Par

The face value. On the New York Stock Exchange if the face value of a stock is $100 it is at par when it is selling at 100. It is above par when it is selling at a higher price, as 101; it is below par when it is selling at a lower price, as 99. Half-stock (stock of the face value of $50) also is at par when it is quoted at 100% which in this case means $50. The face value of a stock is divided into 100 parts for quotation purposes, no matter what the face value may be, and each part is called 1% or 1 point. Therefore, when a half-stock is quoted at 101 it is one point above par, which means that the stock is worth $50.50 a share; when it is quoted at 99 it is 1 point below par, which means that the stock is worth $49.50 a share. The same principle applies to quarter stock (stock of the face value of $25) and, in brief, to stock of any face value.

In some markets stocks are quoted in dollars instead of by percentage. Thus, in such markets if a stock of the face value of $100 is selling at 100 it is at par; if selling at 101 it is 1 point above par; if selling at 99 it is 1 below par. Likewise, if a stock of the face value of $50 is selling at 50 it is at par; if selling at 51 it is 1 above par; if selling at 49 it is 1 below par. So, also, if a stock of the face value of $25 is selling at 25 it is at par; if selling at 26 it is 1 above par; if selling at 24 it is 1 below par; and so on.

Par Of Exchange

The par of foreign exchange is the fixed intrinsic value of the currency unit (monetary unit) of one country expressed in the terms of the currency of another country which uses the same metal as a standard of value. Thus in United States gold money is 4.11 shillings, or 4 shillings 1.31 pence in English gold money, or 5 francs 18.26 centimes in French gold money, or 4 reichmarks (marks) 19.79 pfennig in German gold money, or 2 guilders (florins) 48.78 cents in Netherlands (Holland) gold money, and so on.

If the price paid for a bill of exchange just equals the amount for which it is drawn, then exchange is at par; if more is paid exchange is above par; if less is paid exchange is below par.

Between a gold standard country and a silver standard country there can exist no fixed par of exchange, for the reason that silver, unlike gold, has not a fixed value; in other words, silver being merely a commodity, its value depends on the state of the market for it.

Participating Bond

Comparable to an income bond, inasmuch as the return to the holder in interest depends on the extent of the revenues so applicable.

The first bonds to bear this name were issued in 1902, and were designated "4 per cent, and participating bonds." These bonds were in effect collateral as well as income bonds. The company which issued the bonds owned stock in another company, and this stock was deposited and pledged as security for the principal of the bonds. Interest at 4% was guaranteed by the company which issued the bonds and the bonds were also entitled to receive interest in excess of 4% as permitted by the dividends paid on the stock securing the bonds beyond the amount necessary first to provide for the 4% as guaranteed.

Passenger Density

A term used in railroad accounting, meaning the result obtained when the total number of miles of passengers carried is divided by the number of miles of road operated.

Passenger Miles

A railroad term; the number of miles, collectively, traveled by all passengers. The result attained by adding together the number of miles traveled by all passengers shows the average number of miles traveled by each passenger. Passenger mileage means the same as passenger miles.

Passing A Dividend

Failure to declare a dividend that had previously been regularly paid. When the directors vote not to pay a dividend that previously had been regularly declared the dividend is stopped; when the dividend simply is not declared it is passed.

Plain Bond

A bond not secured by mortgage or collateral and without a sinking fund provision. A debenture bond being (as a rule) merely a promissory note in the form of a bond is a plain bond.

Pool

This term applies when interests join together for mutual advantage.

The anthracite coal pool, as it formerly existed, was an agreement whereby each company belonging to the pool was to mine a certain percentage of the total production. The production for each month was determined in the preceding month. The purpose of the pool was regulation of both output and prices. By restricting the output to the consumptive demand, control of prices was accomplished. A schedule of prices was prepared for each month and all the companies made sale of coal in accordance with it. The anthracite coal pool was declared illegal by the courts on the ground that it was in restraint of trade.