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Title: Everybody's Guide to Money Matters
 - With a description of the various investments chiefly dealt in on the stock exchange, and the mode of dealing therein
Author: Cotton, William, F.S.A., of Exeter
Language: English
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Copyright Status: Not copyrighted in the United States. If you live elsewhere check the laws of your country before downloading this ebook. See comments about copyright issues at end of book.

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 - With a description of the various investments chiefly dealt in on the stock exchange, and the mode of dealing therein" ***

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Transcriber's Notes:


I have used the UK pound symbol (£) in this
e-text as it appears in the original.  [It
looks like an L with a crossbar.]  I am
uncertain whether this symbol will be
supported on all systems and fonts that this
text file ends being viewed with.  My apologies
if this applies to you.

I have endeavoured to retain the original table
formatting, rather than to reformat the tables
in alignment with the text.  However, as several
of the tables were in landscape orientation in
the original, this has necessarily resulted in
some very long lines in the tables (up to 130
characters in some cases).

Finally, as I checked the transcription process
certain errors in the tables came to light.
Rather than correct these errors, as they are
an integral part of the original, the ones that
I noted are marked with underscores (_).  [Note
that underscores are also used to mark _italicised_
passages in the original text.]



Everybody's Guide
to
Money Matters

_With a description of the various invest-
ments chiefly dealt in on the stock
exchange, and the mode of
dealing therein_

also

Some account of the pitfalls prepared for the unwary,
and suggestions to the cautious investor.

by

William Cotton, F.S.A.

Late treasurer of the county of Devon,
author of "An Elizabethan Guild," "Gleanings from Records,"
"The Bank Manager," etc.
Originator of the postal order system.

London 1898.



PREFACE.


THE Author, emboldened by a Banking expe-
rience of over forty years, offers this little work
to the public in the hope that, elementary though
it be, it may prove acceptable to many persons
of both sexes.

    The work has been prepared chiefly for the
use of women, a vast proportion of whom are
brought up in utter ignorance of money matters
in the simplest form, though otherwise they may
be highly accomplished.

    The subject, it must be allowed, is not a fasci-
nating one, but there are periods in the lives of
most persons when some knowledge of money
matters may be useful and even necessary.

W.C.



CONTENTS.

                PAGE
CHAP. I. - What is Money? - What to do with it - How to
    open a Bank Account - How to draw Cheques . . .   1

CHAP. II. - How to Deposit Money at Interest - The Bank
    Pass Book - The Advantages of a Bank Account  .  13

CHAP. III. - London Banks and Banking - Bill of Exchange -
    Deposits - Scotch and Irish Banks . . . . . . .  20

CHAP. IV. - Investments - What are Securities - Mortgages
    - The Funds - The National Debt - Stocks and Shares -
    Dividends, how Payable  . . . . . . . . . . . .  26

CHAP. V. - British Government Funds - The Different Debts
    - Terminable Annuities - Loans Guaranteed by Govern-
    ment - Dividends, how to Receive them - Automatic Re-
    investment of Dividends . . . . . . . . . . . .  35

CHAP. VI. - Government Annuities, how to Purchase - When
    Payable - Tables - Insurance Office Annuities - Tables -
    Indian Government Stocks  . . . . . . . . . . .  41

CHAP. VII. - Loans to Corporations, &c. - Colonial Govern-
    ment Securities - Inscribed Stocks and Bonds - List of
    Inscribed Stocks - Bonds and Coupons - Foreign Govern-
    ment Stocks - Caution in Investing - Railways - The
    Different Stocks and their Relative Values - The War-
    rants for Interest and Dividends - Indian Railway Stocks
    - American Railways - Foreign Railways - Banks - As
    an Investment - Colonial and Foreign Corporation Stocks
    - Canals and Docks - Gas - Electric Lighting, Telegraph
    and Telephone - Water Works - Breweries - Industrial
    Companies - Financial, Land and Investment Companies
    - Financial Trusts - Insurance Companies - Steamship
    Companies - Mines . . . . . . . . . . . . . . .  55

CHAP. VIII. - The Stock Exchange - Brokers and Jobbers -
    How Business is Done - "Contango" and "Backwarda-
    tion" - "Bulls" and "Bears" - "Boom" and "Slump"
    - Settlement - Risk in Keeping Convertible Bonds -
    Brokers - Traps and Snares - Good Companies and Bad -
    Advertising Swindles - Gold Mines - A Typical Case -
    Exploration Companies . . . . . . . . . . . . .  79

CHAP. IX. - Life Insurance - Its Advantages - Mutual and
    Joint Stock Companies - Choice of Office - Form of Pro-
    posal - Examination - Premiums, how Payable - Examples
    of Advantage - Various Modes of Insuring - Bonuses -
    How Applied - Endowment Insurance - Non-profitable
    Policies - Settlement Policies - Endowment of Children -
    Insurance of Joint Lives - Insurance on Longest of Two
    Lives - Surrenders - Fire Insurance - Farm Stock - Other
    Insurances  . . . . . . . . . . . . . . . . . . 101

CHAP. X. - A Building Society, Mode of Doing Business -
    How to Obtain a Share, and Table of Payments - How to
    Withdraw, and Table - Borrowers - How to Build a
    House - Table of Payments - How Profits are made - The
    Weak Points of Societies Badly Conducted - What Leads
    to Collapse - Necessity for Choosing Directors of Standing
    and Character - Necessity for Efficient Audit of Ac-
    counts  . . . . . . . . . . . . . . . . . . . . 122

CHAP. XI. - The Post Office Savings Bank - Mode of Depo-
    siting - Opening an Account - Convenience and Precau-
    tions - Limit in Amounts - Withdrawal - Payment to
    Representatives - Government Annuities, &c. - Advan-
    tages the Post Office Offers  . . . . . . . . . 134


APPENDIX.

