absolutely secured as to interest.

WATERED STOCK. When stock is issued to the shareholders without
increase of actual capital the stock is said to have been _watered_. A
company may organise for, say, $10,000, and may want to increase to
$50,000 without adding to the number of its shareholders. Each holder
of _one_ share will, in this instance, receive _four_ new shares, and
in future instead of receiving a dividend on one share will receive a
dividend on five shares. The object of this is, quite commonly, to
avoid State laws requiring certain corporations to pay excess of
profit over a stated rate per cent. into the State treasury.

FORFEITED STOCK. Stock is usually sold on certain explicit conditions,
such as the paying of ten per cent. down and the balance in
installments at stated intervals. If the conditions which are agreed
to by the shareholder are not met his stock is declared _forfeited_,
or he can be sued in the same manner as upon any other contract.

ASSESSMENTS. Some companies organise with the understanding that a
certain percentage of the nominal value of the shares is to be paid at
the time of subscribing, and that future payments are to be made at
such times and in such amounts as the company may require. Under
these conditions the stockholders are assessed whenever money is
needed. Such assessments are uniform on all stockholders.

SURPLUS FUND. It is not customary to pay a larger dividend than good
interest. The profits remaining after the expenses and dividends are
paid are credited to what is called a surplus fund. This fund is the
property of the shareholders and is usually invested in good
securities.

FRANCHISE. A franchise is a right granted by the State to individuals
or to corporations. The franchise of a railroad company is the right
to operate its road. Such franchise has a value entirely distinct from
the value of the plant or of the ordinary property of the corporation.

SINKING FUND. A sinking fund is a fund set aside yearly for the
purpose at some future time of sinking--that is, paying a debt.

XIII. PROTESTED PAPER

When a note is presented for payment at maturity and is not paid it is
usually PROTESTED; that is, a notary public makes a formal statement
that the note was presented for payment and payment was refused.
Notice of such protest is sent to the maker of the note and to each
indorser.

The bank should never hand to its notary any paper for protest until
it has m