The...............Company, a Corporation of the State of New York (hereinafter called the Company) is indebted and for value received promises to pay to the registered holder, the sum of One Thousand Dollars in lawful money of the United States, on or before August 15, 1931, and interest semiannually on said sum, at the office of the Company in the City of New York, at the rate of six per cent per annum, on August 15 and February 15 in each year. Such interest shall be cumulative and payable in priority to any dividends on the stock of the Company for such half-yearly period.

This Debenture is one of a series of 47 debentures, all of even date, 27 being for the principal sum of $1,000 each; three for the principal sum of $500 each; 13 for the principal sum of $100 each, and 4 for the principal sum of $50 each, a total of $30,000.

This Debenture shall immediately become due and payable if a judgment or decree is rendered for the dissolution of the Company by any court having jurisdiction thereof, or if the Company is adjudicated a bankrupt or insolvent, or if an effective resolution is passed by the stockholders for the voluntary dissolution of the Company.

This Debenture may be redeemed by the Company at any time at its face value, and interest earned and unpaid hereon, upon thirty days' notice in writing sent by mail or delivered personally to the registered holder hereof.

A Register of the debentures shall be kept at the Company's principal office containing the names and addresses of the registered holders and particulars of the debentures by them respectively.

Every Transfer of this debenture must be in writing, signed by the registered holder, or his legal personal representative, and shall be delivered at the Company's principal office, and duly acknowledged, if required by the Company, and thereupon the transfer will be registered and a note of such registration entered hereon.

In Witness Whereof the Company has caused this instrument to be signed in its name and behalf by its President, and its corporate seal to be hereunto affixed and attested by its Secretary, this nth day of August, 1911.

........................Company

By

President Attest:

Secretary

It is quite possible that, in many instances where small corporations are now borrowing up to the limit of safety at a bank and yet are cramped for funds, a small issue of debenture bonds could be marketed among people who are acquainted with the corporation and recognize its solidity.

Some debenture bonds, although not secured by the pledge of specific properties, are protected by especial provisions which may give them an advantage over holders of wholly unsecured and unprotected obligations in case of reorganization. For instance, the American Cotton Oil Company has outstanding an issue of debenture bonds the principal of which may at once become due, in case there is a default in payment of interest, at the option of a majority of the holders of the bonds. The American Tobacco Company's gold debenture 6's and 4's are not secured by lien or mortgage on properties, but a charge is imposed in favor of the trustees acting for the debenture bondholders, upon the property and upon all the present and future net incomes of the corporation. This gives the owners of these debentures an advantage over the owners of any subsequent debentures or obligations that the company may incur.

There are one or two curious instances of so-called debenture bonds issued in this country and in Canada, which are not, in fact, debentures at all, but possess what is here considered a preferable mortgage security. For example, the Canadian Niagara Power Company has outstanding an issue of 6% debentures, series "A" and "B" of which are secured by a first mortgage, and series "C" by a second mortgage. The Wabash Railroad Company has a third mortgage issue outstanding which is called "Debenture Bond Series 'A." Some of the Chicago and Great Western debentures, also, are really mortgage bonds. As has been remarked before, it is unsafe to place any reliance upon names unless they are used in a strictly legal sense. The use of the term "debenture" in all these companies is doubtless in order to facilitate the sale of the bonds in the English market.