In the United States we speak of "common stock"; in England they use the term, "ordinary shares." The two expressions are practically identical in meaning; both refer to shares which have no special privileges or rights but which are entitled to whatever capital or income remains after prior claims have been satisfied. One verbal exception to this general statement may be noted. In English usage there are sometimes "deferred" or "deferred ordinary" shares, which are inferior in claims to the so-called ordinary shares. In this case the shares that are called ordinary are really "preferred." Once in a while the same practice is found in the United States. For instance, the Denver Reservoir Irrigation Company has three classes of common stock, which are known respectively as "A," "B," and "C" common- Voting power is vested only in classes "A" and "B," which accordingly are given preference in this respect over the "C" class Customarily, however, common, or ordinary, shares are all of the same class and represent the final equity in the enterprise after prior claims have been made.

The simplest case of capitalization arises when a corporation has outstanding only one class of stock, and no notes or bonds. The laws of several states specifically provide that in the absence of any special preference for certain classes of stock, all stock shall be of one class and shall be known as common stock. Any stock that is set aside and given special privileges has still all the rights of common stock, except so far as these are taken away or limited by statute or charter provision. We shall see that there is no rule, or even established custom, as to the rights and privileges of so-called preferred stock. The common stock is entitled to-every privilege that is not specifically taken away from it.