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

20 THE WORK OF THE STOCK EXCHANGE in respect to their priority to earnings, and in the event of liquidation to assets. Volumes could be written on this sub- ject alone. American railway bonds present unusual complexi- ties in this respect. The money in which the interest or the principal of bonds 's payable, is also frequently an important consideration. Some bonds specifically provide for payment in gold—a feature which is apt to become highly significant in case the given cur- rency suddenly abandons the gold standard and in terms of it gold goes to a premium. Sometimes, too, bonds are made pay- able in a foreign currency, or in several different currencies at the option of the holder. During the currency troubles in Europe after the war, this aspect of many European bonds proved highly important in determining their current value. Shares of Stock.—In complete contrast to bonds are shares of ordinary or common stock. Such shares do not, like bonds, represent a debt owed to their holders by the issuing company, but rather the company equities of which the shareholders are the owners. A shareholder is therefore really a partner in the given business enterprise, rather than a creditor of it. The company is under no necessity (unless such an arrangement is specially stipulated) of repaying the nominal value of the shares to their holders, and indeed American shares frequently have no par value anyway. An almost equal latitude (again apart from special stipulations to the contrary) is enjoyed by the company in respect to what dividends shall be paid to shareholders, or indeed whether any dividends at all shall be paid. On the other hand, the possible dividends which a com- mon shareholder may receive are not usually limited as in the case of bonds. The amount of the dividend to be paid on com- mon stock is usually determined by the directors of the com- pany, subject to ratification by a majority of the stockholders. Thus shares as such are attended with more risk than bonds, but possess greater possibilities of profit.

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