interest are then credited to accrued interest as received; and the balance against this account at any time shows the amount of past-due interest. This plan insures that interest shall be placed to the credit of earnings during the period in which it is earned, and it also serves as a safeguard against overlooking any past-due items of interest. The totals of the different columns in this journal are handed to the general bookkeeper on debit and credit slips at the close of each day's business.

Substitution of collateral,

P... July 7 2006

Pittsburg, Pa.

The undersigned acknowledges that he has this day received from The Blank Trust Company the following securities held as collateral to loans.

#4000. These and his 6% bonds, series. A. *5000* Chicags &E Ill. /at gen 4% Bonds

And that he has deposited in lieu therof, subject to the same condi

tions as the collateral originally pledged,

"good. Chic Mil St. Paul g 5% bonds.

John Johnson

FIG. 166.-FORM FOR SUBSTITUTION OF Collateral.

Charles M. Ward

60

3000 Nos. 1346, 1347, 1348 +463-1627 80

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FIG. 167.-FACE OF CARD LEDGER FOR TIME LOANS.

Cards are quite generally used for loan ledgers. Figure 164 shows. the face, and Figure 165 the back, of such a card ledger for demand loans. As a study of the figures will show, the loan account and the interest record are kept on the face of the card, the back being devoted

6|3|06| 27 Norfolk &W. Ry lat 5's. Chas. M. Word

RECEIVED FROM THE CLEVELAND TRUST COMPANY, ALL SECURITIES AND OTHER PAPERS DUE IN CONNECTION WITH THE WITHIN DESCRIBED LOAN.

CLEVELAND, O

SIGN BELOW

FIG. 168.-BACK OF CARD LEDGER FOR TIME LOANS.

to a description of the collateral, and to the receipt which is taken when collateral is delivered. The receipt on the card is more convenient than a separate receipt, as it insures that everything in the way of record of closed-out loans shall be filed together. With some loans, however, and particularly with those of brokers, the changes of collateral are so many that there is not room on the loan card for the various receipts. For such cases it is convenient to have a separate form for the substitution of collateral, such as is shown in Figure 166. The separate receipt is useful also in the numerous cases where the owner of the collateral does not come for it in person, but sends a messenger.

Figure 167 shows the face, and Figure 168 the back, of a card ledger for time loans. In this form the loan account and the description of collateral are given on the face of the card, the interest record and the receipt being on the back. These ledger forms may easily be adapted to permanently-bound or loose-leaf books if desired.

It is important to know at all times the amount of loans carried on each kind of collateral, to avoid loaning too heavily on any securities,

and for reference in case loans must be called because of decline of collateral. For this purpose a collateral line ledger is used, of which a loose-leaf form is shown in Figure 169, and a card form in Figure 170. The figures are self-explanatory. Figure 171 shows a card used for a collateral line ledger on a different plan. An index card is provided for each kind of collateral, and behind each index card are filed the cards like that shown in Figure 171, a separate card being used for each loan. When a loan is paid, or other collateral substituted, the old card is removed from the file and destroyed. To get the total of any given collateral held, or the amount of loans on same, it is necessary to add the amounts on the several cards that may be filed after the index card. John Smith

NAME

Figure 172 shows a form of collateral note used in New York city. A shorter form, used in a large city in the Central States, reads as follows:

On demand after date. .promise to pay to the order of
THE BLANK TRUST COMPANY at its office.
.DOLLARS,

for value received, with Interest at the rate of......per cent. per an-
num, payable quarterly on the 15th days of March, June, September
and December of each year, unpaid installments of interest to draw
Interest at the same rate as the principal, having deposited with said
Company as collateral security for payment of this or any other liabill-
ty or liabilities of......to said Company, due or to become due, or that
may be hereafter contracted, the following property, viz.:

The market value of which is now $.
; with the right to call for
additional security should the same decline; and on failure to respond,
this obligation shall be deemed to be due and payable on demand, with
full power and authority to sell and assign and deliver the whole of
said property, or any part thereof, or any substitutes therefor, or any
additions thereto. at public or private sale, at the option of said Com-
pany, or its assigns, and with the right to be purchasers themselves
at public sale, on the non-performance of this promise or the non-
payment of any of the liabilities above mentioned, or at any time or
times thereafter, without advertisement or notice, and after deducting
all legal and other costs and expenses for collection, sale and delivery,
to apply the residue of the proceeds of such sale or sales so to be
made, to pay any, either or all of said liabilities, as said Company, or
its president or treasurer shall deem proper, returning the overplus to
the undersigned.

