4. If he sells these 96 shares for $4699.80, what is the rate of discount, and rate of gain ? Ans. 2%; 5%.

5. When gold was at a premium, Mr. Reed gave $7500 in short time notes, at 2% discount, for $6125 in gold; what was the rate of premium on the gold? Ans. 20%.

6. A banker bought 10 shares of stock ($50) at a premium of 10%, and sold them for $600; what was the gain % on the transaction? Ans. 81% gain.

BROKERAGE.

431. Brokerage is a percentage charged by brokers for the transaction of business.

432. A Broker is a person who buys or sells money, stocks, bills of exchange, real estate, etc., for others. A stock broker is one who deals in stocks, but is generally called simply a broker.

433. The Base upon which the commission for the purchase and sale of bonds and stocks is estimated is their par value.

434. The Rate is usually %, and will be so understood when no other rate is mentioned. In New York the rate is % on both bonds and stocks.

435. The Quantities considered are: 1. The Par value of the amount sold, bought, etc., 2. The Rate of Brokerage; 3. The Brokerage; 4. The Market value of $100, or of 1 share; 5. The Entire Cost, or Net Proceeds.

NOTES.-1. Stocks are quoted either at the price of one share, or at th price of $100 of par value of the stock, whatever be the par value of a shar The former method is used in Philadelphia; the latter in New York.

2. Stocks are often named from the rate of interest they draw; thus, we have 4's, 41's, 5's, etc. The time to run or date when due sometimes gives the name; as 4's of '97.

CASE I.

436. Given, the par value, the rate and the market value, to find the brokerage, net proceeds or entire

cost.

1. A broker bought for a party 15 shares Pennsylvania

R. R. ($50), rate of brokerage being 1%; required the brokerage.

SOLUTION. The par value was 15×$50, or $750. The brokerage was .004 times $750, which equals $1.87.

OPERATION.

$50x15 $750 $750.00-$1.87}

Rule I.-Multiply the par value.by the rate, to find the brokerage.

Rule II-Multiply the par value by the market value minus the rate, to find the net proceeds; or by the market value plus the rate, to find the entire cost.

NOTE. It is often shorter to multiply the brokerage on one share, by the number of shares. When the par is $50, one-half the rate should be used

In applying the rule.

WRITTEN EXERCISES.

2. I bought through a broker 46 shares of bank stock ($50) at par, brokerage being %; required the brokerage, and the cost of the stock. Ans. $5.75.

3. A broker bought for me 76 shares of bank stock ($50) at 47; what did the stock cost me, the brokerage being per cent.? Ans. $3619.50.

4. Mr. Lyte sold through his banker 72 shares New York Central ($100), at 1027; required the brokerage, at %, and net proceeds. Ans. Proceeds, $7398.

5. My broker bought on my account 25 shares Bank of North America ($100), at 150, and sold them at 161; what was his commission and my profit? Ans. Profit, $262.50.

6. Shall I gain or lose if I buy 65 shares Northern Central ($50) at 531⁄2, and after receiving two 4% dividends sell them for 514, brokerage %, interest on money not consid Ans. $97.50 gain.

ered?

CASE II.

437. Given, the rate, the brokerage, or the net proceeds, or entire cost, and the market value, to find the par value.

1. A paid a broker $150 for selling some drafts, at the rate of 21%; what amount of drafts did he sell?

SOLUTION.-At a rate of 2%, .025 times the par value of the drafts equals the brokerage, which is $150; hence the par value equals $150 divided by .025, which we find is $6000.

Rule I.-Divide the brokerage by the rate, to find the par value.

Rule II.-Divide the net proceeds by the market value minus the rate, or the entire cost by the market value plus the rate, to find the par value.

WRITTEN EXERCISES.

2. I paid a broker $12.50 at % for buying N. Y. Central ($100); how many shares did he buy? Ans. 100 shares. 3. I paid my broker $4712.50 for an investment in Missouri 6's (100), at 94, including brokerage at 1%; what was the par value of the bonds? Ans. $5000.

4. I sent a New York broker a draft on Fisk & Hatch for $4953, to cover an investment made by my order in Harlem Railroad at 95 ($100), and his commission of 1%; how many shares shall I receive? Ans. 52 shares.

5. My broker sold $3000 Philadelphia 6's at 1014, and invested the proceeds in United Companies of New Jersey stock at 131 ($100); how many shares did he buy, broker. Ans. 22 shares; $128.75 surplus.

age at 1% ?

SUPPLEMENTARY PROBLEMS.

