The age-herald., 1901-04-29
THE DEDENTURE
 BONDS ARE MANY Nature of the Debenture Con-
 panieS' Contracts PROMISED LARGE PROFITS The Holders Had the Option of Sur rendering Their Bonds at
 Valuation or of Borrowing
 Money on I hem.
PROMISED LARGE PROFITS

Many of the holders of debenture bonds issued by the Continental Security Re- demption Company, and the other com panies absorbed by it, are preparing to file their claims with the receiver.
 These debenture bonds are in substance contracts issued by these companies agreeing that If the holder will pay the company $2 per month for 120 months, which Is $240 in ten years, the company will at the expiration of that time pay the holder $500. There are provisions in the contract, however, that If the holder fails to pay any installment within thir- ty days after the same Is due and payable the contract becomes null and void and all payments made on 1t are forfeited to the company. This Is one of the chief sources of profit to the company, many of the holders failing to pay their in stallments, and thus losing what they have paid in.
 A debenture holder who pays g a month for 120 months and receives $500 makes very little, if any profit. The main hope of profit is in having the debentures re- deemed by the company before maturity. Certain of these bonds for eight months during the year are taken up in regular rotation in multiples of three and re- deemed First bond number one Is re- deemed, then bond number three, then bond number nine and so on. Then bond number two and bond number six, then bond number eighteen, then number twen- ty-seven, etc. This process is continued in like manner until all certificates are
 
 made until after the expiration of six months. Their redemption value is as- certained by fixed financial schedule.
 The BondhoIder's Profits.
 A bond which has been in force twelve months on which $27 has been paid by the investor has a net cash value when the certificate is reached for payment in the regular order of montnly liquida- tion of $4O.65 which is a profit to the in- vestor guaranteed and paid at redemp- tion of $13 65.
 bond which has run twenty-four months on which $51 has been paid in has net cash value of $S091, which is a profit to the investor of $29 91. The finan- cial schedule gives the redemption value of debentures for every month from six | months to 120 months.
 Besides the chance of having the bond redeemed the holder has the option al | any time after the expiration of thirty six months, the monthly premiums hay ing been paid, of making application tt | the company for surrender redemption | to consist of the total amount paid to the company, with per cent interest for the average time. Such applications are con- sidered in the order of their receipt.
 If unforfeited and unredeemed twelve months from date, the owner may, upon giving thirty days written notice, sur | render his debenture and receive in cash 1 50 per cent or less of the amount paid as monthly installments; or may, upon thir- ty days written notice. surrender his bond to the company as collateral se- cur;ty and receive a loan amounting to 50 per cent or less of the monthly install- ments paid, as future payments on the certificate to be credited by the company.
 The Various Funds. All the money paid into the company on account of the certificates was divid- ed into four separate funds.
 The reserve fund, to consist of 20 per | cent of the monthly payments, to be in- vested for the protection of the debenture | holders.
 The redemption fund, to be used for the redemption of all contracts.
 An equation fund, which was an addi- tional reserve fund, and was to consist of 10 per cent of all monthly payments and to be used to liquidate any certih- cate on which not less than thirty-siS monthly premiums had been paid.
 A surplus fund, which was to consist of all moneys not accounted for by the con- tract and which was to include the ex- pense fund, and was to be used as the directors and the management might de- ternine.