Bank, worth 104 %, exchanges them for United States bonds worth 105 %; how much of the latter stock does he receive? 15. I purchased 12 shares of stock at a premium of 5 %, and sold the same at a loss of $96; what was the selling price? 16. Having bought $64000 stock in the Cunard Line, at 2 % premium, at what price must I sell it, to gain $2560?

Ans. 106 %.

17. A speculator bought 250 shares in a Carson Valley mining company at 103 %, and 150 shares of the Western Railroad stock at 95 %; he exchanged the whole at the same rates, for shares in the N. Y. Central Railroad at 80 %, which he afterward sold at 85 %. How much did he gain? Ans. $2500.

18. I purchased stock at par, and sold the same at 3 % premium, thereby gaining $750; how many shares did I purchase?,

19. A broker bought Illinois State bonds at 103 %, and sold at 105 %. His profits were $240; what was the amount of his purchase? Ans. $12000.

20. A man invested in mining stock when it was 4 % above par, and afterward sold his shares at 5% discount. His loss in trade was $760; how many shares did he purchase?

21. I invested $6864 in Government bonds at 106 %, paying 1% brokerage, and afterward sold the stock at 112 %, paying 11% brokerage; what was my gain? Ans. $208.

22. How much money must be invested in stocks at 3% advance, in order to gain $480 by selling at 7 % advance? 03 23. How many shares of stock must be sold at 4 % discount, brokerage %, to realize $4775?

Ans. 50.

INSTALLMENTS, ASSESSMENTS, AND DIVIDENDS.

481. An Installment is a portion of the capital stock required of the stockholders, as a payment on their subscription. 482. An Assessment is a sum required of stockholders, to meet the losses or the business expenses of the company. 483. A Dividend is a sum paid to the stockholders from the profits of the business.

484. Gross Earnings are all the moneys received from the regular business of the company.

485. Net Earnings are the moneys left after paying expenses, losses, and the interest upon the bonds, if there be any.

486. In the division of the net earnings, or the apportionment of dividends and assessments, the calculations are made by finding the rate per cent. which the sum to be distributed or assessed bears to the entire capital stock. Hence,

487. Dividends and assessments are a percentage computed upon the par value of the stock as the base.

EXAMPLES FOR PRACTICE.

1. The Long Island Insurance Company declares a dividend of 6%; what does A receive, who owns 14 shares?

OPERATION.

$1400 x .06

=

$84

ANALYSIS. According to 449, we multiply the base, $1400, by the rate, .06, and obtain the dividend, $84.

2. A canal company whose subscribed funds amount to $84000, requires an installment of $6300; what per cent. must the stockholders pay?

OPERATION.

$6300 84000

= .07

ANALYSIS. According to 450, we divide the installment, $6300, which is

percentage, by the base, $84000, and obtain the rate, .071⁄2

=

7%.

3. A man owns 56 shares of railroad stock, and the company has declared a dividend of 8 %; what does he receive?

Ans. $448.

4. I own $15000 in a mutual insurance company; how many shares shall I possess after a dividend of 6 % has been declared, payable in stock? Ans. 159 shares.

5. The Pittsburgh Gas Company declares a dividend 15 %; what will be received on 65 shares?

6. A received $600 from a 4 % dividend; how much stock did he own?

Ans. $15000.

7. The paid-in capital of an insurance company is $536000. Its receipts for one year are $99280, and its losses and expenses are $56400; what rate of dividend can it declare? Ans. 8 %.

8. The net earnings of a western turnpike are $3616, and the amount of stock is $56000; if the company declare a dividend of 6 %, what surplus revenue will it have? Ans. $256.

9. The capital stock of the Boston and Lowell Railroad Co. is $1830000, and its debt is $450000. Its gross earnings for the year 1858 were $407399, and its expenses $217621. If the company paid expenses, and interest on its debt at 55 %, and reserved $78, what dividend would a stockholder receive who owned 30 shares? Ans. $270.

10. The charter of a new railroad company limits the stock to $800,000, of which 3 installments of 10 %, 25 %, and 35 %, respectively, have been already paid in. The expenditures in the construction of the road have reached the sum of $540,000, and the estimated cost of completion is $400,000. If the company call in the final installment of its stock, and assess the stockholders for the remaining outlay, what will be the rate %? Ans. 171

11. The Bank of New York, having $156753.19 to distribute to the stockholders, declares a dividend of 5 %; what is the amount of its capital? Ans. $2,985,775 nearly.

12. The passenger earnings of a western railroad in one year were $574375.25, the freight and mail earnings were $643672.36, the whole amount of disbursements were $651113.53, and the company was able to declare a dividend of 8 %; how much scrip had the company issued? Ans. $7086676.

13. Having received a stock dividend of 5 %, I find that I own 504 shares; how many shares had I at first? Ans. 480.

14. I received a 6 % dividend on Philadelphia City railroad stock, and invested the money in the same stock at 75 %. My stock had then increased to $16200; what was the amount of my dividend? Ans. $900.

15. A ferry company, whose stock is $28000, pays 5 % dividends semi-annually. The annual expenses of the ferry are $2950; what are the gross earnings? Ans. $5750.

STOCK INVESTMENTS.*

488. The net earnings of a corporation are usually divided among the stockholders, in semi-annual dividends. The income of capital stock is therefore fluctuating, being dependent upon the condition of business; while the income arising from bonds, whether of government or corporations, is fixed, being a certain rate per cent., annually, of the par value, or face of the bonds.

489. Federal or United States Securities are of two kinds: viz., Bonds and Notes.

Bonds are of two kinds.

First, Those which are payable at a fixed date, and are known and quoted in commercial transactions by the rate of interest they bear, thus,: U. S. 6's, that is, United States Bonds bearing 6 % interest.

Second, Those which are payable at a fixed date, but which may be paid at an earlier specified time, as the Government may elect. These are known and quoted in commercial transactions by a combination of the two dates, thus: U. S. 5-20's, or a combination of the rate of interest and the two dates, thus: U. S. 6's 5-20; that is, bonds bearing 6% interest, which are payable in twenty years, but be paid in five years, if the Government so elect.

may

When it is necessary, in any transaction, to distinguish from each other different issues which bear the same rate of interest, this is done by adding the year in which they become due, thus: U. S. 5's of '71; U. S. 5's of '74; U. S. 6's 5-20 of '84; U. S. 6's 5-20 of '85.

Notes are of two kinds.

First, Those payable on demand, without interest, known as United States Legal-tender Notes, or, in common language, “Green Backs.”

* The following eight pages contain four pages of new matter, on U. S. Securities, Bonds, Treasury Notes, Gold Investments, &c., to meet a necessity which did not exist at the time this book was written.

The pupil will find the Cases, Rules, and Operations of the previous editions essentially the same in this, with additional examples, and other matter, which may be used or omitted; so that the present may be used with the previous editions with little or no inconvenience.

Second, Notes payable at a specified time, with interest, known as Treasury Notes. Of these, there are two kinds, Six-per-cent. Compound-interest Notes, and Notes bearing 7% interest, the latter known and quoted in commercial transactions as 7.30's.

The nomenclature here explained is the one used in commercial transactions, which involve similar securities of States or corporations. The interest on all bonds is payable in gold.

The interest on notes is payable in Legal-tender Notes.

When Bonds or Stocks are sold, a revenue stamp must be used equal in value to one cent on each $100, or fraction of $100, of their currency value. If sold by a broker, this is charged to the person for whom they are sold.

The following are the principal United States Securities: