Issued by a corporation, not secured by a mortgage upon its own property, unless upon certain real estate and subject to previous liens thereon, but secured by depositing in trust securities of other companies. Such a bond may, however, be indirectly a first mortgage through mortgages which have been deposited as above indicated; for instance, under the heading " Joint Bonds " is described a bond issued against stock of the Chicago, Burlington & Quincy Railroad Co. In this case, these " joint bonds " are really " collateral trust bonds," and are in no sense a mortgage. Suppose, however, some of the first mortgage bonds of the Chicago, Burlington & Quincy Railroad Co. had been deposited; this " collateral trust," or " joint bond," would, in that case, have been indirectly a first mortgage upon the Chicago, Burlington & Quincy Railroad.1

The value, as an investment, of such a bond as described lthe Armstrong Committee, in its recommendations after investigating the New York life insurance companies, expressed disapproval of collateral trust bonds secured by stock collateral. " Collateral trust bonds " at their best have many objectionable points, and cannot be classed as conservative.

Above, depends upon two things: first, the value of the securities pledged for its payment, and their desirability if, through default, they become the property of the bondholders; second, the strength and ability to pay of the corporation actually issuing the bond and what obligation, if any, such corporation is under to pay in case of insecurity of the collateral pledged. (See " Convertible Collateral Trust Bonds")