Interest coupons are small certificates attached to that part of the bond representing the principal sum, each coupon representing the interest upon the bond for a certain period, there being attached to each bond a sufficient number of these coupons to represent the interest for the entire length of time which the bond may be outstanding before maturity. These coupons, or certificates, are cut off as they severally become due, and presented at the place designated for payment.
Do not detach coupons from a bond other than the next one maturing. Many investors have the habit of visiting at infrequent intervals their safe deposit vaults or " places of concealment," in which they keep their securities, and cutting from their bonds, at such periodical visits, the two or more next maturing coupons, which they will keep at home in some place subject to possible loss or destruction. That in itself is sufficient reason for not doing this. There is a true happening of a woman who had quite a collection of such coupons on a shelf in some room in her house. The windows being left open one day, a sudden draft swept the bits of paper out of doors, and, although every effort was made to find them, there were a few never recovered.
Another objection to this plan is that if, for any reason, a bond, with the coupons so detached, is sold, it necessitates delivering it with the cut unmatured coupons pinned thereon, which is more or less objectionable for many reasons.
When it is intended to send bonds to London for sale, from which coupons not due have been detached, they should be re-attached by means of gummed paper, and not pinned to the bonds.