A  conservative  investment  house  of  Chicago,  which  has  dealt
more  largely  in  these  securities  than  any  other  house  in  that  city,
states  in  one  of  its  published  circulars  that:  "Steamship
bonds  have  a  splendid  record.  We  are  not  aware  of  a  single
instance  of  loss  to  investors  in  this  class  of  securities."1

The  ruling  of  the  Interstate  Commerce  Commission  requir-
ing a  separation  of  the  control  of  steamship  companies  and
railroads  may  have  a  temporary  effect  on  the  development  of
lake  shipping,  but  it  cannot  long  affect  Great  Lakes  steamship
bonds.  The  effect  of  this  ruling  upon  steamship  securities  has
not  been  as  great  as  many  had  anticipated,  as  the  steamers  con-
trolled by  the  railroads  were  financed  through  the  railroad
companies.  The  laws  affecting  ocean  going  trade  are  a  serious
menace.  However,  this  subject  is  not  within  the  province  of
this  chapter.
Classes  of  Bonds. — There  are  four  general  classes  of  steam-
ship bonds:  first,  those  secured  by  a  lien  on  a  single  vessel;
second,  those  secured  by  a  lien  on  a  fleet;  third,  those  secured
by  a  lien  on  a  fleet  or  single  vessel  and  other  properties;  and

^Circular  of  Pcabody  Houghtcling  <£  Co.
GREAT  LAKES  STEAMSHIP  449

fourth,  those  issued  by  holding  companies  on  the  collateral
security  of  stocks  and  bonds  of  subsidiary  companies.
The  importance  of  the  third  type,  commonly  known  as  the
debenture  or  blanket  mortgage,  varies  with  the  value  of  ter-
minals and  other  holdings.  Bonds  of  the  third  class,  as  well  as
those  of  the  first  and  second,  should  always  be  a  first  lien  on
the  properties  mortgaged.  The  fourth  type  is  used  only  by
holding  companies  of  coastwise  and  foreign  going  vessels.
