The Bridgeport times and evening farmer., 1920-07-23
INFORMATION ON
 SAFE KEEPING
 OF SECURITIES

trust company official speaks of the safe-keeping of securities, he means something entirely different from the safe deposit of securities. It is the purpose of this article to explain that difference.
 - As soon as a Ierson becomes the owner of stocks or bonds, even in a small way, his first thought is, -'How can I care properly for my securi- ties?" The only tangible evidence of his ownership in a corporation-or of a corporations indebtedness to him -is an engraved piece of paper. It is but natural that he should seek some way of protecting That evidence from all danger of loss or theft The usual method has been to rent a safe de- posit box in the vaults of some bank or safe deposit company. Then, with his securities locked in his individua receptacle in a heavy vault surround ed with elaborate devices for its pro- lection, the owner feels at ease re- garding the physical safety of his holdings.
 Here is where the distinction be- tween safekeeping and safe deposit enters. For the safekeeping service, while providing an element Of safety equal in every respect to that of the safe deposit box, also assures that the securities are always available to the owner at any time, no matter where he may be, and, in addition, relieves the owner of all routine duties aris- ing in connection with the care and custody of his securities.
 The security owrer who desires to take advantage of this modern me thod of caring for securities finds that the procedure is simple. He merely turns his certificates over to a trust company, together with a let ter giving his instructions as to how he wishes them Landed, and the trust company gives Eim a receipt listing the securities in 0detail. His holdings are then deposited in a sep arate folder in the company's vaults, and are at all times kept entirely dis tinct from the property of other own CTS and from securities belonging to the company itself. From that time the owners mind is at ease. The com pany assumes entire responsibility for the physical safety of the securities, and as time goes on and the various items of its service begin to function, the owner finds that he has, in effect, acquired a financial secretary.
 After the, company makes its rec ords of the transaction, the securities become a part of it's carefully organ ized system. Whenever coupons on 
 detaches them, collects the amount, and places it to the credit of the own er's banking account-or sends him a check for it, as he may have directed. When the bonds themselves mature, the company attends to the collection of the principle and disposes of the proceeds in accordance with the own- CTS instructions. In cases of this sort notice of the principle becoming due In tr, advance, so that he may arrange to re-invest his money without any de- lay and consequent loss of interest. In like manner, when dividends are declared on any of the stocks, the company sees that the dividend rhecks are received, and notifies the Owner in case there has been any change in the dividend rate.
 In all cases where income is re- ceived, the company prepares the certificates required by the income tax laws, and either submits them to the owner for his signature or signs them itself under a power of attor- ney. The owner periodically receives statements from the company show ing the amount of each security which it is holding for him, it's des- cription, the date it is due, the dates on which interest or dividends are paid, and the income return which he is receiving from 1t.
 But there are other services which the trust company renders him in connection with his securities, serv- ices of a supervisory nature, no less important or valuable than the de- tails of routine care, and which con- tribute still further 70 his freedom from time-consuming detail. For in- stance, his bonds may be "called' foI payment before their due date, either at the option of the issuing company as provided in the bonds, or through the operation of some sinking fund After that date on which a bond is called for payment it ceases to bear interest If the holders attention is not directed to this, he loses the in. terest which he would have received had his money been re-invested i'm lmediately. Or his bonds may have the . right of being converted into stock of the company on or before a certa 1T date. This privilege, often, a valuable one, is lost upon the expiration O. that date.
 Again, he may have the right tt bonds on terms more favorable thar the ones offered to those who are no 'already holders of other securities O the issuing company. This privileg, is generally evidenced by a certificat, commonly known as right Rights entitle the holder to sub scribe to stocks or bonds on the pay ment of a certain sum at a certain time, after which the privilege ceases If the holder does not desire to talk advantage of the opportunity-inas much as it requires his advancing new capital-the rights may usual ly be sold in the open market. Tn quotation in such cases is based ol the difference between the cost of tn new stocks or bonds to the holder an the rate at which the securities ar selling in the open market.
 In time of business depression committees are often formed for tn protection of securities and may re quire immediate deposit with them 0 such securities They usually fix
 date by which the securities must b in their hands. After that date the attach a penalty. In some cases sucI