but "wash sales," i.e., fictitious: trades made in the open market, and quoted by parties between whom there is a private agreement that they shall be void; all part of the fine art of manipulation. Some one has said that "ignorance and credulity are at the bottom of most losses in speculation," and he said well.1 The writer's idea of enumerating in the foregoing matter some of the things upon which the successful speculator of the present day should be posted, and some of the things for him to consider, is to cause him to give time for thought and consideration before making a purchase or sale; to cause him to think for himself, act more upon his own responsibility and less upon what he may read and hear. The average stock-exchange broker is sometimes so near the scene of action that, however honestly inclined he may be, he will fail in his judgment. In the preceding pages emphasis is laid upon the investor selecting a banking house of long experience and established reputation with which to conduct his dealings. That same advice is most strenuously offered to those who desire to speculate. Finally, a few suggestions which are almost personal in their character: Keep a record in some form either by the stubs of your check-book, or by a simple system of bookkeeping of your receipts and expenditures, and balance at stated intervals to find where you stand. Do not destroy receipts; they should be kept at least six years. Do not allow a bill which is found correct and deserving of payment to remain unpaid more than twenty-four hours. When doing business with friends or relatives conduct it upon strictly businesslike principles. Always retain copies of business letters sent as well as the originals of all received, having some system of filing the same. In changing your address, notify all institutions or bankers with whom you have any financial dealings, and send notice to all corporations in which you are a stockholder; likewise corporations or municipalities of which you happen to be a registered bond holder. Always write a telegram without punctuation marks. Then, if it reads clearly, send it. If anybody is to do considerable investing, some form of filing information relating to the same, annual reports of the different corporations, etc., is desirable. 1 The stock exchanges use every effort to prevent such methods. Listed below are certain subjects which will be found in the body of the book and which those of limited experience in investment or money matters may read in connection with the foregoing: 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. (See also Addenda.) 1 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. (See Page 236.) 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. Accountant. See "Auditor." 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. |