ons. General meetings of
shareholders are held once a year to elect the directors and to hear
the reports of the officers.

The student should be familiar in a general way with the different
classes of stock and with the technical terms familiar to stock
companies. The more important of these matters are as follows:

DIRECTORS. All the shareholders meet together and out of their number
choose a certain number of directors. The directors choose a president
and other necessary officers and fix the amount of salary which shall
be paid such officers for their work.

CAPITAL STOCK. This name is given to the gross capital for which the
company is organised, without any reference to its value or to whether
it has been fully paid in or not. The _paid-in capital_ is the amount
received from the stockholders on the shares for which they have
subscribed.

DIVIDENDS. The directors of the company, after paying the expenses and
laying by a certain amount for contingencies, divide the profits among
the shareholders. These profits are called dividends, and in
successful concerns such dividends as are declared quarterly,
semiannually, or annually usually amount to good interest on the
shareholders' investments.

TREASURY STOCK. It often occurs that a new company finds it necessary
to set aside a certain number of shares to be sold from time to time
to secure working capital. Such stock is held in the treasury until it
is needed, and is called treasury stock.

PREFERRED STOCK. Preferred stock is stock which is guaranteed certain
advantages over ordinary stock. It is usually given to secure some
obligation of the company, and upon it dividends are declared in
preference to common stock. That is to say, if a man holds a share of
preferred stock he will receive interest thereon out of the profits
of the business before such profits are given in the form of dividends
to shareholders generally. Preferred stock can be issued only when
authorised by the charter of the company. The interest on the
investment in the case of preferred stock is more sure, but the
security itself is not any more secure than in the case of common
stock.

GUARANTEED STOCK. Guaranteed stock differs from preferred stock in
this--that it is entitled to the guaranteed dividend (interest) before
all other classes of stock, whether the company earns the necessary
amount in any one year or not. This right is carried over from year to
year, thus rendering the shares