and the dividend on them is cumulative, but the guarantee is merely that of the companies. "Guaranteed" is thus a label that needs careful scrutiny when attached to a security.
Such are the securities—giving the rights and limitations of creditorship and limited ownership—which rank ahead of the real out-and-out owner, the ordinary shareholder, who takes what is left when these limited claims have been met. He takes it either in the form of dividend paid into his pocket, or in the form of reserve funds built up by the directors to increase his property and his future dividends; or he takes it with the best grace that he can muster if it be a minus quantity or a profit too small to make a dividend. He is the "functionless" person who takes the first risk and the last profit, but the last profit, how great so ever it be, is his.
Simple as his position is, as compared with the precedences and differences by which the prior charges are distinguished, it is sometimes subject to complications. One we have seen in examining the participating preference. Where it exists the ordinary divides with it—in proportions that vary according to the terms on which the participating preference is issued—any surplus left after a fixed rate has been paid to itself.
