F

"F" is promoted by an investment banking house which supplies a portion of the junior capital and finds a market among its own customers for the preferred stock and debentures, allowing the outside investors to secure about one-half the equity or common stock. It is so organized that the investment banking house which promoted it furnishes the personnel for the management and the management may buy or sell any security for the account of the trust, which in their uncontrolled discretion they deem satisfactory, regardless of their personal interest in such securities or any profit that they or any organization in which they are interested may derive from such a transaction.

Thus we see some of the various types. Some have international diversification while others confine their investments to the United States. Some buy many securities while others buy few. Some have simple capital structure as compared to the complex structure of others. The management and promotion compensations are clearly defined and moderate in some, but involved and very generous in others. There is a strong suggestion of water in the common stocks of some, while others have no dilution in the capital structure. Some pay small cash dividends and put capital gains back into principal while others use certain parts, at least, of the capital gains to enhance the dividend distributions.

A sharp line of distinction is now being drawn between the fixed or rigid type of Investment Trust, which depends entirely upon foresight rather than upon current management and judgment, as compared to the discretionary or management type of investment trust in which the funds are placed in the hands of the management to be invested at their discretion in the securities which they deem most suitable for the purposes of the fund. In most cases the rigid or fixed trust is so set up that the certificate holders may call upon the depositary to deliver to them the underlying securities or to liquidate the underlying securities and deliver the cash equivalent less a small charge for liquidation.

An important item for the investor to check is the amount of common stock issued, one way or another, to the organizers. All income increases and all appreciation must be reflected in the common stock, so, if the investor receives only a small percentage of the common for his capital, he will share on a relatively diminished scale in the profits and appreciation of the investment trust.

The general investment trust movement is here to stay because it has been founded upon considerable research which has apparently proved the wisdom of following certain simple cardinal policies of investment management, that is, ample diversification and proper division of funds between different types of securities during various phases of business activity. The recognition of and adherence to clear, simple, and practical investment policies are vital. In the final analysis, however, the most important element in the examination of any such organization is the accurate appraisal of the men in whose hands the responsibility and authority of management is placed. Success or failure is more closely allied to these factors than any other.

Investor. One who purchases investment securities in the expectation of receiving interest or appreciation in value; generally used of a buyer of investment securities primarily for their interest return with maximum safety as distinguished from a speculator who trades in securities having a greater risk element with the hope of larger profits.

Investors Record. A book suitable for an investor to make a record of the essential features of all the securities which he holds. These books, often in loose-leaf form, usually contain pages for recording Bonds, Stocks, Mortgages, Income, etc. (see care of Securities).

Invisible Imports. A term used to describe those intangible items which make up the balance in international trade as distinct from the tangible and readily traced items of merchandise and specie. Invisible imports are usually payment for services, purchase of foreign securities, expenses of tourists, and similar charges.

Invisible Supply. The amount of grain, or other product, in the possession of the farmers, etc., and which has not yet reached the elevators or large centres, as is explained under "Visible Supply."

Invoice. An account, descriptive of goods sold, with prices, etc., furnished the buyer by the seller.

Involuntary Bankruptcy. See "Bankrupt."

Irredeemable Debentures. In Great Britain, for example, there have been issued many railroad company debentures (see "Debenture Bond ") which have no fixed dates of maturity, as in the case of our bond issues, but which are irredeemable; perpetual; more like a preferred stock.

The English railroads labour under this disadvantage: many of these "irredeemable debentures " bear a high rate of interest, which is a perpetual charge upon the companies.

It would be of great advantage to them if, in times when low interest rates were prevailing, these issues might be converted or "refunded," as we say, into lower interest-bearing securities, and thus an interest saving for all time to come be accomplished. The irredeemable feature prevents this, however. Irredeemable Paper Money. See "Inconvertible Paper Money."

Irregular. Many variations in prices; some securities advancing, others declining.

Irrevocable. Something which must remain in force; cannot be recalled. An irrevocable "power of attorney" (see the subject in quotations), for illustration, is one which is not subject to recall or cancellation.

Irrigation Bonds. In many sections of the West, in order to successfully carry on agriculture, artificial irrigation must be maintained. Companies are sometimes formed which undertake this work, and which issue bonds for the purpose of raising money towards defraying the cost. Again, sections of a State may be set aside in the form of a district, called an "irrigation district," which may be authorized to issue bonds for irrigation purposes, and which are payable from taxes levied upon all the taxable property in this district. This is a form of municipal bond, and, likewise, is somewhat of the nature of a special assessment bond."

