the so-called "Philadelphia Plan." This is a term which is often used, but not always understood by the average investor. Briefly, it is as follows: When a railway gets equipment, some third party, a corporation or perhaps an individual, buys the equipment from the company which manufactured it, and then leases it to the railway company. The purchaser and owner of the lease next assigns his rights to a trustee, and this trustee, usually a trust company, issues and sells equipment trust certificates secured by the equipment itself. The railway company pays rent for the use of the equipment, and such payments are used to pay the interest on the outstanding obligations and meet the maturing trust certificates as they fall due. Usually it is provided that the first payment made by the railway company shall amount to from ten to twentyfive per cent of the original cost of the equipment, so that there is a substantial equity for the certificates established at once. The title to all the cars and locomotives purchased in this way is vested in the trustee, and this fact is painted or stamped on the rolling stock itself. It is possible to find cars in almost any freight train with a legend to the effect that they are the property of such and such a trust company stenciled on their sides. No part of the equipment belongs to the railway company until the total amount due is fully paid. Of course railway equipment deteriorates every year; but this does not mean that the equipment trust obligations are not so well secured on this account, for it should be borne in mind that a certain proportion of the notes is being paid off each year or retired by a sinking fund; the amount of the outstanding obligations is therefore being constantly reduced and the security for them maintained in ample amount.

Sometimes the equipment trust notes are issued and sold by the railway company itself, but this course is the exception rather than the rule. In all cases, however, the equipment is the security for the notes, and the agreement under which the notes are sold usually requires the railway company to make all necessary repairs to the stock and keep it in proper running order.

It is plain to be seen that if a railway is to do business it must have cars and locomotives. Tracks in themselves are of little value unless freight and passenger traffic pass over them, bringing in revenue to the company. Operating equipment is therefore essential to its existence as a going concern. This fundamental fact is so generally recognized that interest due on equipment notes and the principal of the notes themselves have in numerous instances been paid regularly even when a railway is in bankruptcy and interest on its first-mortgage bonds is in default. The reason for this is a legal one. Under the Philadelphia Plan the railway does not own this equipment, but merely leases it, and the courts very generally recognize expenses of this kind and authorize the receiver or receivers, as the case may be, to meet them. This is due, of course, to the fact that the courts maliza the truth of the statement made

TRUST COMPANY SERVICE

HE ensuing months and years will present

THE

many opportunities but more obligations to the progressive trust company. Its services must be made as intensely practical, helpful and personal as possible. The giving of dependable counsel must be considered as much a matter of course as the accurate handling of clerical details. Trust funds must be administered with unusual discretion. Strenuous cooperation will be a vital factor in rebuilding foreign markets.

Each of the six major depai cments of the Old Colony Trust Company is better prepared today than ever before to render its particular kind of specialized service to all who may need it. Complete facilities are available for every branch of Commercial Banking. Through its Trust Department, this company is uncommonly well prepared to act in every fiduciary capacity for both corporations and individuals. Its Foreign Department can be of great value in financing international trade. High standards of serviceability obtain also in the Bond, Transfer, and Vault Departments.

By reason of the progressive administration. of its policies, its position in the field of banking and its thoroughly modern equipment, this company is exceptionally well-qualified to handle the finances of individuals, estates and corporations.

We shall be glad to send you our booklet :
"Your Financial Requirements and How
We Can Meet Them". Address Dept. O

OLD COLONY TRUST COMPANY
BOSTON

(Continued)

just above, that a railway must have rolling stock if it is to operate, and they know that in case these rental charges are not paid the trustee has the right to take the equipment away from the railway to which it is leased, sell it, and turn the proceeds over to the note owners. A further protection for the note owners is the customary clause in the lease providing that the equipment be insured in their favor.

The practical working out of an issue of equipment trust notes would be something as follows: A railway company places orders for $2,000,000 worth of rolling stock. The transaction is arranged through some banking house, which furnishes the money; title to the rolling stock is taken by the bankers and leased to the railway company. The lease made between the two is then assigned to a trust company, and the title to the equipment thereupon becomes vested in the trust company. Equipment trust notes to the amount of $2,000,000 or less are issued in various denominations and sold to investors; the security for these notes is the $2,000,000 of rolling stock, and it is the duty of the trust company, the trustee, to see that the terms of the lease are carried out. The lease contains a list of the equipment pledged together with the car numbers, and provides that when it is delivered to the railway a payment of twenty per cent of the amount due shall be made to the trustee. The notes mature in ten yearly installments, so that each year the amount outstanding is reduced as the railway makes its payments of rental. The full amount of the equipment is pledged as security, however, until the last note is paid, so that, even though it is deteriorating each year and is of less value, the outstanding notes too are growing fewer. The security remains unimpaired, therefore, from beginning to end.