Table of Interest on Investments  . . . . . . . . . . . 142
    Examples of Business Communications - Sending Money
            by Post . . . . . . . . . . . . . . . . 143
    Requiring Money   . . . . . . . . . . . . . . . 143
    Acknowledging Receipt . . . . . . . . . . . . . 144
    Transfer to Deposit Account . . . . . . . . . . 144
    Arranging Cheques to be Honored by Another Bank 145
    Request for Passport and Circular Notes . . . . 145
    Ordering Letter of Credit . . . . . . . . . . . 146
    Remitting in this Country . . . . . . . . . . . 146
    Lodging Securities at Bank  . . . . . . . . . . 147
    Order to Receive Dividends  . . . . . . . . . . 147
    Ordering Investments  . . . . . . . . . . . . . 148



EVERYBODY'S GUIDE
TO
MONEY MATTERS.


CHAPTER I.
EASY STEPS TO MONEY MATTERS.

MONEY is the medium by which we may acquire
from others, who are willing to part with them,
such things as we may desire.  The price of an
article is the value set upon it by the possessor,
as represented by an expressed sum in money.

    The price of some things are arbitrarily fixed
by law or custom, such as stamps, professional
fees, duties, &c.

    The standard of value in this country is gold,
and it is as against gold, represented by coins
of different denominations, that the value of all
commodities is estimated.

    The authorised coins of the United Kingdom
consist of the following pieces:-

GOLD.
    Five-sovereign piece, equal to Five pounds.
    Two-sovereign piece, equal to Two pounds.
    One-sovereign piece, equal to One pound.
    Half-sovereign piece, equal to Half-a-pound.

SILVER.
    A crown, or five-shilling piece, equal to one-
fourth of a sovereign.
    Double-fiorin, or four-shilling piece, equal to
one-fifth of a sovereign.
    Half-a-crown, or two shillings and sixpence,
equal to one-eighth of a sovereign.
    Florin, or two-shilling piece, equal to one-
tenth of a sovereign.
    Shilling piece, equal to one-twentieth of a
sovereign.
    Sixpenny piece, one-half of a shilling.
    Threepenny piece, one-half of a sixpence.

BRONZE.
    A penny, equal to one-twelfth of a shilling.
    Halfpenny, equal to one-half of a penny.
    Farthing, one-fourth of a penny.

    In writing or speaking of sums of money the
expression takes the form of "pounds, shillings,
and pence"; for example, Twenty-one pounds
five shillings and nine pence.  Sometimes the
word "sterling" is added, meaning genuine or
standard coin of the realm.  In accounts the
figures are placed in three parallel columns
under the heading of £ s. d. "£" for pounds,
"s." for shillings, and "d." for pence, from
_Libri_, _solidi_, and _denarii_, the Latin equivalents
for these values.

    ||     |     |     |
    ||  £  |  s. |  d. |
    || 21  |  5  |  9  |
    ||     |     |     |

    Another form of money, if it may be so
termed, is the Bank note.  This is simply a
promise to pay, on demand, the amount repre-
sented on the note, in gold or some legal tender.
The most common in use are £5 notes, but there
are others of different denominations, such as
£10, £20, £50, £100, &c.  Some country banks
still issue these notes, but they are by law
restricted from issuing beyond a certain amount
fixed by the Bank Act of 1844.  No new bank
can issue notes, and those which have the privi-
lege are gradually relinquishing it, so that in
course of time there will be only one bank
entitled to issue notes, and that is the Bank of
England.

    The notes of country banks, other than the
Bank of England, are not a legal tender; that
is, it is not compulsory on anyone to accept
them in payment of a debt.

    The Bank of England is the oldest joint-stock
bank in the country, and although, in its consti-
tution, it does not differ materially from other
joint-stock banks, yet, being the agent of the
British Government in all money matters, and
possessing other exclusive privileges, it is looked
upon as one of the enduring institutions of the
country.*  (* See Joint-Stock Banks, p. 68.)

    Amongst other privileges it enjoys is the
authority to issue promissory notes to a certain
extent, representing respectively sums of £5,
£10, £20, £50, £100, £200, £500, and £1,000.

    These Bank of England notes, as they are
termed, are absolutely convertible, that is to say,
the bank is legally bound to exchange them for
gold at all times when demanded; and a cer-
tain amount of gold has always, by law, to be
kept in stock for the purpose.  Moreover, the
tender of Bank of England notes, the same as
with gold, in payment of a debt, cannot, in this
country, legally be refused.  No one, however,
can be compelled to give change; that is to say,
if you owe a person £4 15s., you are bound
in strict law to pay him that exact sum.  You
cannot offer him a five-pound note and insist
upon his giving you 5s. change, though, as a
matter of courtesy and convenience, payments
are constantly accepted in that form.

    It must be obvious that these Bank of Eng-
land notes are a great convenience, and even a
necessity to the public, as it would be quite
impossible to carry on the enormous business of
the country if such a cumbersome medium as
gold coins was the only legal way of paying
debt.  Nevertheless, gold coin of proper weight
is a legal tender to any amount.  Silver is not
a legal tender for sums over two pounds, nor
bronze for sums over one shilling.

    But even with bank-notes the requirements
of business are not fully satisfied, as there is
always the risk of their being lost or stolen.  To
avoid this risk, and to provide facilities for
buying and selling, with the complications inci-
dent thereto, and the passing of money from
one hand to another, an intermediary agency is
required, and that agency is to be found in the
banking companies.  In nearly every town,
having a pretence to the name, in the United
Kingdom, will be found a branch bank of some
establishment of more or less repute, and those
who are fortunate enough to possess money will
do well to take advantage of such an agency
for their money matters, having, of course, first
ascertained that the standing of the company is
such that they may do so with safety and confi-
dence.

    As a first step we give an example of what is
occurring daily in hundreds of cases.

    Miss Jane Smith is a lady who has been
brought up without the slightest instruction in
business matters, indeed has rather plumed her-
self on the idea of being quite above such things.
Suddenly she finds herself dependent upon others
for guidance and advice.  She would like to act
for herself if she only knew how to do so safely,
being of a somewhat suspicious temperament and
mistrustful of advice from friends or acquaint-
ances.  Even the highly respectable lawyer,
who has handed her a packet of documents
and £500 in cash (a legacy from her uncle), with
much sage counsel, she is not quite sure about,
for she has imbibed the idea from her youth that
lawyers are not always to be trusted.

    The packet of documents in the tin box as
they came to her is set aside in a safe place for
the moment, but the bank-notes and gold are a
matter of serious concern to her.  She fears to
carry them about her person lest she should
lose them, or be robbed, and feels sure that if
kept in the house they will attract any burglars
that may be in the neighbourhood.

    The best thing Miss Smith can do is to go to
one of the neighbouring banks of repute - say
the Blankshire Bank - and ask them to help her
out of the difficulty.

    She has an interview with the Manager or
Cashier, tells her story, and is advised to leave
the money at the bank and have an account
opened in her name.  This course she consents
to adopt, and hands over the £500, requesting
some acknowledgment that she has done so, in
common terms, "something to show for it."

    Many banks provide and require their cus-
tomers to use "paying-in slips," that is, printed
forms specifying the payments made to the bank
under the head of cheques, notes, gold, and
silver.  A form is handed in with each payment,
and the initials of the cashier placed against the
amount noted on the counterfoil, which is re-
tained by the customer.

    In addition to this Miss Smith will be pre-
sented with what is called a pass-book - a book
passing between the bank and herself, now
become a customer - in which she will find it
stated in the briefest business manner, that the
Blankshire Bank is Dr. (debtor) to, or owes,
Miss Jane Smith £500.  She will be told that
portions of this money may be drawn out from
time to time as she may need it, but this can
only be done by cheques, or forms of request to
the bank to pay out the amount desired.*  These
forms, provided by the bank, are printed, blank
spaces being left to be filled up in writing, and
they are made up in books of various sizes, each
form bearing a penny stamp.  The customer
pays for the book according to the number of
stamps it contains, but no more.  Miss Smith
buys a cheque-book, and, opening it, finds the
following form in print:-

(* The practice with some people of writing cheques
on plain paper is discountenanced by bankers, and
is to be condemned.)

---------------------------------------------------------
| No. 10901.    | No. 10901.            __________ 189  |
|               |                                       |
| _________189  |   To the Blankshire Banking Company,  |
|               |                Blanktown.             |
|               |                                       |
| _____________ | Pay to ____________________ or bearer |
|               |                                       |
|               | the sum of __________________________ |
|               |                                       |
| £____________ |   £___________         ______________ |
|               |                                       |
---------------------------------------------------------

    She then recollects that she has no money to
go on with, and asks to have £10 of the £500
she has left in the bank.  The cashier offers to
fill up the blank spaces in her first cheque,
making corresponding entries in the counterfoil,
and having done so asks her to sign it at the
foot.

    It then appears as follows:-

---------------------------------------------------------
| No. 10901.    | No. 10901.           __March_I,_ 1898 |
|               |                                       |
| March I, 1898 |   To the Blankshire Banking Company,  |
|               |                Blanktown.             |
|               |                                       |
| ____Self_____ | Pay to ___Self_____________ or bearer |
|               |                                       |
|               | the sum of ___Ten_Pounds_____________ |
|               |                                       |
| £10__________ |   £10_________         __Jane_Smith__ |
|               |                                       |
---------------------------------------------------------

    The cheque is detached from the counterfoil
at the dotted line, and is retained by the cashier,
who hands over £10 to the lady together with
the book containing the remaining cheques.

    "Oh! I had quite forgotten - I owe Miss
Tucker, the milliner, £23 10s. Will the cashier
please to let me have £23 10s. to pay her
with."

