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 I. The evolution of securities

Collection:: Economics Books

(8 THE WORK OF THE STOCK EXCHANGE governmental unit or company acknowledges that it owes the holder a certain sum of money, and agrees to repay it by a certain date and under certain conditions, meanwhile promising to pay a stipulated rate of interest. Bonds whose maturity date is in the near future are sometimes called “notes.” If a bond is unsecured, it is called a “debenture.” Many bonds, however, are secured by mortgages or specific pledges of prop- erty or sources of revenue, which the holders of such “mort- gage bonds” may seize if they do not regularly receive their interest, or at the bonds’ maturity the repayment of their principal. With company bonds, the bondholder is thus a creditor of the concern but not a partner or participant in it. Normally, the bondholder has no voice in the councils of the company, nor can he be said to own any part of the business. But his interest must be paid to him before stockholders can receive any dividends, and should the company default upon these interest payments on its bonds, the bondholders may take over the busi- ness or see that it is reorganized so as to protect their claims against it as fully as possible. In any case, the company owes to its bondholders not only this interest but also the nominal value of the bonds, or this nominal value plus a premium to be paid on their retirement. But the company owes its stock- holders nothing, and in the liquidation of a business they can lay claim only to what may remain after the concern’s debts have all been paid. There is an almost infinite variety in the exact terms under which bonds are issued, and the preceding paragraphs are open to the same criticism to which generalizations concerning a complex and subtle subject frequently are. It is not within the scope of this study to discuss the innumerable variations in bond indentures comprehensively, and only a few of them will be mentioned here. A few bond issues abroad have no maturity date, and rep- resent a perpetual debt; the 215% British Consolidated Debt

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