53. Stock Certificate Book

The stock certificate book is not always kept with the care that should be given it. It must be remembered, first of all, that a blank certificate of stock in the hands of a crafty knave is almost as good as so much gold. After the stock has once been issued, no certificate should be issued or signed unless the old certificate for which it is issued accompanies the new certificate. It is not customary for banks to have their transfers of stock registered by another company, as other large corporations do, and thus it is necessary to exercise an unusual amount of care with every transaction. Every certificate and its corresponding stub should be numbered by the printer when the book is made. The stub should show the number of shares, the date of issue, to whom the certificate is issued and a place should be reserved for the receipt of the party to whom it was issued, or of his agent. It is a good plan to exercise an unusual amount of care in filling out the stub so that the sum of outstanding certificates will equal the capital of the company. Cancelled certificates should be securely and neatly pasted to the stub without delay and without fail.

The form for the assignment of the shares of stock is printed on the back of the certificate and reads as follows:

For value received,..........hereby sell, assign and transfer unto...............................................,

..........shares of the capital stock represented by the within certificate, and do hereby irrevocably constitute and appoint

...................................attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

Dated..............19..........

In presence of

The following notice usually appears on one side, along the edge of the certificate:

Notice: The signature of this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement or any change whatever.

54. Transfer Of Stock

There is comparatively little danger attending the transfer of stock standing in the name of an individual. The signature is usually known. Stocks standing in the name of one person and endorsed by a representative or by an executor, administrator or others, are a frequent source of trouble. The bank must know that the agency purporting to exist does actually exist, and that the agent in endorsing for his principal is acting within the scope of his authority. In the case of representatives of an estate, the danger is much greater. In the first place, the fact that an endorser is an executor places the transfer agent on notice that the owner of the stock left a will at his death, the dictates of which must be obeyed unless set aside by the courts. He must therefore demand such information as will satisfy him that the transfer is regular. The transferee or the person presenting the certificate for him should be compelled to exhibit a certified copy of the will.

A very simple and yet convenient form of transfer book is shown in Figure 37 on page 85. The postings to the stock ledger should be made from this book.

Figure 37. Stock Transfer Book.