XIV 
CONTENTS 
Rights and Liabilities of Stock 
Ownership 
Voting 565 
Cumulative Voting 566 
Stock Rights 566 
Stock Issued at Premium 567 
Transfer of Stock 567 
Borrowed Capital 
Corporate Capital 568 
Sources of Borrowed Capital 569 
Trading on Equity 569 
Short-Term and Long-Term Securities 569 
Size of Bond Issue 570 
Open and Closed Bond Issues 571 
Usual Limitations on Limited Open- 
End Bond Issues 571 
Danger of After-Acquired Property 
Clause 572 
Means of Corporate Borrowing 572 
Funded Debt Defined 573 
Secured Funded Debt 573 
Denominations of Bonds 573 
Nature of Secured Bonds 573 
Bonds Payable in Gold 573 
Classification of Bonds 573 
Characteristic Features 579 
Reasons for Issuance 580 
Redemption of Railroad and Industrial 
Bonds 580 
Sinking Fund Methods 581 
PAGE 
Securing Funds 
Capital Funds from'Investing Public.. 582 
Capital Funds from the Speculative 
Public 582 
Capital Funds from Employees 583 
Capital Funds from Customers 583 
Provision for Contingencies 
Definition and Nature of Reserve. . . . 584 
Classification of Reserves 584 
Disposition of Profits 
Dividend Policy 585 
Percentages of Earnings Devoted to 
Dividends 586 
Regularity of Dividends 587 
Preferred Dividend 589 
Extra or Special Dividends 589 
Property Dividends 590 
Scrip Dividends 590 
Stock Dividends 590 
Sources of Surplus 592 
Reinvestment of Profits 592 
Sale of Stock at a Premium. ... 593 
Surplus 594 
Hidden or Secret Surplus 594 
Surplus Policy 594 
Financial Aspect of Patents 
Patent Cost and Values 595 
Depreciation of Patents 597 
Income from Patents 598 
General Records 601 
SECTION 8—FIXED CAPITAL EXPENDITURES 
Control of Fixed Capital Expenditures 604 
Conservative Policy 604 
Relation to Competition 605 
Turnover on Fixed Property Invest- 
ment 605 
Fixed Property Financial and Expense 
Burdens 606 
Financing Fixed Property Expend- 
^ itures 606 
Protection of Working Capital Position 607 
New Capital to be Furnished by Stock 
holders When Working Capital is not 
Excessive 607 
Tangible Fixed Assets 608 
Land. ! i 608 
Buildings 608 
Leaseholds 608 
Machinery and Equipment..!!!!!!!! 608 
Delivery Equipment. . . .! 609 
Tools 609 
Furniture and Fixtures 609 
Patterns and Drawings 609 
Intangible Fixed Assets 609 
Deferred Charges 610 
Assets Acquired by Purchase 611 
Self-Handled Construction Work 611 
Overhead Costs in Construction Work. 611 
Idle Construction Staff Expenses 612 
Appraisal of Fixed Capital Assets 612 
Adjustment of Asset Values by Ap- 
. PfaisaL • 613 
Additions, Betterments, Replacements 
and Repairs 613 
Factors in Control of Capital Expendi- 
T lores 615 
Importance of Budgetary Control 615 
Supervision of Capital Expenditures .. . 616 
Plant and Equipment Control 616 
Effect of Budget Program 618 
Report on Appropriations 620 
Reserve for Contingent Expenditures 620 
Procedure for Compiling Data 621 
Committee on Rules of Capital Ex 
penditures 622 
Definition of Terms 622 
Classification of Projects 622 
Scope of Specific Projects " 623 
Form for Specific Project ‘ . 624 
Costs and Records ' ' 625 
Record of Expenditures by Specific 
Projects 625 
Summary of Monthly Progress Report. 628 
Closing of Specific Projects 628 
Routine Projects 628 
Expenditures Under a Routine Project. 631 
Accounting Records 631