Financial obligation

“ With the third method a permanent increase is secured in the capital funds available for use in the business. Financial policy, governed by the needs of the business and its markets, will always dictate the method to be used for extinguishing or contracting a debt. ”

“ Is it for the best financial interest of the company to borrow on short or long time, to create a floating or a funded debt, etc.—these points require consideration and can, of course, be answered only in the light of the conditions prevailing in each case as to the status of the working capital requirements. ”

“ THE recovery at law of money paid under mistake affords one of the most striking illustrations of the equitable nature of quasi-contractual obligations, — obligations that are, unfortunately, usually called in our law, contracts implied in law. ”

“ We have defined Credit as a right to demand something of somebody, and Debt as an obligation to render something to somebody; the denominations of Money are certainly needful in order to measure this right or obligation; and how can the denominations of money be established or maintained at all separate from the use of some money itself as a circulating medium? Moreover, great as is the undoubted power of Credit, vast as are these five advantages from its current use, still, each particular piece or form of Credit waits for something beyond itself ”

“ By empowering such an authority to buy the companies out in full, with money borrowed at 3 or 31⁄2 per cent., we should come into possession of their works at an annual charge for interest, less, by nearly two-fifths, than our present annual payment to the companies ”

“ No person shall, directly or indirectly, receive in money, goods, or things in action, or in any other manner, any greater sum of value for the loan of money, or upon contract founded upon any bargain, sale, or loan of real or personal property, than is in this chapter prescribed. ”

“ Everybody who had to make a fixed money payment, such as rent or interest, would have had their payment doubled, for they would have had to produce twice as much to meet their obligations as originally sufficed for that purpose. ”

“ As between the debtors it is enough if he performs his share of the obligation, and when he performs the obligation beyond his share, to that extent he performs an obligation belonging to another, for which the right to demand contribution exists. ”

“ Working capital may be required; extensions of plant and market may be desirable; additional equipment and improvement within the plant itself may be advisable; the control of the plant of a competitor may prove advantageous; it may be deemed wise to fund floating liabilities; the refunding of liabilities soon to mature may become necessary; the financial policy may dictate the unification of several diverse forms of debt—these and other purposes may be served by the assumption of long-term debts.
Corporation Bonds
The most common type of fixed liability is the bond. ”

“ Manufacturer, you have summarized the discussion upon credit remarkably well, I think.
Mr. Merchant: So do I, and I am sure that we all understand what constitutes the difference between the right and wrong basis of demand obligation—convertibility or non-convertibility—quick assets or slow assets—the commercial fund and the investment fund. If we keep this thought steadily in view it will help us amazingly when [Pg 193] we come to draw a banking bill demanding the recognition of this fundamental distinction. ”

“ In financial legislation every measure in the direction of greater fidelity in the discharge of pecuniary obligations has been found by experience to diminish the rates of interest which debtors are required to pay and to increase the facility with which money can be obtained for every legitimate purpose. Our own recent financial history shows how surely money becomes abundant whenever confidence in the exact performance of moneyed obligations is established. ”

“ No government financial institution shall extend any new loans, nor shall any government agency enter into any new contracts, with any private party with any past-due loans from a GFI, a record of foreclosure or special bad debt settlement by any GFI, or any pending and unresolved dispute with the government. ”

“ One is the right to demand and receive at maturity the principal amount of the bond representing capital investment. The other is the right to demand and receive interim payments of interest on the investment in the amounts and on the dates specified by the coupons. ”

“ A loan is a temporary gift, and the nature of the transaction remains the same whether the man to whom the loan is made does, or does not, come under the obligation of paying rent or performing services. ”

“ The fact that an obligation to pay has arisen is not sufficient. It is the kind of transaction out of which the obligation arose and its normalcy in the particular business which are crucial and controlling. ”

“ And the advance, therefore, upon every note discounted, without reference to its character as business or accommodation paper, is properly denominated a loan, for interest is predicable only of loans, being the price paid for the use of money. ”

“ The said corporation shall not, directly or indirectly, deal or trade in any thing except bills of exchange, gold or silver bullion, or in the sale of goods really and truly pledged for money lent and not redeemed in due time, or goods which shall be the proceeds of its lands. It shall not be at liberty to purchase any public debt whatsoever, nor shall it take more than at the rate of six per centum per annum for or upon its loans or discounts. ”

“ A profit made, or loss imposed on the necessities of the borrower, whatever form, shape, or disguise it may assume where the treaty is for a loan, and the capital is to be returned at all events; has always been adjudged to be so much profit taken upon a loan; and to be a violation of those laws which limit the lender to a specified rate of interest. ”

“ It would present too great a temptation to parties to intermeddle in the management of valuable property or funds in which they have only the interest of creditors, and that perhaps only to a small amount, if they could calculate upon the allowance of a salary for their time and of having all their private expenses paid. ”

“ The national banks and trust companies in their returns to the federal government and to the state under the 12 1/2 per cent. income tax law are allowed certain deductions of income from specified types of securities in addition to the expense of conducting their business, bad debts, losses, etc. ”

“ The State, in fact, gives its guarantee against loss from investments in bad or insufficient securities, and against loss from delay in the investment, and it guarantees that the interest, the rate of which is fixed by the Government, shall be paid regularly and punctually, free from all charges by the office. ”

