Do not confuse this with a "refunding first mortgage bond." Note that there is quite a difference whether the word first qualifies " refunding " or

"mortgage." A " refunding first mortgage bond " takes the place of a " first mortgage " issue, which has been outstanding and which the company desires to extend, not pay off. The new (or refunding) issue is a first mortgage pure and simple, as was the original one. But not necessarily so an issue in which the word first precedes " refunding." In this case, there may be no first mortgage securing it, but may simply be the first "refunding " issue which the company has put out, and, in that sense, the adjective applies to " refunding " only. But usually the issue is a first mortgage on a small part of the property, although not upon the whole. An actual example would be the case of the Old Colony Street Railway Co. which had outstanding April 1, 1905, $1,777,000 " first refunding mortgage bonds," so-called, but secured by a first mortgage on a power station and only 41 1/4 miles of track out of a total mileage of 367; against the balance other mortgage bonds amounting to $4,667,000 held prior claims.

It is, of course, contemplated that this " first refunding mortgage" issue shall, at some future time, become a first mortgage on all the property, by the retiring of the $4,667,000 bonds as they become due, and replacing them with an equal amount of the "first refunding mortgage " issue.