The organization of a _stock company_ involves a peculiar system of deferred payments, in that every holder of stock becomes in a sense both debtor and creditor. He is debtor to all his associate shareholders, and is also their creditor to the extent of his share. _Stock certificates_, like bonds, may pass from hand to hand with ease, and foster the innate spirit of speculation among a commercial people. The organization of a stock company, especially of a great trust, is made relatively easy from this fact, and in this way the general credit of a people is indefinitely extended. A prosperous corporation is likely to distribute the results of its prosperity by increased issues of stock, and the readiness with which the public accepts such issues makes natural, though vicious, the so-called _watering of stock_, familiar to all. The immediate object of watered stock in fairly managed companies is the immediate distribution among shareholders of any increased value without increased cost. As the farms along a line of railway may have doubled their value with no expenditure in improvements, so the railroad itself may have doubled its value in the possibility of earnings through the rapid development of settlements along the line. In ordinary ways this increased value will be shown in the market price of the stock, but an issue of more stock to the present holders of stock certificates will keep down the price of individual shares and yet give the benefit of the increased value to shareholders.