in a poor country may be higher than $300,000 per mile on a four-track trunk line which owns valuable terminals and rights of way through several large cities. (2) _Amount of prior lien bonds outstanding per mile._ The amount of bonds which come ahead of the bond in question on the same mileage is a matter of great importance and works directly against the security of the bond. Purchasing a bond which is preceded by a prior line bond is like taking a real-estate mortgage on property already encumbered. If the bond is not followed by other bonds, then the margin of security in the property is represented wholly by the market value of the stock per mile, and the investor must figure carefully the value of this equity. (3) _Amount of junior lien bonds outstanding per mile._ The amount of bonds which come after the bond in question, on the other hand, works directly in favor of the bond, for it increases the margin of security. It shows also that other people have had sufficient confidence in the property to invest their money in obligations subject to the one in question. In the event of a receivership this is often a matter of great importance; for if a foreclosure sale is ordered the junior bondholders, in order to protect their own interest, must buy in the property for an amount at least equal to the par value of the prior lien bonds. The foregoing considerations apply particularly to the safety of the principal invested in railroad bonds; the following points affect the safety of interest: (4) _Gross earnings per mile._ The gross earnings of a railroad must be compared with those of other roads occupying the same field, and the returns for a number of years must be examined to determine whether such earnings have increased or decreased. The position in which the railroad stands for obtaining new traffic must be noted. This is dependent somewhat upon the railroad's ability to take traffic from other railroads, but more upon the probable growth and development of the territory which the railroad serves, and the increased traffic which will probably be offered. In this connection the rate of increase in population in the road's territory is important. The proportion between passenger and freight earnings, the diversity and density of freight traffic, and passenger and freight rates should be examined. The reputation of the management for ability and integrity should be considered. Gross earnings run from about $3,000 to $40,000 per mile with the average $10,460.