The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Capital

Collection:: Economics Books

86 NATURE OF CAPITAL AND INCOME [Crar. V be impossible; but as their debts for death claims are for specific sums, they may be forced into liquidation, if unable to obtain these sums by remitting dividends or by assessments. § 13 When bankruptey occurs, the claims of creditors are settled in one of three ways: through an agreement of “composition,” by which the creditor agrees to take what he can get and excuse the debtor for the differ- ence; through an assignment by the debtor of his assets to his creditors; or through foreclosure by the holder of some obligation. The final result of bankruptcy will be either liquidation, by which the business assets are sold and distributed and the business wound up; or reorganization, by which the business is continued and the liabilities are entirely changed in character. In the case of companies with large fixed capital, as, for instance, railroads, reorganization is the usual result, and the old bondholders often become the stockholders, the old stockholders surrendering their rights altogether. While this reorganization is being effected, the affairs of the company are administered by a receiver appointed by the bankruptey court. He calls in all the stock and bonds, and issues temporary receiver’s certifi- cates. These in turn are exchanged for the new securities when ready. However, the bondholder seldom wishes to assume his right of control and become a stockholder, and is usually offered instead the option of cash or some new security similar in kind to that which he- held before, but less in amount. He is apt to accept ong of these alterna- tives, realizing that to foreclose and take possession is likely to be more troublesome, and, in the end, less advan- tageous. Thus the losses of the old company are ‘written off,” and the reorganized company starts afresh with a clean set of books. The change is simply a change in the forms of ownership of wealth and in the individual owners.

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