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How to open a Trust Company Account. See "Trust Company Account."

Hung Up. To own anything undesirable; something which either cannot be disposed of at all, or without loss.

Hydro-Electric Securities. See page 146.

Hypothecate. To place on deposit collateral security; stocks, bonds, etc., as a pledge for a loan.

I

I. C. C. Interstate Commerce Commission.
Ice. American Ice Securities Co.

Illinois Central. Illinois Central R. R. Co.

Immediate Shipment. A Chicago Board of Trade term, calling for shipment within three business days.

IMP. The" ticker" abbreviation for "improvement."
Imperial Bank of Germany. See "Bank of Germany."
Import Point of Gold. See "Gold Import Point."
Improvement. See "Betterment."
Improvement Bond. See next subject.

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Improvement Mortgage Bonds. A “junior mortgage usually understood. An "improvement mortgage secures an issue of bonds necessitated in order to provide funds for improvements, additions, betterments, etc., to a property. As in the case of a "general mortgage bond," it is customary to make the authorized issue large enough to also provide for future improvements when needed, and to replace earlier mortgage bonds as they mature or can be paid off. Their investment value depends not only upon the credit standing of the company, but upon the amount of bonds whose claims must be satisfied first, the character of the improvements for which issued, etc. Consider them from the standpoint of at least a "second" and probably a "third mortgage bond."

An issue of this class is that of the Denver and Rio Grande R. R. Co. Gold 5's, brought out to provide means for laying a third rail to broaden the narrow-gauge road to standard gauge and for other improvements.

"Street improvement," and " public improvement " bonds, among the municipal issues, are often referred to as "improvement bonds."

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"In case the person cannot write his name I write it for him 'by W. S. Tibbets, Treas.,' and let him make a cross over it.

"In case of deposits by an executor, administrator, guardian, or one person for another, after he enters the name in the signature book he writes by' and affixes his signature, and then fills out the card for the other person."

IN. The "ticker" abbreviation for "income."

Inactive Account. A bank account against which very few checks are drawn and at infrequent intervals, and to the credit of which deposits are not often made; or an account with a broker which shows infrequent purchases and sales on the part of the customer.

Inactive Market. When sales are growing less in volume and transactions are few and for small amounts.

Inactive Stocks or Bonds. Securities which are bought and sold only at infrequent intervals; seldom quoted; difficult for the public at large to ascertain the market value of. There are brokers, or bankers, in nearly every important city who make a business of dealing in inactive securities in general, or are specialists in regard to certain ones. (See "Active Stocks or Bonds.")

In and Out. A speculation of short duration, as a purchase of a certain stock followed by a quick sale of the same.

In-Clearer. The English term for a bank clerk who enters in the bank's clearing books at the "clearing-house" the items against his bank as received, and who determines the "clearing-house balance" for his bank. This term distinguishes him from the "out-clearer," who is the clerk at the bank making similar records of items against other banks for collection. (See subjects in quotations.)

Income. The income of an individual is generally supposed to be the money returned to him yearly from his investments; the interest return from his stocks, bonds, mortgages, real estate, etc. Of course, the meaning can be extended to include profits from a business, or gains of all kinds, and such is the usual dictionary meaning; but in finance there has been a general tendency to mean only the return from money invested outside of one's direct business, if he has any. The income from a stock arises from profits of the corporation, and is divided among the stockholders in the form of dividends, and may vary from time to time.

The income from bonds and mortgages is generally a fixed amount and is called interest.1

1 Edwin A. Howes, Jr., raises this point, which is well to bear in mind: "Income of property consists of the proceeds of what the property produces, the profit which comes from its use in business, or what is paid for its use by another than its owner. Principal, or capital, is the property itself. The absolute owner of the property is likely to treat as income, not only the earnings of the principal property, but all increase which comes from an increase in the value of the property itself, treating as principal what he paid for the property, and as income all excess over the original investment. A person entitled to the use or income of property, or a trustee whose duty it is to pay income to one person or set of persons, hold

Income Basis (or Return). See "Net Return upon the Investment."

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Income Bonds. There is in effect little difference between "income bonds" and "preferred stock," except that upon the former the interest is expected to be paid if earned. The management may decide otherwise, however. Such a bond is usually secured by a pledge of the net earnings of the corporation after payment of interest and sinking fund, if any, upon all indebtedness having a prior claim. An income bond" may be "cumulative;" that is, if the earnings in any one year do not suffice to pay the interest, the sum lacking is carried forward into following years until paid in full. Also called "Preferred Bonds," or "Preference Income Bonds," if having some preference rights over other issues. They are sometimes redeemed by " sinking funds" and in some instances acquire mortgage rights if interest is unpaid, or if principal is unpaid at maturity. In the case of there being no mortgage rights, "income bonds" are often known as "debenture incomes." If they carry the convertible feature, as set forth under "Convertible Bond," they are termed "convertible incomes."

A bond issue of this nature may have a detrimental effect upon the value of all stocks of a company, as it lessens the likelihood of dividends upon the same.