    Miss Smith is told that there is no need of
incurring the risk of carrying the money through
the streets, as a cheque in favour of Miss Tucker
will equally answer the purpose; and again he
fills up the blank spaces in a second cheque,
which appears thus:-

---------------------------------------------------------
| No. 10902.    | No. 10902.    !   !  __March_I,_ 1898 |
|               |               !   !                   |
| March I, 1898 |   To the Blank!hir! Banking Company,  |
|               |               !Bla!ktown.             |
|               |               !   !        order J.S. |
| _Miss_Tucker_ | Pay to ___Miss_Tucker______ or ====== |
|               |               !   !                   |
|               | the sum of _Twenty-three_pounds_10/-_ |
|               |               !   !                   |
| £23_10/-_____ |   £23_10/-____!   !    __Jane_Smith__ |
|               |               !   !                   |
---------------------------------------------------------

    "You see," says the cashier, "I have struck
out the word 'bearer' and substituted the word
'order.'  This will oblige Miss Tucker to sign
her name on the back of the cheque (technically,
to 'endorse it') before it can be paid.  Your
initials are required to confirm the alteration.*
I have also drawn parallel lines across the
cheque, which makes it what is termed 'a
crossed cheque,' and a crossed cheque cannot
be cashed direct, but must be paid into an
account at a bank.  So you see you will have
the signature of Miss Tucker, proving that she
has been paid her bill by means of this cheque;
and it is obvious that by crossing the cheque,
should it be lost and made an improper use of,
there would be no difficulty in tracing through
whose hands it passed."

(* Banks also issue cheques with the word "order"
printed instead of "bearer.")

    Miss Smith soon learns that all her trades-
men's bills may be paid in the same way, with-
out going to the bank to draw the money, and
with the advantage that the cheque is not only a
proof of payment, but that she has also a record
of her accounts in the bank pass-book.

    It may here be mentioned that should a banker
cash a cheque with a forged _endorsement_, he is
not responsible, and the loss falls on the drawer
of the cheque.*  The crossing of a cheque, how-
ever, necessitating its being paid to a bank
account, would facilitate the discovery of the
culprit.  An additional security is given to a
crossed cheque if it bears the words "not nego-
tiable" written underneath the crossing.  This
means that it cannot legally be used as a means
of payment to a third party.  In the event of
such a cheque going wrong, the loss would fall
upon a bank negotiating it for a customer.  The
bank could be called upon to make good the
amount to the payee.

(* If, however, he pays a cheque with a forged
signature he is responsible, as he is supposed
to know the handwriting of his own customer.)

    It is illegal to post-date a cheque, the reason
being that bills of exchange, which are obliga-
tions to pay money at a future date, bear a
much higher stamp duty than cheques.  It
would, therefore, be a fraud upon the revenue to
make cheques do duty for bills of exchange.



CHAPTER II.
THE BANK ACCOUNT.

THE manner in which Miss Smith had left her
money on what is termed a current account at the
Bank is convenient to herself and profitable to
the Blankshire Bank, for they have the use of it
free, paying nothing for that use in the way of
interest.

    She will have other money coming to her in
the shape of rents, and the interest on money
invested, as represented in those documents in
the tin box - all which money can be handed
over to the Bank in the same way that the £500
was.  There is, however, no reason why she
should leave so much lying idle without obtaining
any interest upon it.  She will reckon up how
much she will require for, say, the next six
months, for house expenses and personal use,
and also how much, on the other hand, she will
be paid in rents or interest, and will then find
that there will be a sum of; at least, say, £300
over and above all she desires to spend.

    If she is wise, she will draw out this sum by
cheque from her current account and have it
placed on a deposit account.  In this case the
bank will give her a deposit receipt or interest
note, somewhat in this form:-

---------------------------------------------------------
|  No. 23975                          26th June, 1897.  |
|                                                       |
|              Blankshire Bank, Blanktown.              |
|                                                       |
|     RECEIVED from Miss Jane Smith the sum of Three    |
| Hundred Pounds, to be accounted for with interest at  |
| 2.5 per cent per annum, on 14 days' notice of         |
| withdrawl.                                            |
|                                                       |
|    Entered - J. Hill               T. Dale, Manager.  |
|                                                       |
---------------------------------------------------------
(and, written across the receipt "Not transferable")

    If the money is at any time wanted in a hurry,
banks do not insist upon notice being given to
withdraw, but deduct the days of notice from the
time the interest note has run.  For instance, if
the money has been deposited for 184 days, the
14 days of notice will be deducted and interest
allowed on 170 days only.  These receipts or
notes are not transferable, and the repayment of
the principal or the interest must be applied for
by the owner either personally or by letter.

    Money may be deposited in a bank in two
names and be repayable to both conjointly,
by either separately, or to the survivor of the
two.  The bank will require a form to be signed
by both parties, specifying the manner in which
it is desired that the money may be deposited.
By giving directions, too, the principal may be
retained in the name of one person and the
interest paid to another.  Some banks adopt the
plan of book deposits, that is, the amount paid
in is entered in a pass-book, and the interest
credited half yearly.  This may go on accumu-
lating, or it can be drawn out in one sum only,
not as in the case of a current account by
cheques of various amounts.

