OF

CALIFORNIA

MONEY AND INVESTMENTS

A

A. The "ticker" abbreviation for "assented," or "Class A."

A and O. Interest or dividends payable semi-annually, April and October.

A. 1. Highest grade; none better.

"A" Bond (or "A" Stock). Used when securities are divided into classes, such as "A bond," "B bond." (See "Preferred Stock.")

Abrasion. The reduction in weight of coins or bullion resulting from friction.

Absolute Indorsement. This binds the indorser of an instrument to pay the same only in case of failure on the part of all prior indorsers so to do, and upon due notice to him of their failure.

Absorbed. There are two common uses of this word: First, "the market absorbed all stock offered." By this it is understood that all the stock that was offered found a market, or purchasers. Second, we say that one railroad has "absorbed " another, meaning that it has obtained control of, or bought it.

Abstract of Title. See "Mortgage."

Acceptance. When a "time draft" is received for collection, although not due, it is presented to the person against whom it is drawn for acceptance." This is done by his writing across its face the word "Accepted," followed by his signature, and it is then said to have been "honored." It has now become an evidence of indebtedness against him; very much the same thing as a promissory note. The person drawing the draft has, in like manner, assumed the position of an indorser, so that if it is negotiated in the meantime, or the "drawer" has been given use of the money by his bank which has assumed the collecting of the draft, he must make it good if the "acceptor" fails to pay it.

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It is customary to date a draft when it is "accepted," and to name a place of payment; otherwise it is payable at the acceptor's" place of business.

Formerly in England the drawee of a bill could accept it orally, and such is still the rule in some of our States. But by the usage of merchants, as well as by modern statutes in England and in many of our States, an acceptance must be in writing on the bill. This is a proper requirement, for it enables any one who receives the bill to tell at once whether it has been accepted."1

A "qualified acceptance" should not be allowed by the party presenting a draft to be accepted. If the person against whom the draft is drawn, in addition to writing the word "accepted," adds thereto some qualification, such as making it conditional upon the receipt of merchandise against the shipment for which it was drawn, a "qualified acceptance' results. The reason for not permitting this is that the "drawer" or indorser upon a paper is entitled to his rights as set forth in its original form, and any change as above, except with their knowledge and approval, relieves them from any liability upon the paper.

(See also "Time Draft.")

Acceptor. See "Draft."

Accident Insurance. A form of insurance by which the person taking out the policy may recover from the company in case of accident to himself, the form of payment by the company being either so much per week according to the amount of the policy - during the time of disability resulting from the accident; or a given sum in event of death as the result of an accident; or lesser stated sums if the loss of a limb or loss of sight, or a lesser permanent injury is sustained. Any one of the latter payments would be in addition to the weekly payments on account of inability. These last, however, are generally limited to a duration of a fixed number of weeks.

Many people who are traveling a great deal or who are engaged in a more or less hazardous form of occupation, carry such policies continually; others take them out for special occasions, as before a railroad trip or an ocean voyage, to cover the period of the journey. The cost is not excessive and this form of insurance has come into very general and satisfactory use. A person taking out such a policy should, however, read it with great care, and follow accurately the instructions given therein in case of accident, and also post himself upon the conditions under which the company becomes liable, as there are numerous ifs" to these policies. This is a very old form of insurance, having been known for

'Francis M. Burdick,

several centuries, but the Travelers Insurance Company of Hartford was the first to bring it into successful use in America, in 1863. At this present time many companies are writing this sort of risk, the amount outstanding running into the billions of dollars.

Accommodation.

Borrowers succeeded in finding accommodation," meaning that they succeeded in borrowing money. To be " accommodated" in finance means the same as in its general sense, to accomplish what is desired. Accommodation Indorser. See "Accommodation Paper." Accommodation Note. See "Accommodation Paper." Accommodation Paper. Instruments which the maker, drawer, acceptor, or indorser signs merely as an accommodadation to another, reaping no financial benefit for so doing, unless paid a commission for the act, as is sometimes the case. In other words, a person becomes a party to an instrument without consideration, and for the purpose of loaning his credit to another. The rights of all parties concerned in "accommodation paper" are somewhat complex, and should be thoroughly understood. For example: corporations cannot legally make "accommodation paper.' Also: the signer for accommodation is under no liability to the person benefited or accommodated, as no consideration was given; but he is liable to any other holder for value, of the paper.

The lending of one's credit in the shape of "accommodation paper" is a very bad practice and should be seldom, if ever, indulged in. Financial ruin has resulted in many instances from this sort of thing.

Account. See "For the Account."

Account and Risk. A transaction in which the broker acts merely as "agent" for the account of the customer, who assumes all the risk incurred.

