1. Refer to page 762. What was the capital stock, the capitalization, and the capital of the Bethlehem Steel Corporation in 1911?

2. Is the certificate given on page 150, as it now stands, negotiable? (Study pp. 111-116. Notice that the law was not enacted in New York until September 1, 1913. Certificates of stock dated before the enactment of the law are not negotiable. The same law was passed in New Jersey in 1916. It has also been enacted in Louisiana, Maryland, Massachusetts, Michigan, Ohio, Pennsylvania, Rhode Island, Tennessee, Wisconsin and Alaska.)

3. A owns certificate No. 5 for 100 shares of the X Company, dated September 1, 1905. He endorses it in blank and loses it. B finds it and sells it to C, who knew of the loss. C gives it to D. D sells it to E, who knew nothing of its past history. E sells it to F. who knew of the past history of the certificate. Does F get the title?

4. Suppose that the same certificate had been transferred by D to his own name before the stock was sold to E. Would D get the title? Would E get the title? Would E get any right?

5. What remedies in the above two cases, if any, would A have?

6. Suppose that the certificate mentioned in problem 4 had been dated September 1, 1917. Would your answer be different?

7. Suppose that Faith Jones wanted to send the certificate on page 150 to her broker ready for delivery. How could she do this without danger of loss and without incurring a double stock-transfer tax? (Study pp. 117-121 and see foot of p. 160 and top of p. 161.)

8. Mary Smith, unmarried, is a customer of your brokerage and bond house. She marries John Anderson and writes for advice on the following-questions: (1) How should I have certificates made out in the future? (2) How can I get the old certificates I hold in various companies transferred to my new name? (Refer to rules pp. 171-175.)

9. Faith Jones transfers her stock to you by assignment endorsed on the certificate. The company refuses to make the transfer unless the signature of the transferor is accompanied by a stock exchange member's guarantee or a notarial certificate. Is the demand justified? (See pp. 174-175, paragraph vi.)

10. (1) Company M is formed for $500,000.

(2) $50,000 of its stock, par value, is sold and issued to each of the following persons: A, B, C, D and E, 10 per cent paid.

(3) Company calls 10 per cent. All calls are responded to.

(4) Company sells $25,000 of its stock to F for patent.

(5) Company issues another call for 10 per cent. A does not respond and his stock is forfeited.

(6) F donates $10,000 of his stock to the company.

(7) Company sells $25,000 to G at 105.

(8) Company sells all its remaining stock (both unissued and treasury stock) to H without subjecting H to any future liability on it, at the lowest price possible. Fill in the following table step by step:














Part paid

Full paid


(See pp. 174-175, paragraph vi.)

11. How much stock did the company sell at the end and what price did it receive for the stock? (S. C. L. of N. Y., Sec. 56; N. J., Sec. 21.)

12. Draw up a form of stock ledger and enter in it all the transactions described in problem No. 10.

13. (a) If H had bought the stock at 20, would he be liable to the company for any sum thereon? (b) Would he be liable in any way? (S. C. L. of N. Y., Sec. 56 and 57; N. J., Sec. 21.)

14. H transferred the stock to Y for $100 a share and Y had no notice or information of what H paid for it. The stock is marked "full paid and non-assessable." Would Y have any liability on the stock? (S. C. L. of N. Y., Sec. 56; N. J., Sec. 21; see also Ersfeld v. Exner, 128 A. D., 135.)

15. In each of the above problems, would the directors have any personal liability? (See White, Frost or Harrison on New York Corporations.)

16. The Wisconsin Edison Company (pp. 43-46) sells 100 shares of common stock to A for $3,600. Has A any liability on the stock? (pp. 47-50.)

17. Assume that the Wisconsin Edison Company, after paying all operating expenses and other charges and dividends on the preferred stock, has a surplus of $1,000,000. The directors decide to pay out the entire surplus in dividends. Assume that all the stock is issued and outstanding. Draw up the resolution of the directors declaring the necessary dividend.