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STOCKS, DIVIDENDS, AND BROKERAGE.

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STOOKS, DIVIDENDS, AND BROKERAGE. 491. An association of individuals formed for the purpose of transacting business is a company or partnership.

492. An association of individuals authorized by law to transact business under a company name, to hold property and be liable for debts in that name as au individual woulu be, is a corporation.

493. When a corporation is formed for transacting busi ness, the persons forming the corporation subscribe what money is needed for conducting the business. This money is called capital stock. This stock is divided into shares, usually of $ 100 each.

494. The owners of the stock are stockholders. As evidence of their ownership, they hold papers called certificates of stock. The stockholders form the corporation and elect directors, who are responsible for the business transacted.

495. A sum levied upon a stockholder to help meet the expenses or losses of the business is an assessment.

496. The gain upon the capital of a corporation is divided among the stockholders. Gain thus divided is called a dividend.

Each stockholder's part of the dividend is the same per cent of his stock that the whole dividend is of the capital.

497. Stocks may be bought and sold like other property. Persons who make a business of buying and selling stocks are called stock-brokers. The commission paid to a broker is called brokerage.

NOTE 1. When a share of stock will sell at its nominal value, it is at par; when for more than its nominal value, it is above par, or at a premium ; when for less than its nominal value, it is below par, or at a discount.

NOTE 11. The market values of stocks are quoted ” daily in the prin: cipal newspapers, at given per cents of their values. When a stock is quoted at 90, it is worth 90% of its face or nominal value ; it is then 10% below par. When quoted at 105, stock is worth 105% of its face or nominal value ; it is then 5% above par.

498. The rules of percentage already illustrated apply to stocks, dividends, and brokerage.

Examples for the Slate. 499. The following quotations are taken from a daily paper :

Sales of Stock this day at the Brokers' Board. 70 Chicago, Burlington, & Quincy R. R.

1037 150 Burlington & Mo. R. R. in Neb.

431 $5000 Atchison, Topeka, & Santa Fé 7's, 1st mortgage...

887

AT AUCTION.

15 Bates Manufacturing Co. 80 | 8 American Watch Co......... 904 12 Neptune Insurance Co.. 1224 5 Metropolitan Bank.... 928

5 Maverick Bank. 1508 40 Boston & Albany R. R. ... 125 10 N. England Bank 135 | 36 Nashua & Lowell R. R. ... 944 At the above quotations, what is the cost

70. Of 3 shares in the Maverick bank, and 7 in the Metropolitan?

71. Of $ 2000 Atchison, Topeka, and Santa Fé 7's ?

72. Of 8 shares in the Bates Manufacturing Co., and 7 in the Neptune ?

73. Of 75 shares in the Burlington and Missouri, including 1% brokerage on the par value?

NOTE. Brokerage is usually 4%, and reckoned on the par value. It is thus reckoned in this book, unless otherwise specified.

At the above quotations, what is the cost, with brokerage,

74. Of 10 shares Boston and Albany R. R., and 25 Nashua and Lowell ?

75. Of 15 shares in the Chicago, Burlington, and Quincy R. R., 5 shares in the American Watch Co., 40 shares in the New England Bank, and 12 shares in the Neptune Insurance Co.?

below par.

76. What is the value of 7 shares in a gold company's stock at 48% above par, the original value being $ 200 per share ?

77. A dividend of 3% having been declared by a gas company, what should a stockholder receive who owns 700 shares, the par value of each share being $ 100 ? 78. A broker sold a lot of stock for $2250, which was 10% What was the

par

value ? 79. When stock, originally worth $ 30 per share, sells for $ 45, at what % above par does it sell ?

500. From January, 1862, to January, 1879, paper currency was below par. The value of gold as compared with it was given from day to day in the newspapers.

80. When gold was quoted at 1024, how much paper currency could be bought for $200 in gold, no allowance being made for brokerage ?

81. If the passage to Liverpool was $ 125 in gold, when gold was at 103}, what was the cost of two tickets in paper currency?

82. In 1878, I sent to Ireland 6 pounds sterling, valued at $4.86 each in gold, what did I pay for them in paper money, gold being at 1025, and brokerage { %?

83. Stock at par is what per cent of stock at 103?

INSURANCE

501. A, owning a house, agrees to pay B a certain percentage on its value, B on his part agreeing to pay A the whole value of the house in case it should within a limited time be destroyed by fire. Such a contract is a contract of insurance; and A's house is said to be insured.

502. Insurance is security against loss.

503. Fire insurance is security against loss of buildings or goods by fire; marine insurance is security against loss of ships or cargoes at sea ; accident insurance against loss by accident in travelling or otherwise ; health insurance secures a stated allowance during sickness, and life insurance secures a certain sum to one's heirs or assigns in case of death.

504. The parties that insure are called insurers or underwriters.

505. The written contract that binds the parties is the policy.

506. The sum paid for insurance is the premium. Note I. When property is insured, the valuation or amount insured is generally made less than the value of the property.

Note II. Policies are renewed yearly, or at stated periods, and the premium is paid in advance.

507. The premium is a PERCENTAGE of which the sum insured is the base. Hence the rules of percentage already illustrated apply to insurance.

508. Examples for the Slate. 84. What is the insurance on $ 1500 worth of goods at %, including $1 for the policy ?

85. What amount is paid for insurance on of a store valued at $ 15600 at %, including $1 for the policy ?

86. A merchant insured a cargo from Liverpool worth 2000 pounds at a premium of 1}%. What was the premium, the pound being valued at $ 4.86 ?

87. A merchant insured $3600 worth of goods in one company at 1} % premium, and $ 2500 worth in another at 14% premium. What was the cost, including $1 for each policy?

88. A druggist paid $ 125 for the insurance of a lot of goods in transportation. If the face of the policy was $ 10000, what was the rate of insurance ?

89. Jan. 1, 1876, a person took out a health policy, paying $ 1.50 on the first day of each month. March 2, 1877, he was disabled by sickness, and received $ 12 a week for 3 weeks. How much did he receive more than he paid out for premiums ?

of the per

The yearly rates of life insurance depend upon the

age son when he begins to insure, younger persons paying less per year than older persons, because they are likely to live longer. Thus A, being 35 years old, pays $ 109.50 a year for a policy of $ 5000, while B, who is 40 years old, pays $ 131.50 a year for a policy of the same amount. The number of years that a person of a given age is likely to live is called his expectation of life.

90. At the age of 38, I secured a policy upon my life for $ 5000, paying the first year $122.55, including $1 for the policy. What was the premium paid upon $ 1000 ?

91. Jan. 1, 1868, a man took out a policy on his life for $3000, in favor of his wife, paying $21.30 on $ 1000 yearly. If the man died Feb. 15, 1878, how much did the widow receive more than had been paid in premiums?

TAXES.

509. The citizens of a town or city or the members of a society usually meet the expenses of their government or society by a sum assessed on their property, their income, their business, or their persons. Such a sum is called a tax.

510. A tax on the person of a citizen is called a poll tax. A tax on property is called a property tax. A tax on annual income is called an income tax.

511. Movable property, such as money, stocks, cattle, ships, etc., is called personal property. Immovable property, as lands, houses, etc., is called real estate.

512. Officers appointed to estimate the value of property and to apportion the sum to be raised among the individuals are called assessors.

513. A property tax is reckoned at a certain per cent on the estimated value of each person's property, or at a given number of mills or cents on $1, $100, or $1000.

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