Most stocks, however, particularly of railroads, are continually changing hands. The buying and selling of such securities has grown to be an enormous business, managed largely by men known as "stock brokers," many of whom are strong factors in the financial world. As a rule, the buying and selling of stocks through brokers is a hazardous form of speculation, which has in it all the elements of gambling, and we cannot advise too strongly against it. There is another kind of stock, which some companies keep in their safes to meet an emergency. This is known as "treasury stock," and, like the preferred, its rate of interest is fixed. Let us suppose that a company is capitalized and prints stock to the amount of $100,000. This company sells $80,000 worth, and the officers believe that they can force the enterprise to success with the money on hand. Now, it follows that, with the same amount of earnings, the profits on $80,000 will be greater than on $100,000, so the $20,000 unsold stock is held in reserve. If to extend the business, or for any other reason, it is necessary to have more money, the treasury stock may be sold to secure the extra capital. If the business is placed on a basis where its success is beyond all question, then the treasury stock may be divided _pro rata_ between the holders of the other stock, for, till disposed of in some way, it was an asset common to the whole company. Each stock certificate tells when dividends are declared; they may be paid quarterly, half yearly, or annually. CHAPTER XXIII BONDS AS INVESTMENTS The best way in which savings can be invested is to use them in the extension of the business in which they were made. The wage earner and the man on a salary cannot, of course, do this, but the farmer, the small tradesman, and the mechanic, who is his own employer, may be able to do so. And so, before looking for a field for investment outside, such men should look about them and consider how best the money may be used right on the ground. AS TO BONDS But after considering the points suggested, the man who has some money may not be able to find a secure and profitable place for it in or near his own home. One of the safest forms of investments is bonds, though, as with other forms of security, the rate of interest declines as the margin of safety increases. If a well-established stock company should wish for any reason to increase its available cash, it may issue bonds, or certificate of indebtedness, bearing from four to five per cent interest, payable semi-annually. These bonds may be transferred the same as stock. They are a good form of security when it is desired to borrow money from the bank, and for many purposes they are as available as so much cash. Such bonds are issued for a specified number of years and have coupons attached, which are cut off when interest is due, and presented to the treasurer of the company for payment.