Matters to be considered before investing money in bonds of this kind, whether issued by company or district, are: First, the general character of the section benefited; whether by the artificial application of water a fertile and productive agricultural section is produced. Next, the water supply; its permanency, sufficiency, and the legal right to use the required amount. Again, the class of settlers or farmers dwelling in the irrigated section. Of course the near location of a market and transportation facilities are also important.

I. S. C. Interstate Commerce.

Isle Royale. The Isle Royale Copper Co.

Issue House. See "House of Issue."

Issue Par. The price at which a security is first sold, or issued, regardless of its actual face value.

Issue Price. The price at which an issue of securities is offered to the public. In the case where an issue had been previously underwritten, "issue price" is used in contrast to underwriting price," the difference in the two prices representing the underwriter's profit, from which certain commissions or other expenses may be deducted.

Item. Each check or draft, etc., which a bank presents at

the "clearing-house" is referred to as an "item." Cannon states, "The word is frequently employed in combination with a qualifying term, as, for example, 'collection items,' out-of-town items,'' city items,' etc."

J

Jacking Up. See " Jackscrewing."

Jackscrewing. Fortunately an uncommon term. It is a pity that the financial writers of newspapers cannot find more fitting words to express their meaning. Jackscrewing means putting great power, as it were, beneath the market and forcing prices up to unnatural levels. The comparison to the great power of the builders' " jack," by the use of which enormous buildings can be lifted, or forced upwards, explains the application.

Jail Bonds. A form of municipal indebtedness created for the purpose of building or enlarging a jail and, usually, a county obligation.

J. A. J. O. January, April, July, October; interest or dividends payable quarterly, beginning with January.

J. and D. Interest or dividends payable semi-annually, June and December.

J. and J. Interest or dividends payable semi-annually, January and July.

Jeweller's Bar. For use in the manufacture of jewelry, etc., fine gold is cast in the form of small ingots or bars, valued at about $100 and upwards.

Jobber. An English term referring to a London Stock Exchange member, who deals only between other members of the Exchange, and is distinguished from the broker, who, although also a member of the Exchange, executes orders for the general public. The broker, however, deals directly with the "jobber" (it being contrary to custom for the brokers to negotiate with each other), who, at request, submits a buying and selling price on each security, the broker having the privilege of making a transaction either way in accordance to the desire of his customer. The "jobber," of course, buys for his own account and may properly be termed a "middleman."

The use of word "stock-jobber" in London dates back to 1688.

Jobber of Exchange. One who sells "exchange" to banks and other dealers in "foreign exchange," who resell to their own clients. The "jobber " might be termed the wholesaler

of "exchange," and those with whom he deals, the retailers.

Jobber's Turn. A London Stock Exchange term. (See "Jobber.") The "turn" is the profit which the "jobber makes on a transaction with a "broker," but it is understood that one party to the transaction is the "broker" and the other party another jobber." When trading between brokers, that is, buying from one broker, for instance, and selling to another, he really makes two "turns."

Joe. See "Fourpence."

Joint Account. Two or more persons having mutual or joint" interest in a venture or enterprise. A simple example: Two bankers buy $100,000 bonds at 98 "on joint account.' These bonds are sold at 100. There is, therefore, $2,000 to divide between the two bankers, each being first allowed to charge up all his expenses incurred in the transaction. The conditions of each "joint account" may vary greatly. One banker may carry "all the bonds and be allowed a special profit for so doing; or, each may be allowed. a commission for all bonds which he sells; or other conditions depending upon the details of each individual transaction.

A "joint account" in " exchange" has reference to a division between the banker drawing the "exchange" and the one expected to honour it, of the profits arising from loaning the proceeds in the latter's market at the prevailing (high) rates of interest. (See "Sterling Loan.")

Joint and Several Note. In a note of this kind any one of the signers can be held responsible for the entire amount of the note in case of inability to pay on the part of the other, or they can all be held equally if each is financially able to meet his proportion. In other words, they are liable for its payment all together, and liable for its payment individually. (See "Joint Note.")

An ordinary promissory note beginning" I promise to pay," and then signed by each of the parties, or by a firm, as "Good & Company," is a "joint and several note; " also one reading, "We jointly and severally promise to pay," signed as above. Some States make all obligations of two or more persons "joint and several " unless the instrument expressly provides that the obligation shall be "joint " only.

Joint Bonds. There are not many such bonds in existence. The best example is the " joint bond" issued by the Northern Pacific and Great Northern Railroad Companies. The majority of the stock of the Chicago, Burlington & Quincy Railroad Co. was purchased in the interests of both the Great Northern and Northern Pacific Railroads, and a "joint bond," so-called, issued, being the direct obligation of both