CHAPTER X 
THE BOND MARKET 
Our survey of Stock Exchange operations thus far has 
dealt primarily with dealings in shares, and little has been said 
concerning the Exchange bond market. In their general 
methods and functions, the bond and share markets on the 
Exchange are much alike. But as share dealings on the Ex- 
change occur in much greater volume than bond dealings, much 
more extensive facilities are required on its floor for the former 
than for the latter. 
As an earlier chapter’ has pointed out, bonds represent 
debts while shares represent equities, and bondholders are 
creditors while shareholders are really partners. Also, bonds 
usually must be repaid by some fixed maturity date, while 
usually share issues represent theoretically perpetual equities. 
Thus bonds, as obligations of some government or company, 
are inherently simpler and as a rule more definite than shares, 
and consequently less dependent upon speculation during their 
distribution. 
Classes of Bonds.—Bonds can be divided into two genera; 
classes—mortgage bonds which are secured by a mortgage of 
some physical asset of the issuing debtor organization, and 
debenture bonds which are not so secured and simply evidences 
of debt. 
There are practically as many kinds of mortgage bonds as 
there are different varieties of mortgages, and sometimes the 
exact order of precedence among different mortgage issues as 
claims against assets or earnings is difficult to determine. 
Mortgage bonds, particularly in the railroad field, are also 
Ses Chapter I, p. 17.