later brought up to a proper physical condition, than it is to have the best road which engineers can construct running through a country with inadequate business tributary to it. See also last subject.

English Money Table:

4 farthings

12 pence

1 shilling = 48 farthings

20 shillings = 1 pound or sovereign = 240 pence = 960 farthings 21 shillings = 1 guinea

Envelope. United States Envelope Co.

Equipment. This is a railroad term and refers to all rolling stock; its locomotives, cars, snow-plows, hand-cars, etc. Equipment Bonds. See " Equipment Trust."

Equipment Certificates. See "Equipment Trust."
Equipment Notes. See "Equipment Trust."

Equipment Trust. It is a common practice among railways, in buying cars, locomotives, etc., to mortgage the same and sell securities secured by this mortgage to raise money for the payment of the equipment. These obligations are known as "equipment bonds," "equipment notes," "car trust certificates," "equipment trust certificates," etc.

A typical example is that of the Southern Railway which issued June 1, 1904, 41% Equipment Trust Gold Certificates. One hundred and twenty passenger and freight locomotives and 2,500 cars were mortgaged to secure these certificates.. They are the direct obligation of the Southern Railway Co., in addition to being secured by a first mortgage upon the equipment named, no part of which should be released until the entire issue is paid.

The safety of such issue depends largely upon what proportion the issue bears to the actual cost of the equipment, and whether or not it is to be paid off fast enough to prevent the equipment mortgaged depreciating in value below the amount of the certificates outstanding; that is, equipment of this kind wears out very fast, and the certificates should, therefore, mature with that idea in view. (See also "Car Trust.")

This form of short time obligation has been looked upon favourably from the investment standpoint. It is stated by one financial writer that no default in this country has ever yet occurred in these securities. They have commonly been issued up to about 80% of the cash value of the equipment, and in serial form, payable about 10% annually.

Equity. The common meaning in reference to investments. is the value in the property over and above its indebtedness; for instance, to the stockholders of a railroad belongs its equity." In the case of a mortgage upon real estate, the value of the property above the mortgage would be the "equity."

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Erie. Erie Railroad Company. Formerly the New York, Lake Erie & Western R. R. Co.

Erratic. A very uncertain condition of prices; first up and then down. Under these conditions the stock market is said to be" erratic."

Escrow. The common use in banking; anything is placed "in escrow" when, by mutual agreement between two parties, it is placed in the hands of a third party, to be held until the fulfilment of some condition, when it shall be delivered or returned in accordance with the agreement.

Even. A "broker is even on a stock when he has contracted to receive and deliver equal amounts of the same stock with another broker; that is, inasmuch as he has sold, for example, one hundred shares of Union Pacific to Robinson, and later in the same day has bought the same number of shares from him, there is no necessity of either making a delivery. A settlement for the difference in prices only is called for. This term is much in use in connection with "stock exchange clearing-house" matters, as is explained under that subject.