THE WORK OF THE STOCK EXCHANGE 
bearer shares were really legal here. The Hofstadter Bill 
enacted in Albany in 1927, however, gave legal recognition to 
bearer shares in New York State. | 
Since with bearer securities no register of holders can be 
kept, such holders are at any time unknown to the issuing gov- 
ernment or company. Therefore, interest and dividend pay- 
ments on bearer securities are ordinarily made through coupons 
attached to the bearer certificate. Also, when bearer securities 
are drawn by lot, or when rights, etc., are issued on bearer 
shares, holders of these securities can be reached only by public 
advertisement. It is likely that countries with relatively small 
geographical area can for this reason employ bearer shares 
more satisfactorily than nations of great geographical extent 
like the United States, or of vast international distances like 
the British Empire. 
Bearer securities are superior in their ready negotiability, 
since they pass by delivery without transfer formalities. To 
some extent foreign economists are justified in looking upon 
them as a higher evolution in the form of securities, since until 
finance became impersonal they could not of course be em- 
ployed. This view, however, has more bearing abroad, where 
methods of transferring registered securities are so slow and 
beset with formalities, than it has in America where the han- 
dling of endorsed registered certificates in blank has been so 
highly perfected. The principal drawback to bearer certificates 
i's, of course, the danger that they may be lost or stolen, for in 
this case the owner has as a rule very little real protection. 
[n this country, as well as in England, the phrase “to bearer” 
on the certificate is interpreted quite literally, and it is usually 
very difficult for one dispossessed of his bearer securities by 
theft or loss to recover them. In certain European countries 
where bearer certificates are almost exclusively employed, elab- 
orate systems for stopping payment on certificates alleged to 
have been lost or stolen, have been developed. The French, for 
"10 Appendix Ie. 
28