    Having thus established relations between
Miss Smith and her bankers, let us see at the
end, say, of a month, the state of her pass-book,
premising that in the meantime she has received
and paid into the bank some moneys, and also
signed and sent cheques to some of her trades-
men:-

--------------------------------------------------------------------------------
|                                      ||                                      |
|         THE BLANKSHIRE BANK.         ||              BLANKTOWN,              |
|                                      ||                                      |
|       Dr. to Miss Jane Smith.        ||                  of Blanktown.  Cr.  |
|                                      ||                                      |
|--------------------------------------||--------------------------------------|
|1897|  |                    | £ |s.|d.||1897|  |                    | £ |s.|d.|
|June|24| To Cash    .   .   |500| 0| 0||June|24| By Self    .   .   | 10| 0| 0|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|July| 8|  " Dividend Consols| 11| 4| 6||  " | "|  " Tucker  .   .   | 23|10| 0|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|  " |23|  " Rent from Cook  | 24|10| 0||  " |26|  " Deposit receipt |300| 0| 0|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|  " |25|  " G.W.R. dividend | 30| 0| 0||July| 1|  " Figges  .   .   |  8| 3| 4|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|    |  |                    |   |  |  ||  " | 3|  " Jones   .   .   |  5|10| 0|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|    |  |                    |   |  |  ||  " |24|  " Self    .   .   | 10| 0| 0|
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
|    |  | Total £565 14s. 6d.|   |  |  ||    |  | Total £357 3s. 4d. |   |  |  |
|    |  |                    |   |  |  ||    |  |                    |   |  |  |
--------------------------------------------------------------------------------

    By the entries in the pass-book it will be per-
ceived that £565 14s. 6d. has been paid into the
bank, as appears on the left-hand page, and that
£357 3s. 4d. has been drawn out, as appears on
the right-hand page.  The balance or difference
between the two, amounting to £208 11s. 2d.,
remains to the credit of Miss Smith.

    In this comfortable state of things we will
leave Miss Smith, who can now claim to consult
her banker in matters of business.

    He will be able to offer her facilities in various
ways.  He will hold for her, in safe custody, any
deeds or securities; and whilst she is absent
from home will take charge of her plate or valu-
ables, free of all expense.  If she is travelling
about the country he will arrange so that her
cheques on the Blankshire Bank may be cashed
at any other bank in the kingdom.  If she has
occasion for it he will send money on her account
to some other person's credit at any bank in the
kingdom or the civilised world.  If she desires
to travel abroad, he will obtain a passport for
her and provide her with "circular notes," which
may be turned into money at any place she is
likely to visit.

    He will buy and sell stocks, shares, annuities,
&c., for her, and collect dividends, interest,
coupons, &c., payable anywhere at home or
abroad.  He will cheerfully advise her on all
matters connected with money, and it will be
quite the exception if she does not, in all things,
find him a safe and prudent counsellor.

    As a rule, no charge is made by a bank for
keeping an account, provided the balance, that
is, the amount of money they hold for the cus-
tomer - technically the credit balance - is not
persistently small.  If it were always under £50
that would be considered small, but if only occa-
sionally below that figure, and sometimes above
£200 for any time, it would generally be exempt
from charge.  When a charge is made for keeping
an account which is not remunerative or free
from trouble, it does not amount to much, and is
fairly earned.

    If an advance of money is required for a tem-
porary purpose, the bank will often lend the
money by allowing the account to be overdrawn,
that is, the balance in the pass-book will appear
as due _to_ the bank instead of _from_ the bank for
the sum required from time to time.  This is
sometimes convenient when the advance is only
required for a short time as avoiding the necessity
for disturbing any investment which otherwise
would have to be sold.  As a rule, however
(though exceptions are made where the customer
is absolutely to be depended upon), the bank
would desire some security to be deposited.
This may take the form of a sufficient portion in
value of stocks or shares in which the customer
has invested, or sometimes the personal guar-
antee of one or two responsible persons is
accepted.  This is quite regular business, and
the interest usually charged is fair and reason-
able.



CHAPTER III.
LONDON BANKS AND BANKING.

THE private banks now doing business in
London are few in number.  The tendency of
late years has been to transform these banks
into "Limited Liability" Companies, or to amal-
gamate with companies of this character.  It
looks as though, in course of time, private banks
will altogether cease to exist, the joint-stock
banks being better adapted to modern require-
ments.  The private banks do not invite deposit,
and interest on accounts is not allowed.  They look
to the average balance on each account to
compensate for the trouble and expense of
keeping it, with a considerable margin for profit.
They require that not less than a certain fixed
sum shall be the minimum balance of a
customer's account, but, of course, the larger
the balance the better for the banker.

    The balance in some cases may be very large
where the bank has a wealthy connection, it
being a boast with some rich persons that they
have never less than £10,000, or even £20,000
at their bankers.  The money so left in the
banker's hands is lent out, or invested in various
ways, and all that he receives in the shape of
interest, after paying the expenses of his estab-
lishment, is clear profit.  In short, the £500 a
year which the customer might obtain if he in-
vested the £20,000 he leaves at the bank, goes
to the banker.

    At the head of the joint-stock banks of London
is the Bank of England, which, like the private
banks, do not take deposits upon which interest
is allowed, but rely upon the cash at their dis-
posal in their customers' accounts for their
profits.  In all other respects their mode of
transacting business is much the same as that
of other joint-stock banks.  Accounts may be
opened by merchants and traders, and by private
individuals of known respectability, and no par-
ticular sum is required to be lodged upon open-
ing the account.  Formerly cheques were not
allowed to be drawn for a less sum than £10,
but now there is no restriction as to the amount.
The profits of the bank are chiefly made by dis-
counting bills of exchange, which is done to an
enormous extent.  A bill of exchange is an in-
strument by which a party who is owed money
by another party, and accords to him the benefit
of delay in payment, for a fixed period, draws
on him in a form of order to that effect.

