For those who like ownership with the greater risk and more luxurious prizes that are its lot, companies provide ordinary, or common, shares and stocks.
For those who love compromise and a via media—less risk than is run by the ordinary shareholder and a higher yield than is given to the debtholder—companies provide preference or preferred shares and stocks.
These are the three main divisions, and, though there are many intermediate varieties with fancy names, they nearly all fall in fact into one of these classes. The debtholder takes the first bite out of the revenue of the company (after wages, salaries, taxes and other expenses have been met): the preference holder comes next and the ordinary shareholder takes such share of the balance as is not kept in hand by the directors or placed to reserve fund.
The position of the company debtholder is, usually, much the same as that of the holder of public debts—he is entitled to a fixed rate of interest, either for all time or up to the date at which his bond or stock is due for repayment. This date is either definitely fixed, or may be determined by the hazard of a draw, when the securities are numbered and part of them is drawn yearly or half-yearly for repayment. Payment is usually at par or the face value of
