ABSTRACT
It is seen, therefore, that the lien of a railway bond is finally shifted from the real estate to the gross earnings and then to the net earnings of the company. The statement that the real lien of a railway bond is upon the commercial success of the company as a carrier of traffic explains some of the anomalies of corporation practice. The principal use of the right of foreclosure in railway bonds is to convey title to a reorganization committee in case of insolvency. The bond is so called because it attempts to combine the lien of a mortgage with contingency of interest. Another form of corporation borrowing of which the people have seen instances in late years, is that of collateral bonds or trust notes. The uncertainty of the value of a claim upon collateral in cases of insolvency is illustrated by the history of the collateral trust bonds of the Oregon Short Line and Utah Northern Company.