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Account Current. Same as Current Account."

Account Day. Strictly, the last of the "fortnightly settlingdays." Also called "pay-day" and "settlement day." This is the day upon which stocks are delivered and paid for, and settlements made.

Account Days. See "Fortnightly Settling-Days'

Account Sales. The statement which a broker, agent, or commission merchant gives his customer, showing how his account stands.

Accounts Payable. Open accounts with others showing sums due them, but not evidenced by forms of indebtedness such as notes or acceptances.

Accounts Receivable. Open accounts on the books of a firm, corporation, etc., against its customers, not evidenced by written obligations such as notes or acceptances.

Accrued Dividend. This has the same relation to a stock as "accrued interest" has to bond. Not many stocks are sold with "accrued dividend" or "with dividend," and then only in case of "guaranteed stocks" or stocks where the dividend is certain and fixed.

Accrued Interest. One of the most common expressions in connection with investment dealings, and one very frequently not clearly understood. Let us take, for example, a $1,000 bond bearing 4% interest, or, in other words, paying the holder $40 yearly. The interest is payable January 1st and July 1st, each year; $20 at each time. This interest will not be paid before it is due; that is, in the month of June the interest due July 1st cannot be collected; but, suppose Maria Jones had held the bond in her possession until the 1st of June, she would, therefore, be entitled to the interest upon her money at the rate of 4% annually from January 1st last, at which time she received the interest then due. Therefore, if Maria Jones wishes to sell this bond to Henry Drake at a price, say, of par and "accrued interest," she would receive from him $1,000 the principal sum of the bond and also the interest upon the $1,000 from January 1st to June 1st, or five months, at the rate of 4% per annum. Drake would, therefore, have paid to Maria Jones five months' interest, which he could not collect until the 1st of July, at which time he would collect not only the five months' interest paid Maria Jones, but the additional one month's interest, for the time which he had had his money invested; therefore, the amount of money paid to Maria Jones would not be lost by Drake, but would come back to him, together with his one month's interest, on July 1st.

This is the only method by which it is possible to sell any security upon other than interest dates, without loss of interest to the holder, except an additional price be placed directly upon the security at the time of its sale, equal to the interest which has "accrued" since the last interest payment. Most stocks are sold in this latter way, and, in fact, all securities dealt in upon the New York Stock Exchange. Bonds upon the Boston Stock Exchange are sold with crued interest," except "defaulted" and "income bonds," which are sold without interest-or "flat," as it is called. There is, therefore, generally a difference in quotations of bonds upon the two exchanges, from the fact of being sold “flat” upon the New York, and "with interest" upon the Boston Exchange. "With interest," "and interest,' "interest added are expressions, either of which is used in the same

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sense as "accrued interest." If a note is drawn payable "with interest" and no rate is mentioned, the legal rate of interest prevailing in the State where the note is made payable is understood.

Accumulated Dividends. The dividends which have accrued but not been paid on "cumulative" (which see) stock. Accumulative. See "Cumulative."

Acknowledgment. A certificate of the proper officer that the maker of a written instrument has appeared before him and declared it to be his wilful act and deed.

Acquittance. A written agreement relieving one from the necessity of making a payment of money.

Active Account. Bank deposits against which many checks are drawn, and at frequent intervals; accounts with brokers which show many transactions.

Active Partner. One actively engaged in the business, and who incurs full liability, as distinguished from "silent partner" and "special partner."

Active Stocks or Bonds. Securities which are frequently bought and sold; quoted daily, or nearly so, in the newspapers or reports of the various stock exchange transactions. When trading in a security ceases for any considerable time, it becomes inactive."

Actual Rates. See "Posted Rates."

Actual Reserve. The same as Reserve Held."

Actuary. A person skilled in the theories and mathematical calculations on which life insurance is founded and conducted. He computes mathematically the reserve upon policies, premiums, surplus, dividends, and performs any other mathematical calculations needed in the practice of the company. The study of death rates always has been, and must continue to be, a very important item in the activity of the "actuary," and the measuring of probabilities based on his calculations is one of his most responsible duties.

Adjustment Mortgage Bonds. There are very few of these in existence, the most notable example being that of the Atchison, Topeka & Santa Fé Railway Co., which, in the reorganization of 1895, scaled down its original first mortgage to 75%, for which new first mortgage bonds were issued, and the difference, namely, 25% of the principal, and the defaulted interest, adjusted by issuing other bonds. These were accumulative "income bonds" for the first five years and then became a fixed obligation. These are known as "adjustment mortgage bonds."

Administrator (or Administratrix). A person named by the