AMERICAN RAILROAD CERTIFICATES. These certificates partake of the nature of a registered holding and also of a bearer security. On the face is given the name of the registered holder of the shares and on the back is supplied a blank form of transfer. which, when signed by the registered holder, makes the certificate transferable by delivery like a bearer bond. The registered holder, however, is the person to whom the company sends the dividends, and the owner of the certificate (unless he gets registered himself) must apply to him for the dividend, produ cing the certificate to show that he is entitled to it. If, as is often the case, the registered holder is a well-known London firm, the application for the dividend may be easily made, but if the registered holder is not well known there may be consider able trouble in finding him. In some cases a commission is charged by the registered holder for receiving and paying over the dividend to the owner of the certificate.
These certificates differ from a bearer bond, in that a bearer bond is a " negotiable instrument," which a certificate of this description is not, and therefore they do not give to the owner any better title than the previous owner had. In practice, however, they pass from one person to another by mere delivery.
Trouble may arise to the unregistered owner owing to the death of the registered holder, or to the company requiring verifica tion of the transferor's signature on the form of transfer. It is also possible for a charge to be registered on the company's books against the shares. To avoid trouble.
a purchaser should have the shares registered in his own name.
When such certificates are purchased or taken as security, they should be indorsed by the registered holder, otherwise, in the event of his death, there would be consider able delay and expense in sending proof of death to America.
The following is the wording on a certifi cate of this nature : " This certifies that John Brown is the owner of ten paid shares of the Capital Stock of the Railway Company of one hundred dollars each, transferable only on the books of the company in person or by Attorney, and upon the surrender of this certificate.
" This certificate shall not become valid until countersigned by the transfer agent and also by the registrar of transfers." On the back there appears the following : " For value received have bar gained, sold, assigned. and transferred. and by these presents do bargain, sell, assign. and transfer unto shares of the Capital Stock of the Railway Company mentioned in the within certificate. and do hereby constitute and appoint true and lawful Attor ney, irrevocable, for and in name and stead, but to use to sell, assign, transfer, and set over all or any part of the said Stock, and for that purpose to make and execute all necessary acts of assignment and transfer, and one or more persons to substitute with like full power.
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