The fact that equipment trust certificates are short-term investments tends to lessen their price fluctuations. Every security as it approaches maturity tends to sell closer and closer to its face or par value, for it is the par value which the owner will receive when the principal is paid. This circumstance renders this class of securities an unusually stable investment, and this feature is

appealed to banks, which desire securities they can sell at short notice with little or no prospect of loss. There is a constantly broadening market for equipment trust obligations. This means of course that more and more people are recognizing them as attractive investments and the demand for them is an increasing one. They are ideal if people or institutions have funds which they want to invest for short intervals -periods under a year, for instance. Banks buy them very often under these conditions, and find them very satisfactory indeed. Private investors, too, I would do well to give attention to them when they are in the market for investment securities.

QUESTIONS AND ANSWERS

Q. Is it possible for me to get some book showing the net return on bonds bearing various rates of interest selling at a discount or premium and maturing in from, say, one year to one hundred years? What I want to get is the actual return on my money if I hold the bonds until maturity.

A. A book entitled "Consolidated Tables of Bond Values" has recently been published by the Financial Publishing Company, Boston, Massachusetts, showing net returns from 2.90 to 15 per cent on bonds and other redeemable securitie paying interest semi-annually at the rates per annum of 3, 32, 4, 44, 42, 434, 5, 54, 52, 6, 62, 7, 72, and 8 per cent, maturing from six months to 50 years progressing semi-annually, and from 55 to 100 years by periods of five years. Consor dated tables of bond values are computed according to the generally accepted.practice which assumes that the proceeds of the coupons, as they mature, are reinvested at the rate of income which the bonds yield at the purchase price.

Q. Where is the American Car and Foundry Company located?

A. It has business offices at New York, Chicago, and St. Louis. Plants are located at Buffalo, New York; Huntington, West Virginia; Berwick, Pennsylvania; Detroit, Michigan; St. Louis, Missouri; Milton, Pennsylvania; Jeffersonville, Indiana; Minerva, Ohio; St. Charles, Missouri; Terre Haute, Indiana; Chicago, Illinois; Depew, New York; Gary Indiana; Bloomsburg, Pennsylvania; Indianapolis, Indiana; Wilmington, Delaware; and Memphis, Tennessee.

THE OUTLOOK CLASSIFIED ADVERTISING SECTION

Advertising Rates: Hotels and Resorts, Apartments, Tours and Travel, Real Estate, Live Stock and Poultry, sixty cents per agate line, four columns to the page. Not less than four lines accepted.

"Want" advertisements, under the various headings, "Board and Rooms," "Help Wanted," etc., ten cents for each word or initial, including the address, for each insertion. The first word of each "Want" advertisement is set in capital letters without additional charge. If answers are to be addressed in care of The Outlook, twenty-five cents is charged for the box number named in the advertisement. Replies will be forwarded by us to the advertiser and bill for postage rendered. Address: ADVERTISING DEPARTMENT, The Outlook, 381 Fourth Avenue, New York City

Calls You

500 Bond Building, Washington, D.

7 countries,

Scotland to Italy sailing June 2.

Cunard Line. 75 days. $800. No extras. BABCOCK'S EUROPEAN TOURS, 1137 Dean St., Brooklyn, N. Y. Established 1900.

Hotels and Resorts

NEW YORK CITY

The Margaret Louis

of the Y. W. C. A.

14 East 16th St., New York C A homelike hotel for self-supports women. Rates, $1.00 to $1.50 per day. for circular.

HOTEL JUDSON 53 Washin

ton Squar adjoining Judson Memorial Church Ho with and without bath. Rates $3.50 per including meals. Special rates for two wee or more. Location very central. Couven to all elevated and street car lines.

NEW YORK

ADIRONDACKS THE CRATER CLU

Of the Burnham Cottage Settlement. Fax on-Lake Champlain, offers to families of finement at very moderate rates the attr tions of a beautiful lake shore in a loc with a remarkable record for healthful The club affords an excellent plain table = accommodation. The boating is safe, theres attractive walks and drives, and the point

tour through the Western Highlands and Islands of Scotland-a

holiday you will never forgethealthful, happy, every day a wonder and delight.

and Western Europe. Tour
35 sails from New York
April 21. Tour 36 sails
from Montreal June 18

TEMPLE TOURS 65-A Franklin St.

Hotels and Resorts

CONNECTICUT

Sacandaga ADIRONDACKS A camp for the lovers of the out-of-doors. Refined ar roundings. Good table. Large living-ha Cottages and tents for sleeping. Boats and canoes. Black bass fishing. Hikes into the woods. Nights around the camp-fire. Every thing comfortable and homelike. CHAS:

Flora Macdonald, and the scenes of the wild clan feuds of olden times-where the keen wind blows free over the heather hills and lochs so famous in romantic song and story. Scenery unsurpassed in Europe, steeped in romance and ancient lore, but modern in its regard for the comfort and convenience of the tourist.

The old country calls you to health and pleasure to a holiday without a peer, and let our chain of Royal Mail Steamers introduce you to the wonderland of Scotland's Bens and Glens.

Circular Tours by Royal Mail Steamers Colomba, etc., from Glasgow via Ardrishaig, Islay, Oban, Staffa and Iona. Ballachulish for Glencoe, Fort William, Caledonia Canal and Inverness-a romantic round of scenery, history, health, beauty, and grandeur.

