The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter X. The bond market

Collection:: Economics Books

256 THE WORK OF THE STOCK EXCHANGE classified according to the nature of the assets securing them; thus, within this single industry there are “land grant” bonds, “terminal” and “bridge” bonds, etc. With collateral bonds, the mortgage is placed upon securities rather than directly upon physical property. Weak government bonds are some- times specially secured by certain sources of revenue—such as port or internal taxes—but because of this fact they are not called mortgage issues. Debenture bonds are not thus secured by any mortgage, or the pledge of any single source of income. The best gov- ernment bonds, being claims against all rather than specified assets and revenues, are debentures. Our American railway reorganizations have also produced a peculiar and sometimes riskier type of debenture—the “income” or “adjustment” bond, which according to the terms of its indenture, needs to pay its interest only when the company earnings are suffi- cient to permit it, somewhat according to the manner of a preferred stock. Finally, “convertible bonds”’—as their name implies—can under specified conditions be converted at the option of their holders into the stock of the issuing com- pany. When this conversion privilege makes such an exchange profitable, the price of the bonds and the stock into which they are convertible will fluctuate together, owing to the rise of arbitrage between them. Im such securities, regular arbitrage sometimes occurs on the New York Stock Exchange between its bond market and its stock market. Form of Bonds.—Practically all American bond issues are available in the bearer form, with coupons attached. “In- scribed” bonds, after the British fashion, are unknown in this country.? Sometimes, however, the holder of a bearer bond is given the privilege of converting it into the registered form, either in respect to interest or principal, or both. But by no means all, or even most, American bond issues convey this privilege, and even where they do. it is not often availed of by ~ 2See Chapter I. v. 24.

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