    For instance, the firm of Bullion & Co. have
sold to John Robinson certain goods, which
need not be specified, as the principle applies
in all cases, whether it be bankers, merchants,
or traders, and for all transactions where one
party is indebted to another.  The form drawn
by Bullion & Co. on John Robinson, which
requires to be stamped according to the amount,
would be as follows:-

---------------------------------------------------------
| Due 1st Nov.                                          |
| ------------                                          |
|     £500                    London, 29th Aug., 1987.  |
|                                                       |
|  THREE months after date pay to our order the sum of  |
| Five Hundred Pounds for value received.               |
|                                                       |
|  To Mr. John Robinson,               Bullion & Co.    |
|         Merchant,                                     |
|             Liverpool.                                |
|                                                       |
---------------------------------------------------------
(Written across:
                Accepted payable
                at the Bank of
                London.
                       J. Robinson. )

    The acceptance of the obligation by John
Robinson is written across the face of the docu-
ment, and he makes it payable, as most bills
are for convenience, at a London bank, pre-
sumably the London agent of his own bankers
at Liverpool.  Payment becomes due three
months after date, with three days of grace
added according to custom.  Probably Bullion
& Co. would find this £500, if in cash, useful
in their business, and supposing the parties to
be of good repute, they can readily convert it
by discounting this bill at their bankers or at
a bill broker, who, deducting a small amount
in the shape of discount, will hand over the
balance to the firm, or carry it to the credit of
his account.  It is this discount that constitutes
the profit to the banker, and the rate varies
according to the value of money, whether it is
plentiful or scarce.

    The rate of discount is supposed to be regu-
lated by the Bank of England, and the "bank
rate," which is arbitrarily fixed by the directors,
is moved up and down (sometimes for other
reasons than the value of money), and is sup-
posed to be the rate of discount for bills of the best
description.  It is found in practice, however,
that when there is an abundance of money seek-
ing employment, bills are discounted at lower
rates.

    The Bank of England make purchases and
sales of British or Foreign securities, and divi-
dends on stocks will be received and placed to
account. Exchequer bills, bonds, railway deben-
tures, or any other securities may be deposited,
and the interest, when payable, will be received
and placed to a customer's account free of
charge.  Cash boxes (contents unknown), plate
chests, and deed and security boxes are also
received for customers for safety, free of charge,
and all other banking facilities conceded, as are
given by the Blankshire Bank.

    The other joint-stock banks of London trans-
act their business in all respects in the same
manner as the Bank of England.  In addition
they invite money on deposit, allowing interest
on the same.  Sums of money lodged on deposit,
and they may be by persons who are not other-
wise customers, are not carried to a customer's
account, but, as in the case of the Blankshire
Bank, are placed on a special form of receipt
which is changed for a new one when the in-
terest or any part of the principal is withdrawn.
The rate of interest allowed by the Blankshire
Bank, and by the country banks generally, is a
fixed one, but that of the London banks is
regulated by the value of money, and fluctuates
from time to time, notice being given by adver-
tisement in the London newspapers of any
change in the rate.  Deposits are received by
the London bankers "at call," that is, payment
may be required on demand; or at an arranged
term of notice of repayment.  The rate of in-
terest on money at call is less than where
notice is required, and the longer the period of
notice the higher the rate of interest.

    In Scotland there are no private banks, and in
Ireland only two.  The joint-stock banks are
numerous, and their mode of business is practi-
cally the same as in England, indeed the
English system is founded on that practised by
the Scotch many years before the joint-stock
bank was general in England.



CHAPTER IV.
INVESTMENTS.

GOING back to the parcel of securities which
Miss Smith received from her lawyer, we will
presume that they represent safe investments of
various kinds.  It will be prudent, however, to
ask her banker to examine them to see if any,
in his judgment, might be sold with advantage
(either on account of doubtful character or ex-
ceptionally high price), and the money invested
elsewhere.  This business the bank will transact
for her; and in the matter of investment, in
addition to using her own common sense as to
the nature of the securities in which she should
place her money, she should seek the advice
of her banker, and rely very much upon his
opinion.

    The undertakings in which the public are in-
vited to invest their money are so numerous,
and the prospects of success so speciously
asserted, in good and bad alike, that it is necessary
to be extremely cautious in accepting any state-
ments of the kind without rigid examination and
proof of their being true and genuine.  Other-
wise the investment or purchase becomes a
speculation, and, more than likely, will only end
in disaster.

    The term "securities" applies both to the
concerns in which investments are made and to
the deeds and documents which represent the
investments.  Thus a mortgage or a mortgage
deed is a "security."  The Government Funds,
stocks and shares in all companies, bonds,
foreign and otherwise, Corporation Stocks, &c.,
are all termed "securities."  A convertible se-
curity is one which may be sold in the open
market, there being no restriction upon the
persons who may hold it.

    We will now endeavour to put before the
reader some account of the various "securities"
in which the public invest their money accord-
ing to individual choice, and which (with the
exception of mortgage on real property-land
or houses) may be bought and sold in the stock-
market through the agency of a banker or
broker.  Quotations of the market price of these
securities may be found in the Stock Exchange
list, which is published daily, and can be seen
at most bankers' offices.  Many of them are
also quoted in the daily newspapers.


