THE EVOLUTION OF SECURITIES 
(“Consols”) and 3% French irredeemable rentes are outstand- 
ing examples. Also many bonds provide for their possible 
retirement before their stated maturity date; this may be done 
by the debtor-organization repurchasing its bonds in the open 
market, or by retiring a certain number of the bonds accord- 
ing to a regular schedule through the operation of a “sinking 
fund,” and at a stipulated price. The latter operation is carried 
out by drawing the numbers of the appropriate or stipulated 
amount of the bond issue by lot, and (if the bonds are in 
bearer form) publishing these drawn numbers in the papers. 
The “drawing” of a given bond in this way may be either an 
advantage or a disadvantage to its holder, depending upon 
whether the current market price of the bond is below or above 
the retirement price. Naturally, other factors apart, bonds 
retirable in this way are apt to experience more stable price 
levels than issues without such a provision. 
Ordinarily, bonds must pay a fixed rate of interest. Some 
bonds, however, are issued with “share warrants” attached, 
which gives to the bondholder the privilege of purchasing 
shares of the company under certain conditions, and there are 
other exceptional cases where special rights and privileges 
attach to ownership. Certain American companies which have 
been reorganized have issued “income and adjustment” bonds, 
whose interest need be paid only in case current earnings are 
sufficiently great to permit it; with these bonds, interest pay- 
ments can be suspended without forcing the company into 
bankruptcy. Other bonds contain conversion privileges, where- 
by they may under stated conditions be exchanged for other 
securities—particularly common stock; such “convertible 
bonds” may fluctuate in price as actively as the stock into 
which they are convertible, in case the conversion privilege is 
profitable to exercise. As a whole, however, bonds are usually 
more stable in price than shares, because of their fixed rate of 
interest and their compulsory clauses in regard to its payment. 
There is also great diversity among company bond issues 
[OQ