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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter I. The evolution of securities

Collection:: Economics Books

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

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