      MORTGAGES.

    To invest money upon mortgage is to lend it
to a person who has house or landed property,
and desires to borrow money at a certain speci-
fied rate of interest.  The title deeds of the
property are deposited with the lender of the
money, together with a mortgage deed, which
describes, in full detail, the terms which may
have been agreed upon.

    The interest is usually made payable half-
yearly, and in the event of its payment not
being kept up, or the lender desiring the return
of his money, the principal sum can be called
up, the lender giving six months' notice of his
intention to do so.  If the borrower fails to pay,
a process of law has to be instituted, called a
foreclosure suit, which, if successful, transfers
the absolute ownership of the property into the
hands of the lender, so that he can receive the
rents as his own, or, if he pleases, sell the
property under legal authority.  In view of such
a contingency the value of the property should
considerably exceed the amount of the money
advanced, so as not only to cover the principal
sum, but also any arrears of interest, together
with law costs and expenses.  The usual pro-
portion of an advance on mortgage is two-thirds
of the ascertained value of the property, but
there might be circumstances which would war-
rant some variation in the proportion.

    The mortgage deed should be prepared by the
lender's own solicitor, who would see that the
property had a good title and use all the pre-
cautions necessary in transactions of this kind
to guard against fraud and loss; and in many
cases a professional valuation of the property
would be desirable, as a preliminary, before the
advance is entertained at all.

    Cases have been known where fraudulent per-
sons have borrowed money on mortgages of
property conveyed to themselves, but as to which
they were trustees only for others.  The lenders
or mortgagees have, in such cases, no alternative
but to give up the deeds and submit to the loss
of their money.

    Debentures are a form of mortgage applicable
to the raising of money by a corporation or
joint-stock company.

    The company mortgages its property for a
certain sum, too large for a single person to
advance, so it is divided up into even amounts
of, say, £100, the money being secured by de-
benture bonds, bearing interest at a fixed rate,
and being saleable in the stock markets.


      THE FUNDS.

    "What are the Funds?"  The writer has been
asked this question over and over again, though
it seems scarcely credible that, in these days,
any person of ordinary intelligence should be
ignorant of the meaning of the term.  Unfor-
tunately these things are not usually taught in
our schools.

    "The Funds," generally speaking, is the term
applied to the National Debt of Great Britain,
the money borrowed by the Government from
the people, chiefly for the purpose of carrying on
the great wars at the beginning of the present
century.  For these loans as much as 5 per cent.
has in former years been paid, but at present 2 3/4
is the rate payable on the great bulk of the debt.

    The year after the Battle of Waterloo the
National Debt amounted to nine hundred mil-
lions of money; at the present time it amounts
to about five hundred and seventy millions, and
is steadily diminishing.  This being the case,
there is of course no need of further borrowing
at present, but the loans outstanding - any por-
tion of them - may be bought and sold in the
market; that is, any lender may transfer all or
any part of his loan to some other person, and
as there are, daily, hundreds and thousands of
individuals wanting to buy or to sell, there is no
difficulty whatever, through the medium of the
Stock Exchange, in arranging so that a person
can obtain, or dispose of, the exact amount of
stock he desires.

    The chief method by which the National
Debt is reduced is described under the head of
Terminable Annuities.


      STOCKS AND SHARES.

    The stock of an institution or company is a
fixed sum forming the capital upon which the
concern is carried on, or it is the fixed sum bor-
rowed for certain purposes.  Any quantity of
stock may be purchased, but shares, which
represent the capital of a company, can only be
purchased in whole numbers.

    The nominal or face value of stocks and
shares by no means necessarily represents their
market value; in fact it is the exception that
they should do so.  The market price is con-
tinually fluctuating.  Thus, if the price of a
given stock is quoted in the lists and news-
papers at 110, it means that for every £100 of
such stock £10 additional has to be paid, and
the stock is said to be at 10 premium.  If, on
the other hand, it is quoted at 90, it means that
£100 of such stock can be purchased for £90,
and the stock is said to stand at a discount of
10.  The interest in either case is of course
calculated on the face value, that is, £100.

    This applies to all kinds of stock on the same
principle, the prices varying according to the
esteem in which they are held, or, in other
words, the credit they have with the moneyed
world.

    The shares of companies, which are only
purchasable in whole numbers, are of various
denominations, or face values; and again these
face values by no means represent the market
value.  Shares of £5 each (nominal value) may
be quoted as selling at 6, which would be 1 pre-
mium, but the dividend or interest would be
calculated on £5.  On the other hand, a £5
share quoted at 4 would be 1 discount, but the
dividend or interest would still be calculated on
the face value of £5.

    In very many cases the whole of the nominal
value of a share is not called up, _i.e._, is not re-
quired to be immediately paid.  Thus a £5 share
may have only £3 paid upon it, leaving a lia-
bility of £2, which the holder may at any time
be called upon to pay, whether convenient or
not.  This should always be borne in mind when
purchasing shares of any kind, as the neglect of
this precaution has often involved holders in
serious difficulties, from being called upon to
pay up when least able to do so.

    The dividend on shares of this kind is calcu-
lated only on the amount paid up.


