Most stocks, however, particularly of railroads, are continually changing hands. The buying and selling of such securities has grown to be an enormous business, managed largely by men known as "stock brokers," many of whom are strong factors in the financial world.

As a rule, the buying and selling of stocks through brokers is a hazardous form of speculation, which has in it all the elements of gambling. For some, the potential gain from such gambling makes this an attractive endeavor; for those looking for a safer return on their investment, however, it may prove a risk not worth taking.

There is another kind of stock which we should mention, known as "treasury stock;" some companies keep such stock in their safes to meet an emergency. Like the preferred stock, its rate of interest is always fixed.

To understand the nature of stocks, it may be instructive to use an example. Let us suppose, then, that a company is capitalized and prints stock to the amount of $100,000. This company sells $80,000 worth, and the officers believe that they can force the enterprise to success with the money on hand. It follows, then, that with the same amount of earnings, the profits on $80,000 will be greater than on $100,000, so the $20,000 unsold stock is held in reserve. If to extend the business, or for any other reason, it is necessary to have more money, the $20,000 treasury stock may be sold to secure the extra capital.