Bear

A bear in Wall Street is a speculator who works to secure or who believes in lower prices; in the stock market it is one who sells stock short, or advises the selling of stock short for the purpose of buying back at a lower price. A speculative dealer in grain, cotton or other commodities may be a bear as well as a speculator in stocks. For methods of operation pursued by bears see "Selling Short."

Bill Of Exchange

A written order or request from one person to another for the payment of money to a third, the amount to be charged to the issuer of the bill. There is practically no difference between a bill of exchange and a draft. The term, however, is commonly applied to an order for money payable in a foreign country, whereas the term draft is applied to an order payable within the country of its origin. .

Bills of exchange constitute a most important circulating medium. The wholesale transactions of the world between countries are affected by bills of exchange, which are not limited like bank notes to the country of their origin. When commercial bills of exchange are accompanied by bills of lading or warehouse receipts, or by other documents, they are of a superior nature. They command a lower rate of discount, or in other words, bring a better price than bills not secured. In a stringent money market they are saleable when other bills are refused. See also Foreign Exchange.

Blind Pool

When several persons contribute capital to a pool for operating in stocks or bonds, either on the long or short side, and only the manager of the pool knows in what way the money is to be used, it is known as a blind pool. The purpose of such a pool is to insure secrecy. Speculative blind pools are not uncommon undertakings in Wall Street.

A bond is a certificate of obligation usually issued by a corporation to pay money secured by mortgage or otherwise. It is usually an interest bearing certificate, and issued in denominations of $1,000. There are many kinds of bonds, some being issued by corporations, others by municipalities or governments, and still others by individuals.

The securities issued by governments are generally designated as bonds, rather than stocks. The United States government issues are nowadays known as bonds, although they were many years ago known as stocks. Some of the securities issued by New York City are still designated as stocks, but American municipalities usually now designate their securities as bonds rather than stocks.

A coupon bond is one both interest and principal of which are payable to bearer. Such a bond carries with it a series of coupons, usually attached to the bond itself, which are clipped off on the respective interest periods and deposited with the banks for collection by the holder of the bond in the same manner as checks are deposited. A registered coupon bond is one which bears the name of the owner, and only the principal can be paid to him. The interest, however, is still payable to bearer. A straight registered bond is one bearing the name of the owner whose name is registered on the books of the company issuing the bond, and the interest payments are made by checks forwarded to the address of the owner.

A gold bond is one which is specifically payable, both principal and interest, in gold coin; a currency bond is one which is payable with any kind of money that is legal tender. A large bond is one with a denomination of $10,000. A small bond is one of a denomination of $500 or less.

Investment bonds are issued in various denominations and at all rates of interest from 3% up to 7%„ There are at least two dozen different kinds of investment bonds, such as the various railroad bond issues, public utility issues, industrial issues, bonds on mines and other enterprises, in addition to government or municipal securities. The various kinds of bond issues are described throughout the pages of this book under their own titles or headings.

Books Close

This relates to the transfer books for stocks and registered bonds. Usually on an advertised date sometime prior to the payment of a dividend on a stock the transfer books close and the stockholders of record on that day receive the dividend when it is paid. On and after the day the stock books close the stock sells "ex dividend" or without the dividend. The transfer books are also usually closed on an advertised day prior to an election or other stockholders' meeting, and only the stockholders of record at the closing of the books can vote at that election or meeting. A contract in a stock falling due during the regular closing of the transfer books of the company is settled at maturity by the delivery of a certificate and power of attorney; on a contract which is at the option of the buyer or of the seller, notice for settlement may be given as if the books were open. In case the books are closed for a dividend, the person entitled to the latter receives a due bill for it.