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when the President is present, the Vice-President's duties are principally those of an assistant to the President, although, in large corporations Vice-Presidents usually have charge of some particular department.

Secretary. The Secretary's duties are confined principally to the keeping of the records of the Company, consisting of the meetings of the Board of Directors and the meetings of the stockholders, the issuance of calls to such meetings, and the submission of the Annual Reports placed in his hands to the Board of Directors and the stockholders; to the conduct of the correspondence; and he is generally called upon to attest all documents signed by the President, to sign the bonds and coupons attached thereto, certificates of stock, and to see to the transfer of stock certificates, and to attach the seal of the Corporation to all contracts requiring such seal.

Under the By-Laws of many institutions the Secretary is made Assistant-Treasurer, so that in the absence of the Treasurer he may perform the duties pertaining to that office.

The office of Secretary and Treasurer are also frequently combined, in which case, in addition to the duties above enumerated, he discharges those duties which the Treasurer is usually called upon to perform.

Treasurer. The Treasurer is more particularly the financial man of a company, and under his direction are kept the books, showing the assets and liabilities of the Company, and its general business transactions. It is his duty, with the direction of the Board of Directors, to designate a bank in which the funds of the Corporation shall be deposited, and therein to deposit them.

He is also required (by most companies) to countersign all contracts, checks, notes, and other evidences of debt or promises to pay, which have to be signed by the President.

General Manager.-The General Manager, while not

necessarily a member of the Board of Directors, and supposed to be subordinate to the President, is perhaps the one officer with whom the public deals most directly, and whose power it is most important that they should understand.

His power, as stated, is derived principally from the President as under the constitution of most companies the General Manager is appointed by the President, but when appointed by the Board of Directors is answerable to them. In such case his duties and powers are prescribed in the By-Laws.

It is ordinarily safe to assume that the General Manager has power to enter into contracts for supplies and such material as is legitimately needed in the operation of the particular business under his control, and to make agreements for the employment of clerks and laborers and others necessary to the operation of the company.

In the case of a contract involving a large sum of money, or one which it is not commonly known that the General Manager has power to bind the company upon, it is wise to have the same ratified and confirmed by the President. There are, however, certain contracts and deeds which even the President has not the power to enter into, these, as a general rule, are contracts disposing of some portion of the assets or franchises of the company, the power to dispose of which rests with the stockholders only.

The issuance of new stocks or bonds can only be legally done by the direction of the stockholders.

In many companies, while the President and Treasurer finally sign a contract, still their power is limited, and they are only empowered so to do after the passage of a resolution to that effect by the Board of Directors.

Of course, it is obviously impossible to give more than the briefest outline of the duties of the various officers of

a corporation, and when a person is in doubt as to the ability of a particular officer or of particular officers to bind a company, it is always best to consult some reputable attorney in respect thereto, because there is no greater source of litigation than the repudiation of contracts by corporations, the defence almost invariably set up being that the officer exceeded his power.

CHAPTER XII.

Stocks, Bonds, Warrants, and Receivers' Certificates.

No work on Finance would be complete without some treatment of this subject, and while it is a rather recent development of finance, it constitutes to-day one of its most important divisions. The size of this book, however, permits only of a very brief discussion of the subject.

As certificates of stock or shares are written evidence of the rights of their holders, transferable on sale or registration, and bonds are subsequently issued by authorization and direction of these holders, we will follow in our treatment of the subject, this order.

Before proceeding to a particular consideration of stocks and bonds, it seems necessary to say a word as to the necessity of their issuance.

One of the objects of incorporation is to afford the public an opportunity to subscribe the requisite capital for the organization and operation of an enterprise, and after the purchase of its plant and franchises partly if not wholly by the money paid in by the shareholders, it issues its bonds, secured by a mortgage on its assets, or some part thereof, with which to secure whatever money may be needed for its further completion and operation.

Stocks.

Shares, in the United States generally called "Stock," are certificates issued by a corporation, certifying that the person in whose name they are written and stand

registered on the books of the company, is entitled to a portion of the corporation's profits, to the right, by vote, to participate in its management, and, according to the character of the shares, liable to assessment for its debts. It must be borne in mind, however, that all stock is not registered, nor is all assessable. The shareholder is, for the time being, a limited partner in the enterprise by which his shares are issued, but this interest is more readily transferable, and his rights having been previously determined, are more easily disposed of, than in the case of an ordinary special partnership interest.

While all shares entitle their holders to a certain proportion of the net earnings of the corporation, it must be remembered that these earnings can only be computed and distributed among the shareholders after the payment of all obligations of the company, such as operating expenses, fixed charges, etc., inasmuch as the shareholder is regarded in law as a partner in the enterprise, and therefore the last person entitled to share in the distribution of its assets. Bondholders, on the contrary, are creditors of the corporation, having loaned or advanced it money, receiving as evidence of such loan, a bond secured by a mortgage on the property and earning capacity of the company. Because of this liability of the shareholders (in the case of assessable shares) and their position as special partners, they are given the control of the company, whereas the bondholders being in the position of lenders or creditors of such corporations are not generally accorded any voice in the management of a solvent company, although there are being issued by some few corporations, bonds giving their owners certain rights of participation in the corporate management in the event of certain contingencies arising. This, however, is in direct contravention of the principles upon which shares and bonds are issued and held, and is not, therefore, very popular or resorted to often.

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