LEGAL FEATURES 53 



pare the original records, but it is well worth 

 the difference in price. The titles are made 

 perfect, the value of the security increased, the 

 bonds become a more desirable investment and 

 their price is accordingly enhanced. 



The attorneys must examine the resolutions 

 of stockholders and directors authorizing the 

 bond issue. They must make sure the meetings 

 were properly called, the necessary amount of 

 shares voting and the bonds legally authorized 

 according to the constitution and by-laws of the 

 company and any laws of the state or nation 

 that might affect them. Some bond houses in- 

 sist on an unanimous vote of all the stock in 

 favor of the bond issue before they will buy the 

 bonds. This is good practice no matter what 

 the state laws may call for. It prevents any 

 possible trouble with minority interests and 

 creates a favorable impression all around. 



The attorney usually makes the arrangements 

 with the trustee for the various services to be 

 performed in that function. The attorney 

 drafts the text of the bond and attends to all 

 the other legal matters. A recent timber bond 

 issue failed to be accepted at the last moment 

 when it was discovered there were defects in 

 the legal procedure when the company was in- 

 corporated several years before. They were 

 purely technical faults due to a slipshod attor- 

 ney, but they killed the bonds. Each individual 

 bond issue will have its particular legal aspects. 

 In general, however, the attorneys must see 



