LIMITATIONS "1. No loan may be made except upon the security of first mortgages. "2. The amount of the mortgage can not exceed one-half the appraised value of the land and 20 per cent of the permanent improvements thereon, which must be insured. "3. The proceeds of the loan must be used for the extinguishment of preexisting indebtedness or for productive purposes, which include the purchase of live stock, fertilizers, equipment, and improvements. "4. Every mortgage must contain an agreement to pay off the debt (principal and interest) in fixed annual or semiannual installments. "5. The amount of each installment may be fixed by the borrower, but can not be less than sufficient to pay off the debt in 40 years, nor greater than to pay it off in 5 years. "6. The rate of interest charged any borrower can not exceed 6 per cent per annum. ". The borrower can not be called upon to pay the debt except by the installments he originally fixes unless he defaults, but after five years he may pay off the whole or any portion at his option at any installment period. Under the amortization plan the term of the loan and the amount of each installment are relative; determining one fixes the other.” Federal Reserve Act. See end of book. Federal Reserve Bank. (First read "Federal Reserve District.") In each district, an important city has been selected where the "Federal Reserve Bank" of that district is located. This bank takes the name of that city, as "Federal Reserve Bank of Chicago." (See "Federal Reserve Bank Act," at end of book, for more details. The powers of these banks are given in Secs. 13 et seq.) Federal Reserve Board. Under the terms of the "Federal Reserve Act" (see end of book), a "Federal Reserve Board" was created, consisting of seven members, including the Secretary of the Treasury and the Comptroller of the Currency who are members ex-officio- and five others appointed by the President of the United States, by and with the consent of the Senate. This board has very broad powers over the banking and monetary system of the nation. (See Sec. 11, "Federal Reserve Act.") Federal Reserve District. The "Federal Reserve Act" (see end of book) provided for the selection of not less than eight nor more than twelve cities, to be known as "Federal Reserve Cities"; for the division of continental United States, exclusive of Alaska, into districts; each district to contain only one of such Federal Reserve Cities. These cities were to be apportioned with due regard to the convenience and customary course of business, and were not necessarily to be coterminous with any State or States. There were twelve districts so set apart by the Reserve Bank Organization Committee. These districts may be readjusted, but the number must not exceed twelve. These are the "Federal Reserve Districts,' and are designated by number. Federal Reserve Notes. Each Federal Reserve Bank shall have the power, upon deposit of government bonds with the Treasurer of the United States, to receive, in exchange therefor, circulating currency, or bank notes, under the same conditions and provisions of law as relate to the issue of circulating notes of national banks (see "National Bank Notes"). In addition, "Federal reserve notes" may be issued at the discretion of the "Federal Reserve Board" for the purpose of making advances to "Federal Reserve Banks" through the "Federal Reserve Agents" for certain purposes as set forth in Section 16 of the "Federal Reserve Act" at end of book. FPD. The "ticker" abbreviation for "full paid." Federal Reserve System. See "Federal Reserve Act." Fixed Charge Stocks. An English term for their "debentures," to which refer. Floaters. All "bearer" certificates, but more particularly certain British Government stock certificates in which the name of the owner is not inserted by the Bank of England where it is transferred are called "floaters." In such a case, no name denoting ownership is entered at the bank, but coupons to cover five years are furnished with the certificate, to be presented for the collection of dividends as due. So long as the certificate is left blank in this way, its ownership passes by delivery. For Cash. One buys or sells "for cash" when doing so for actual full payment and delivery. Forward Prices. Prices for "bar silver," or for any commodity for future delivery. Four D Banks. A term sometimes used to designate the four great banks of Germany having "D" for the first letter of their corporate names, viz., the Deutsche Bank, the Dresdener Bank, the Direktion der Disconto-Gesellschaft and the Darmstädter Bank und National Bank. Fractional Warrant. (First read "Rights.") The small stockholder is often faced with the problem of not owning a sufficient number of shares to entitle him to a full share of new stock. His position was definitely settled some years ago, when the Chicago, Milwaukee & St. Paul Rwy. Co. offered its stockholders the right to subscribe to a new issue. The company, at that time, declined to issue "fractional warrants," as they were called, so that holders of a smaller number of shares than four (the number required to subscribe to one share of common stock, for instance) could not sub scribe. The company was compelled, through the courts, to issue these "fractional warrants," thus giving the smallest shareholder the same proportionate privilege as that accruing to the larger. These fractional "rights" can be sold in the open market the same as full "rights," but the purchaser must secure enough more fractional "rights" so that he shall have the correct number to entitle him to subscribe to a share of stock. Most corporations have followed the practice of issuing fractional warrants since the court decision above referred to. G. M. B. A term used only by dealers in copper, meaning "good merchantable bar (or brand)," i. e. standard salable copper. (See "Standard Copper.") Give On. See "Continue" - meaning the same. Givers. (First read "Contango.") Those i. e. the "bulls"-who do not wish to pay for and accept delivery of stocks bought, and thus are willing to give the "contango" rate in order to either delay the delivery until the next "settlement," or to others to "carry" the stock for them in the meantime. (See "Takers-In.") Goldfields. Used in London to designate the ordinary shares of the Consolidated Goldfields of South Africa. Goods. As defined by the Federal Reserve Act, this term "shall be construed to include goods, wares, merchandise, or staple agricultural products, including live stocks." Government Deposits. See Sec. 15, "Federal Reserve Act." Grain Paper. Short time notes for the payment of which grain is pledged, or the plain notes of dealers in grain whose credit is sufficiently well established so that it is not necessary for them to secure their indebtedness by any of their stock in trade. Gravel Road Bonds. Bonds bearing this title have been issued in Indiana for the purpose of defraying the cost of grading, draining, and surfacing roads with gravel. They have invariably been "special assessment bonds" (to which subject refer). The issues are limited to 4% of the assessed value of the . township. They are tax exempt when held by residents of Indiana, and may be legally purchased by Insurance Companies of that State. Half. In London, £1,000 value in "stock" is spoken of as "one," and £500 as "half." Hammer-Price. See "Hammered." Havanas. Used in London to designate the ordinary stock of the United Rwys. of Havana. Higgling of the Market. Adam Smith applied this term to operations by which the market price of an article was kept within desired bounds - prevented from either going too high or too low. House (The). That part of the London Stock Exchange where the trading is done is called "The House." Incontestable Policy. A life insurance policy which does not condition its payment, in case of death, upon the insured not having committed suicide. Indeterminate Mortgage. This is more popularly termed an "open end mortgage," to which subject refer. Indian Bazaar. An East Indian exchange or market place. Indigo Thursday. The stock market panic of May 9, 1901, known as the "Northern Pacific corner" (more fully described under "Selling Short"). Sometimes referred to as "Blue Thursday." Indulgence. To extend the time for the payment of an obligation. Inflation. The advance in prices and increase in bank resources are not due to currency inflation, for on July 1, 1914, the ratio of money in circulation to the total bank resources was 13%, and on July 1, 1920, money outside of Treasury and reserve banks was only 10% of total resources of national and State banks. (See "Gold Inflation.") Inland Bills. Drafts drawn against other points in the same State. Inscribed Stock. The English use this term and also "registered stock," but with different meanings. A company will issue to the original subscriber to its stock a certificate evidencing the fact that upon its books he is registered as a holder of so much stock. This piece of paper, however, does not necessarily prove title, nor constitute ownership -it is nothing more than a memorandum by which the company declares that the one named therein is a holder of the stock in question. To transfer this stock, it is necessary, upon delivery of the certificate to the buyer, for the seller to accompany it with what is known as a "deed of transfer" (see that subject), and the company will not register the new owner as a holder of the stock until this transfer deed is presented, when the original certificate will be destroyed and a new one issued in its place. Even though this certificate, as stated above, is not considered prima facie evidence of actual title to the stock which it describes, yet companies will usually decline to make a transfer unless the certificate is produced. Therefore, its loss may occasion considerable annoyance and expense before its replacement may be brought about. Roughly speaking, the main points between "registered and "inscribed stock" is in the matter of transfer. The former is much like unto the American custom of transferring stock certificates, the English "deed of transfer" corresponding to the blank form with which the American stock certificate is provided upon its reverse side; whereas, to transfer "inscribed stock," its owner or legal representative must actually visit the office of the company or bank where such list is kept. "Stock" is always "registered" or "inscribed"; whereas "shares" may be either "registered" or in the form of "bearer securities" (to which subjects refer). Most of the dealings upon the London Stock Exchange are in "registered" rather than in "inscribed" securities. Interim Dividend. A dividend paid in anticipation of the final dividend of the year. Interlocking Director. One who serves on the board of two different corporations in much the same line of business, and the competition between which may be partially or entirely destroyed on account thereof. J. B. "Joint Bonds." See that subject. Joint Bid. A bid bearing the signatures of two or more parties. Joint Stock Land Bank. Congress in 1916 passed the Federal Farm Loan Act, "to provide capital for agricultural development, to create standard forms of investment, based upon farm mortgage, to equalize rates of interest upon farm loans, to furnish a market for United States bonds, etc." The banks operate under Federal Charter and government supervision and the bonds are "instrumentalities" of the Government. The Act has been proved to be constitutional and the bonds free from all except inheritance taxes. These banks are privately controlled and the stockholders have a double liability. (See "Federal Farm Loan Banks and Government Bonds.") Letter of Regret. (First read "Allotment." When a banking house brings out an issue of securities, those who have made an unsuccessful application are notified in a "letter of regret" that they have not been allotted any of the issue. Letter of Renunciation. (First read "Allotment.") This is a form attached to an "allotment letter" by which the rights of the one to whom shares have been allotted are renounced in favor of another. Liberty Bonds. Four issues of U. S. Government bonds made to raise funds to carry on the World War (1917-1918). See "Government Bonds.' Lift a Mortgage. To pay it off. |