Sometimes a company is issuing priority shares, or offering the shareholders certain privileges, which may ultimately be of value to them. Such a privilege may be the issue to them of those shares pro rata before offering them to the public. Or the company may be increasing its capital by a further issue of shares, giving the shareholders the chance of taking them up at a price much below the market price ruling at the time, so that they may immediately sell them at a profit if they choose. Thus they carry for a time this valuable right or privilege to which a buyer is entitled if he buys before they are quoted ex. new. But from the moment they are thus quoted he is not entitled to them, and the seller of the shares retains them.

When it is announced by a company that its transfer books will be closed at such and such a date, it means that this is done in order to prepare for the declaration of a dividend. For instance, a company announces that its transfer books will be closed from July 15 until a later date in the month, so that after that day and during that period it will not transfer any shares in its books. Therefore, if you sell the shares until the books are re-opened you will still be looked upon as the holder of those shares, and the dividend warrants will be sent to you.

When an accrued dividend is spoken of, it means that the price of the shares virtually carries with it a part of the dividend that will subsequently be paid, and this brings about an improvement in its price. If a 25 per cent. dividend has been declared, and at the end of twelve months another 25 per cent. is likely to be paid, then at the end of six months the price of the shares will have improved 12 1/2 per cent., or 1/8, whilst it would go up another 1/16 at the end of a further three months. But mining shares are but slightly affected by any such influences, and therefore we hear of it but rarely in connection with them. Still, it is as well to explain the meaning of the phrase, as it may give rise to unnecessary perplexity.

The word 'amortization' is also frequently a stumbling-block to many, and it may be explained before I bring this chapter to a close. It applies only to redeemable stocks, and, as such stocks are frequently issued by mining companies in the shape of debentures, speculators and investors should understand the significance of the word. When debentures are issued they are generally made redeemable at a certain date, and during the period they are running they are gradually being paid off out of a sinking fund. This amortization usually takes place annually, when drawings are made, and interest at once ceases on such debentures as have been drawn, this interest going to swell the fund for eventually redeeming the entire debt. In some cases this sinking fund is allowed to accumulate at interest until it shall equal the amount of the whole debt at the date the redemption is due, but more frequently the fund is, used to purchase the stock in the open market. Others are redeemed by periodical drawings, for which so much money is specially allocated every year, and as this is done practically by lot, and no one knows which bonds may be redeemed, we may suddenly find ourselves paid off and the interest cease. In the case of mining companies debentures are frequently issued with the right to convert them into shares, and in the generality of cases this right is exercised.