To be omitted unless otherwise directed.

6. Mr. Westlake bought Pennsylvania R. R. stock ($50) at 497, and sold it at 534; after paying brokerage, he found he had a profit of $237.50; how many shares did he buy? Ans. 76.

7. Wishing to meet a note for $5000, I directed my broker to ell sufficient West Phila. Pass. Railway stock ($50) to cover the note and brokerage; if the stock was selling at 783, how many shares must he sell, and what is the surplus ? Ans. 64 sh.; $24.

8. I sold 25 shares of Philadelphia National Bank ($100) at 156), and directed my broker to invest the procceds in Norristown R. R. stock ($50) at 99; what is the amount of investment, after deducting brokerage? Ans. 39 shares; $40.37 surplus.

CASE III.

438. Given, the par value, and the brokerage, or the net proceeds, or entire cost, and the market value, to find the rate.

1. A broker bought Reading convertible coupon. 7's, par value $4000; his charge was $10; what was the rate of brokerage?

OPERATION.

$10

$4000

=.00

SOLUTION.-The brokerage, $10, equals the par value, $4000, multiplied by the rate; hence, the rate equals $10 divided by $4000, which we find is .004, or %. Rule I.-Divide the brokerage by the par value, to find the rate.

Rule II.-Divide the difference between the real value of the stock, and the net proceeds or entire cost, by the par value, to find the rate.

WRITTEN EXERCISES.

2. A broker buys 110 shares of gas stock, par value $25 a share; his charge was $6.87; what was the rate of brokerage? Ans. 1%. 3. A broker, having purchased, according to order, $5600 Rhode Island 6's at 110, informs me that the entire cost is $6188; what brokerage does he charge? Ans. 1%. broker, to invest balance of $25; Ans. 1%.

4. I sent a draft for $21250 to a Detroit in Michigan 6's at 106; he remitted me a what rate of brokerage did he charge?

INCOME FROM INVESTMENTS.

439. Investments in stocks, etc., may be made either for interest on the money or for the increase of capital.

440. There are Several Classes of stocks, viz.: those of Corporations, States, and the General Government.

441. Bonds are distinguished as Registered and Coupon Bonds. The Registered bonds are payable to order, and cannot be transferred without being indorsed.

442. The Coupon bonds have coupons or certificates of interest attached to them, which may be cut off and the interest collected when due.

443. The principal bonds of the United States, called Government Bonds, are the following:

The 4's of 1907, which are 4% bonds due in 1907. These bonds are both coupon and registered, and the interest is payable quarterly.

The 44's of 1891, which are 44% bonds due in 1891, interest payable quarterly, both coupon and registered.

The currency 6's, issued to aid in constructing several railroads to the Pacific. There are several series of these bonds, maturing respectively in 1895, 1896, 1897, 1898, and 1899.

Government Bonds are so secure that they are much sought after for investment, and thus command a premium. This premium usually becomes smaller each year, as the bonds approach maturity.

When the interest on bonds is payable in gold, and gold is at a premium, the income in currency is equal to the income in gold, plus the premium. During the civil war, and for several years afterward, gold was at a premium.

444. A Mortgage is a conditional conveyance of property as security for the payment of a debt.

Should the interest not be promptly paid, the mortgage may be fore closed, and the property is then sold by the sheriff to the highest bidder, and the mortgage paid off from the proceeds. Property is usually not mortgaged beyond a certain part of its value, in order that the mortgagee may be secure from loss. A second mortgage is sometimes given, but this cannot be paid, in case of foreclosure, till the first is fully paid, and hence may not be a very good security.

445. A Ground-Rent is a fixed rent paid for ground, generally used for building purposes.

It is a common practice in some cities, when a person wishes to build one or more houses, instead of buying the ground required, to agree to pay the interest on its value as rent, the contract to continue in force as long as the rent is regularly paid. Ground-rents are redeemable or irre deemable. Some cities, as Philadelphia, prohibit the issue of any more irredeemable ground-rents.

Mortgages and ground-rents are not bought and sold at the Stock Exchange, but conveyancers are frequently employed in the transaction, as the title and condition of the property must be examined, and the necessary papers drawn up. Well-secured mortgages and grout.d-rents are in such high esteem as safe investments, that they are among the securities in which trust funds may be legally invested.

NOTE.-In changing from one investment to another, there is often a little more realized from the sale of the first than will procure an exact number of shares of the second. In such cases the income will be calculated on the number of shares, without noticing the surplus.