Illustrated Booklet mailed free for 5 cents, U. S. A. stamps. DAVID MACBRAYNE, LTD.

Royal Mail Steamers 119 Hope Street, Glasgow, Scotland

SUMMER TOUR 8th season. Small

private party. 70 days. London to Naples. Auto Geneva to Nice. Mrs. Nelson B. Chester, 420 W.121st St.,N.Y.C.

GO TO EUROPE IN 1921 AT MY EXPENSE by organizing a small party. Babcock's European Tours, 1137 Dean St., Brooklyn, N. Y. Established 1900.

SEE ENGLAND

For five weeks with Prof. Jack Crawford, of

NEW MILFORD, Litchfield Co., Conn. In the foothills of the Berkshires. Open all the year. An ideal place for your summer's rest. 2 hours from New York. Write for booklet. Mrs. J. E. CASTLE, Proprietor.

ENGLAND

HOME LIFE in LONDON. Those visiting England will find congenial surroundings, centrally located. Miss OLIVER, 51 Courtfield Gardens, S. W. 1.

MAINE

Orchard Hill, opened for boarders May 1. Good trout fishing. Plenty eggs, cream and chickens. Rates reasonable. References given. Correspondence solicited. JACKSON & HOLT, North Waterford, Me. P.O. Box 12. MASSACHUSETTS

HOTEL PURITAN

Commonwealth Ave. Boston THE DISTINCTIVE BOSTON HOUSE Globe Trotters call the Puritan one of the most homelike hotels in the world. Your Inquiries gladly answered 01-Costello Her and our booklet mailed

CHILDREN'S HOTEL Opens June 15 Experienced, trustworthy care. Write "Cape Cod," 400 West 118th Street, New York.

If You Are Tired or Need a Change you cannot find a more comfortable place in New England than

THE WELDON HOTEL

GREENFIELD, MASSACHUSETTS It affords all the comforts of home without extravagance.

WHITE HOUSE INN

91 Elm Street, Northampton, Mass. Season June 24 to Sept. 10. Reservations may be made now. Detailed information upon application to Mrs. M. V. BURGESS.

NEW HAMPSHIRE

EUROPE 1921 65-Franklin St., Boston, Mass. EUROPE The Katherine Locke

TEMPLE TOURS 65-A Franklin St., Sailing in June. Exclusive delightful. Address Katherine Pantlind, 110 Morningside Drive, N. Y. City

Choice Tours to Europe 2 Months' European

Selected itineraries. Parties limited. Expert leaders. Reasonable prices. Tenth season. DEAN-SCHILLING TOURS

161 A Devonshire St., Boston, Mass. apital National Bank, St. Paul, Minn.

Tour

to France, Belgium, Holland, England. Sailing July 2, French liner from New York, returning August 25 from Liverpool to Montreal. Leader, native of Holland, speaks language of every country. Party very limited and exclusive. Interesting route. Address RELA VAN MESSEL, 206 W. 69th St., New York City.

12 East 31st Street

New York

Combines every convenience and home

WYOMING

WYOMING

Trapper Lodge

An all season stock ranch. Good water. table, and our own garden in season. fishing, and saddle horses. Camp OUTDOORS WITH COMFORT in the Big Horn Mountains Reservations all the year. Address

WYMAN & SONS, Shell, Wyoming.

Health Resorts

LINDEN The Ideal Place for Sick Doylestown, Pa. An institution devoted to People to Get Well the personal study and specialized treatment of the invalid. Massage, Electricity. Hydrotherapy. Apply for circular ta ROBERT LIPPINCOTT WALTER, M.D. (late of The Walter Sanitarium)

The Bethesda White Plains

N.Y. A private sanitarium for invalids and a who need care. Ideal surroundings. Addfor terms Alice Gates Bugbee, M.D. Tel. 2

"INTERPINES"

Beautiful, quiet, restful and homelike. O 26 years of successful work. Thorough. liable, dependable and ethical. Every T fort and convenience. Accommodations superior quality. Disorder of the nervou tem a specialty. Fred. W. Seward, Sr., Fred. W. Seward, Jr., M.D.. Goshen, N. I

PRIVATE HOME for ELDERLI

SEMI-INVALIDS Wide veranda, home cooking. Opens Ma 1st for the year. Address for terms, Manage 51 Trowbridge St., Cambridge, Mass

Crest View Sanatorium Greenwich, Ct. First-class in all reapes home comforts. F. ST. C. HITCHCOCK

Apartments

FOR RENT ATLANTIC CITY.

June 15 to September 25, ideal Boardwale apartment, 5 rooms, screened porch, elas. For full information write 5A Vermont Apa

Real Estate

CONNECTICUT

FOR SALE

refinement wishing to live on American Plan and be within easy reach of social and dramatic centers.

Rates with Illustrated Booklet gladly sent upon request. Under KNOTT Management

Nine rooms; all improvements; fruit de and shrubbery: spacious grounds. Desigethal place for a Hartford professional or man; or for one who has retired Abb Owner, Suite 5, 19 Ware St., Cambridge,