No.........

Address..

This form, providing as it does for quarterly payments of interest on a demand note, illustrates the custom in some localities of carrying demand loans for several months or even years, so long as the collateral does not decline in value to a point which makes the margin too small. It is evident that this is quite different from the "call" loan as usually carried in New York city.

$300000

Ninety days

pay the COLUMBIA TRUST COMPANY, or order, at the office of said Company, 26 Nassau Street, City of New

York,

Three thousand

with interest at the rate of....

1 fior

per centum (.

Dollars ($3000

-%) per annum, having deposited with said Trust Company

as collateral security for the payment of this, and for all other present and future demands of the holder hereof against the undersigned, due or due

$2000 Chesapeake & Ohio Ry. lat. Witgne 6% gold bondo 30 sh. N.J., Chicago.

and hereby empower the holder hereof, on non-performance of any obligations herein contained to sell, without notice and without demand of payment, the whole or any part of said securities and substitutes therefor and additions thereto, at any brokers' board or at public or private sale, within or without the City of New York, at the option of the holder hereof, and after deducting all legal charges, expenses of said sale and collection of this note, to apply the proceeds to the payment of the principal and interest of this note, and other demands against the undersigned aforesaid, accounting to the undersigned for the surplus, if any. In case of deficiency after sale and application of proceeds, the undersigned agree to pay the amount thereof, with legal interest

In case of depreciation in the market value of the property held as collateral to this loan, or in case any of the collateral securing this loan shall be unsatisfactory in amount or otherwise to the holder, the undersigned will forthwith make such payment of principal and interest, or deposit such additional securities as collateral hereto, as may be required and approved by the holder hereof. In case such payment shall not be made, or securities deposited as aforesaid, this note shall, at the option of the holder, become immediately due and payable, and the collateral deposited, as aforesaid, may be forthwith sold and the proceeds thereof applied as herein before provided, the undersigned contracting and agreeing forthwith to pay the holder any deficiency, with legal interest thereon. On sale of any of said collateral the holder may purchase and hold the same, free from any claim of the undersigned, applying the amount of the purchase price in the liquidating or reducing the indebtedness. The collateral herein mentioned, and any securities which shall be either added to or substituted therefor and the proceeds thereof, shall also be held and treated as collateral security for any and all other debts or claims (absolute or contingent, due or to grow due), held against the undersigned by said Trust Company at any time, and shall be subject to sale upon non-performance of any obligation thereby imposed and to all the conditions and agreements herein contained.

Any delay on the part of the holder hereof in exercising any rights hereunder shall not operate as a waiver of said rights. If the undersigned shall become insolvent, make a general assignment for the benefit of creditors or file a voluntary petition in bankruptcy, or if a petition in bankruptcy be filed against the undersigned, then this note shall be forthwith due and payable, and in any such event all property of the undersigned in the possession or under the control of the Trust Company shall be collateral security hereunder.

William R Swift.

FIG. 172.-COLLATERAL NOTE.

A power of attorney for the transfer of stock is printed on the back of each stock certificate; a customary form of such a power being as follows:

For value received........hereby sell, assign and transfer unto.....
...shares of the capital stock represented by the within certificate,

and do hereby irrevocably constitute and appoint...

......at

torney to transfer the said stock on the books of the within-named
company, with full power of substitution in the premises.

Dated........190....

In presence of

For various reasons, however, borrowers often prefer to sign a separate power of attorney, and a form for same is shown in Figure 173.