“ One of its most obvious and distinguished characteristics is, that it exempts the private property and persons of the stockholders from all liability for the payment of the debts of the company. By the laws of every State in the Union, every man is, I believe, liable for the payment of his debts, to the full amount of his private fortune ”

“ By these laws it is made penal for a man to receive more than six per cent. interest for the use of any sum of money which, by a loan, he puts at hazard, and the use of which he deprives himself of. Now, sir, this bank is permitted, contrary to those laws, to draw an interest on twenty or thirty millions of dollars, when, in truth, the whole extent of its responsibility, the whole sum which it puts at hazard, and the use of which it foregoes, is only its original stock of ten millions. ”

“ We, in event, literally sold them for nothing, and are obliged to pay their present holders an annual sum for keeping them in possession; for many of us have, or must soon pay for the interest of them, a sum nearly or quite equal to the money given to purchase them, and still be annually taxed to discharge the interest and principal of said securities. ”

“ Authority is vested in the corporation by its charter to receive such deposits in trust for the owner, and to loan, use, and improve the same, and to apply and divide the net income and profits thereof in just proportions among the persons making such deposits, subject to certain reasonable deductions as therein provided. ”

“ The time and manner of repaying, unless the loan be placed on an irredeemable fund. This enumeration is liable to a variety of objections. It omits, in the first place, the pledging or mortgaging, of a fund for the security of the money lent; an usual, and in most cases, an essential ingredient.
The idea of a stipulation of an interest or no interest, is too confined. It should rather have been said, to stipulate the consideration of the loan. Individuals often borrow upon considerations other than the payment of interest. So may government; and so they often find it necessary to do. ”

“ But that obligation, that debt, could be satisfied if valid consideration were given for the surrender of the claim; and anything agreed upon, as a horse, or ten shares of stock, or anything else the parties agreed to, would be good consideration for the agreement to surrender the claim, so long as one did not get into the difficulty alluded to under the heading of consideration, of trying to surrender a right to a larger liquidated sum in consideration of the payment of a smaller sum of money. ”

“ A law authorizing the government to guarantee a certain percentage of any loss which may be suffered by any private bank, insurance company or any other credit institution, on account of loans it may grant to private individuals for home construction, the amount of each loan not to exceed P10,000 for each individual borrower, and fixing the aggregate amount of the loans for which such guarantee may be given. ”

“ The money arising from any loan creating such debt or liability shall be applied only to the work or purpose specified in the act authorizing such debt or liability, or for the payment of such debt or liability, including any notes or obligations issued in anticipation of the sale of bonds evidencing such debt or liability. ”

“ There shall be no privileged class of creditors. Official salaries, pensions, bonds, and all other debts and obligations, public and private, shall be discharged in the legal-tender money of the United States, strictly according to the stipulations of the laws under which they were contracted. ”

“ In no case shall the insurance granted by the Administrator under this section to any such financial institution exceed 20 per centum of the total amount of the loans, advances of credit, and purchases made by such financial institution for such purpose * * *.' Act of June 27, 1934, c. ”

“ When funds are obligated for a direct loan or loan guarantee, the estimated cost shall be based on the current assumptions, adjusted to incorporate the terms of the loan contract, for the fiscal year in which the funds are obligated. ”

“ If an expense is capital, it cannot be deducted as 'ordinary and necessary,' either as a business expense under § 162 of the Code or as an expense of 'management, conservation, or maintenance' under § 212. ”

“ Our merchants and bankers owe unsettled balances or accounts, and large amounts of our securities are held there—National, State and municipal bonds, bonds and stock of our railroads, street railways and industrial corporations, and even mortgages on city property or farms, placed there by loan companies. ”

“ He will most require this aid in the making of leases, deeds, agreements, and other legal instruments.
The balance of cash, which may often be considerable, ought not be allowed to lie idle in the house. All money is part of the vital blood of society, and should be kept in circulation. ”

“ The capital subscribed by the intending shareholders must necessarily be paid in in money or in the legal tender of the country. It is not necessary that the whole should be paid in at the outset, but the payment of the whole usually precedes the full establishment of the business ”

“ Commissions, and fee payments on your purchases, sales, and rental collections to stock, bond, real estate, and commodity brokers plus your attorneys' fees is another enormous and excessive drain on your resources. ”

“ Fixed sums are in some instances required to be annually paid into the treasury of the State, and in others a prescribed percentage is levied on the stock, assets, or property owned or held by the corporation, while in others the sum required to be paid is left indefinite, to be ascertained in some mode by the amount of business which the corporation shall transact within a defined period. ”

“ Money, or a circulating medium of any kind, in its quality of representing property and labour, conveys property and labour to its possessor; and if A, entitled to the menial services of B, contracts to receive of B their value in money, though B may prefer this mode of payment, he must still perform the same value in labour to acquire the money it is commuted for. ”

“ Admitting, for the present at least, the reasonableness of the proposed allowance for the expenses of the banking and insurance departments of the business, we have before us the problem how to equitably adjust the burden among the great variety of policies. ”

“ In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same ”

“ All other payments were made in bonds bearing interest at eight per cent. per annum till redeemed. Strenuous reductions were made in the public expenditure, the utmost care was exercised over the collections, and in twelve months' time enough cash had been accumulated to pay off the whole of the new paper debt, besides meeting the ordinary expenses of government. ”