In order that corporations, especially the larger ones, may pay a dividend, it is necessary to fix an interval of one or more day's duration, during which it is possible to make a correct list of the stockholders as shown by the transfer books, so that the dividends may be sent to the stockholders as of record the date provided for in the vote passed declaring the dividend. It is desirable that no stock shall be transferred during this process, and it is, therefore, customary for large corporations to "close their books;,, that is, their transfer books, during such an interval. This period generally precedes shortly the actual payment of dividend. Many corporations are accustomed to give ample notice to stockholders either by mail or by advertising, stating the dates of closing and opening of the books. Books may be closed for other than the above reason.

The New York Stock Exchange rules provide that on the day of the closing of the transfer books of a corporation for a dividend upon these shares, all transactions therein for cash shall be "dividend on" up to the time officially designated by the closing for transfers. All transactions on that day may be made therein for "cash" - deliverable the same day rather than on the following day as is the usual custom - in order that the dividend due may be obtained by the buyer. All transactions on that day, other than for " cash" shall be " ex-dividend." Should the closing for transfers occur upon a holiday or half holiday observed by the exchange, transactions on the preceding business day other than for " cash " shall be "ex-dividend." The buyer of any shares during the period for which the transfer books may be closed shall be entitled to receive all interest, dividends, rights, and privileges, except voting power, which may pertain to the same during the period.

After the closing of the books the delivery on purchases of "odd lots " of stocks cannot be made until the books open.

In a case where personal liability is attached to a certificate, the seller shall have the right to make delivery by transfer. The right to require receipt or delivery by transfer shall not obtain while the transfer books are closed. (See "Transfer in Blank.")