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CHAPTER XI

Creditorship or Ownership—Company Debts—Right of Foreclosure—The First Floating Charge—Trustees for Debenture Holders—Railroad Mortgages—Investigation of Labels on Securities—The Preference Compromise—Its Weaknesses and Comforts—Participating Preferences—"Guaranteed"—Ordinary, Deferred and Founders' Shares.

CHAPTER XII

Falling Prices and Ordinary Shareholders' Profits—Mr. E. L. Smith's Investigation—Common Stocks v. High Grade Bonds—The Victory of Common Stocks—The Reason. Why—Some Exceptional Factors in their Favour—Caution in Drawing Conclusions—A Test of the Reserve Fund Policy.

CHAPTER XIII

Ownership with Reduced Industrial Risk—Banks, Discount Companies and Insurance Companies—Their Widespread Service—The Inevitable Demand for it—The Liability on the Shares.

CHAPTER XIV

The Westminster Balance-sheet—Comparison with an Industrial—Smaller Proportion of "Doubtful" Assets—The Big Reserve Fund—The Profit and Loss Account—Its Reticences—Fallacious Inferences. Therefrom—The Nationalization Risk