This is not an investment class of securities. Too much depends upon the board of directors.

Inconvertible Paper Money. Money for which there has not been provided satisfactory, if any, arrangements for its conversion into standard money. This is also referred to as irredeemable paper money.'

"

Incorporate. See "Corporation."

Indenture. This is generally understood to be a contract, an agreement under seal, or a deed between two or several parties. The name arises from a custom of drawing a deed with the edge indented for identification and greater security. Blackstone says: "If a deed be made by more parties than one, there ought to be regularly as many copies of it as there are parties, and each should be cut or indented . . on the top or side, to tally or correspond with the others; which deed, so made, is called an indenture.” 1

Independent Telephone Companies. See "Telephone Securi

ties."

ing the principal for others, must be more careful to distinguish between real income and increase which comes from an increase in the value of the property.' - The American Law Relating to Income and Principal. i Blackstone's Commentaries.

India Council Bills. See "Council Drafts."

India Council Drafts.

See "Council Drafts."

India, Money of. See "Rupee."

India Rupee Paper. See "Rupee Paper."

Indirect Exchange. Same process as explained under "Triangular Operation."

Individual Deposits. The "bank statement" is frequently tabulated in such form as to subdivide the deposits. "Individual deposits," therefore, would have reference to all deposits other than by banks and trust companies, United States Government, or from the banks' agents. It would include deposits of firms, individuals, corporations in general, private bankers, etc.

Indorse. The person to whom a check, note, or draft is made payable is called the " payee." If the payee wishes to make the check (note or draft) good in the hands of some one else, he writes his name across the back of the check, in accordance with the wording as filled in upon the face. This is called "indorsing." For instance, a check made payable to John J. Smith upon the face, should be signed by him across the back, "John J. Smith," not "John Smith." If it is an error and his name should really be John Smith without the middle letter " J," and it is not convenient to get a new check issued in correct form, he may sign his correct name also under "John J. Smith," thus signing both, although, of course, this latter method may not be asked for by the party about to receive the check. He should demand this, for, when he in turn indorses it, he guarantees all previous indorsements and, in case the check proves worthless and recourse is taken against John Smith, it may simplify matters that Smith be given no opportunity to set up the defence that it was not his legal signature. Again, if a check should be drawn to Mrs. John Smith she should indorse it that way, and then under it her legal name, Susan Smith.

If a check is presented for payment and there is no money on deposit to meet the same, the check having passed through the hands of several different people, each in turn indorsing it, the last holder, who presents it to the bank for payment, may fall back upon any previous indorser he sees fit. It is not necessary for him to take legal action against the last signer, and so on back in reverse order of the indorsements. In indorsing a check remember that unless the indorser adds the words without recourse "" he may be held liable for the amount of the check. This, as set forth under "Without Recourse," does not imply that the condition may be generally made use of. (See that subject, as well as "Check.")

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All that is said above in regard to a "check" applies with equal force to notes, and all such papers that pass by "indorsement."

When one or more persons "indorse" a note, thus becoming liable for its payment, in the case of failure on the part of the "maker" to meet it, they assume liability for the note only as originally made and no holder can recover from the "indorsers," provided the former allows any change in the note's original terms. For instance, suppose a note falls due and the holder renews it; that is extends the time of payment without permission of the indorser; by this act the latter would be relieved of all liability. A holder of a note with indorsements must present it for payment upon the day of its maturity, for failure so to do relieves the indorsers of all liability. Although the holder of a note may have received collaterals from the maker, he is under no obligation to proceed on the collateral before suing the indorser.

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In "indorsing" a check, hold it face upwards, and observe the left-hand end as it then lies; turn it over and make the "" indorsement on the back across that end. This is not obligatory, but makes it much more convenient for the handling by bank clerks, and others.

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In indorsing a check, note, etc., making it payable to John Smith, for instance, use the wording: "Pay to the order of John Smith." This will enable John Smith to again "indorse it and pass it on from hand to hand, that is, make it negotiable.

Occasion sometimes arises when one person wishes to deposit a check to the credit of another, the check being payable to the latter, but it not being convenient to get his indorsement. To illustrate: A banking house-James Crow & Co. may wish to pay Paul Jones $1,000 on account of collections made, or for other reasons. Instead of sending the check to Paul Jones, they may have received instructions to deposit it in his bank to his credit. The following is a complete wording that banks may require: "Pay to the order of Bank, for the credit of Paul Jones, by James Crow & Co., Attorney." In practice, however, banks usually take checks with the simple indorsement, "Paul Jones, by James Crow & Co.," or simply "Deposited for the credit of Paul Jones," but the first is technically correct; and, in such a case, the bank does not require that James Crow & Co. shall hold the actual power of attorney for indorsement, but they accept them as attorneys for the occasion without any evidence of authority, but this is done at the risk of the bank.

On any checks issued by the United States Treasury at Washington, the last indorsement, that is, the indorsement of the one presenting for collection, must be in hand-writing, as

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