THE COMMISSION HOUSE 
substitute some other equally valuable security or securities 
in place of it, obtain the certificate, and deliver it to Blank, 
on receipt of his check for the sum which he still owes upon it. 
421 
The Practice Regarding Transfers.—One frequently trou- 
blesome detail, however, has been disregarded in the above 
operations—the matter of transfer.’ So long as a share cer- 
tificate is irrevocably assigned by a Stock Exchange house, it 
constitutes a good delivery. Hence, stock held by a firm on 
marginal account for its members, if so assigned, may be made 
out in the name of any firm, and still be readily salable or con- 
stitute satisfactory collateral for a loan. If the stock is non- 
dividend-paying, there is little purpose in having it retrans- 
ferred every time it changes hands. But if it pays dividends, 
they will, of course, be paid to the firm or individual in whose 
name the stock stands. In consequence, it is customary for 
firms holding stock on margin account to have it transferred 
into their own name before the corporation books close for 
dividends, in order to receive the dividends accruing on the 
stock. The brokerage firm can still borrow money upon a stock 
in transfer, however, if it turns the certificate in at the Transfer 
Department of the Stock Clearing Corporation and obtains in 
exchange for it an assignable transfer receipt.*® 
Ordinarily, bonds are sold with accrued interest added to 
the selling price.’®* In the case of dividend-paying stocks, as 
the day approaches when the books of a corporation are closed 
for the payment of a dividend, the stock tends to sell at a higher 
price which roughly equals its regular price at that period, plus 
the dividend about to be paid. Once the books are closed, how- 
ever, the new purchaser of the stock will not receive the divi- 
dend, which will go to the holder of the stock at the time when 
the books were closed. Hence, the amount of the dividend to 
be paid is promptly subtracted from the price of the stock, 
16 See Chapter XI, p. 294. 
17 See Chapter I, B 26. 
18 See Chapter XIII, p. 380 
19 See Chapter X, p. 267