      DIVIDENDS.

    A dividend is the sum apportioned periodi-
cally, in the shape of profit or interest, to holders
of stocks and shares.  It may be a fixed sum
according to the rate of interest, as in the case
of the Funds, Colonial Stocks, &c., or a varying
sum according to the profits made, as in the case
of railway shares and those of other companies.
The dividends on the Funds and some Colonial
Stocks are paid quarterly, at the beginning of
January, April, July, and October.  A month
prior to the date of payment the stocks are
marked "ex-div.," meaning that any purchase
effected after the 1st December, 1st March, 1st
June, and 1st September, would not carry that
quarter's dividend, as it is held in favour of the
person whose name is registered on the books
on those dates.

    The interest dependent upon the shares or
stocks of companies is usually paid half-yearly,
after the periodical meeting, when the accounts
are presented and the profits declared.  A cer-
tain date is fixed when these shares and stocks
are saleable "ex-div." or "ex-interest."



CHAPTER V.
BRITISH GOVERNMENT FUNDS.

THE safest of all investments are those repre-
sented by the National Debt of this country, but
the rate of interest or annual income derivable
therefrom is small.  The debt is nominally
divided into three parts:- The Funded Debt, the
Unfunded Debt, Terminable Annuities.

    The Funded Debt (1) is permanent; it is repre-
sented by Consols yielding interest at the rate
of 2 1/2 per cent. per annum, or £2 10s. a year for
every £100 of stock.  The Government is not
under obligation to redeem the principal at any
fixed time, but power is reserved to pay off the
loan at _par_ (that is at the rate of £100 for every
£100 stock, irrespective of its then selling value)
in the year 1905.  Another debt of compara-
tively small amount, bearing interest at 2 3/4 per
cent. per annum, may also be paid off at _par_
in 1905.

    The great bulk of the National Debt, amount-
ing to over five hundred millions sterling, is,
represented by what, in Stock Exchange _par-
lance_, is known as Goschen's Consols, so called
from the Chancellor of the Exchequer of that
name, to whom is due the conversion of the old
"three per cents.," in the year 1888.

    This stock bears interest at the rate of 2 3/4
per cent. per annum until the year 1903; from
that date it is to be reduced to 2 1/2 per cent. until
1923, when the principal may be paid off at _par_.

    There is yet another fixed debt of about forty
millions sterling called "Local Loans Stock,"
being money borrowed by the Government for the
purpose of making advances to Corporations for
local works.  This stock may be redeemed at
_par_ in 1912.

    The Unfunded Debt (2) consists of loans to
the Government for temporary purposes.  These
loans are for various periods varying from seven
days to as many years.  They are represented
by Exchequer Bills, Exchequer Bonds and Trea-
sury Bills, which bear interest, according to the
value of money at the time they are issued, from
day to day.  Due notice is given when a loan is
to be paid off or renewed, and interest ceases on
the day named for redemption.


      TERMINABLE ANNUITIES.

    Terminable Annuities (3) may be regarded as
a "Sinking Fund," or means by which a con-
siderable portion of the National Debt is paid
off every year and "The Funds" proportionately
reduced.

    Thus the Government is empowered to give
an annuity for a certain number of years in ex-
change for permanent stock in the Funds.  For
instance, a holder of £1,000 2 3/4 per cent. stock is
receiving £27 10s. a year in the shape of interest.
The Government offers to pay double the amount
of interest or £55, if the £1,000 stock is trans-
ferred to them, and to continue this £55 a year
for twenty years and no longer.

    At the expiration of that period the interest
ceases and the principal sum of £1,000 is struck
off the National Debt, which is in consequence
reduced by that sum.


    LOANS - THE INTEREST ON WHICH IS GUARAN-
       TEED BY THE BRITISH GOVERNMENT.

    These consist of loans to the Government of
Canada for railway purposes, upon which 4 per
cent. per annum is guaranteed.  Also loans to
the Colonies of Jamaica at 4 per cent. and Mauri-
tius at 3 per cent., to the Egyptian Government
at 3 per cent. and to the Turkish Government at
4 per cent.; in this latter case the French
Government joins in the guarantee.

    These are all perfectly safe investments, so far
as the interest or income derived is concerned,
but there appears to be no arrangement for the
redemption of the loans.

    The large loans to the Government of India at
3 1/2 and 3 per cent., repayable in 1931 and 1948,
are guaranteed by the Secretary of State for
India, practically the British Government.

    Any amount may be invested in the above
stocks and annuities through the medium of
either a banker through his broker, or by a
broker direct.  The broker's charge for trans-
acting in Consols is 25. 6d. (1/8) per cent. on the
amount invested, but provincial bankers make a
further small charge for guaranteeing the busi-
ness, that is, they protect their customer from
any loss that may arise owing to the failure of
the broker to carry out the contract.

    The dividends, interest, or annuity derivable
from these investments, may be received by
personal application of the holder at the Bank
of England on certain fixed days, or on signing
a printed form furnished on application by the
Bank of England, per post, they will send from
time to time without further notice a warrant or
order for the amount due, which warrant or order
may be paid into a bank account, or, on a proper
introduction, cashed at any bank or post office.
The simplest plan, however, may be to give your
banker a Power of Attorney to receive the divi-
dends from time to time and place the amount
to the credit of your account.

    Income tax is deducted from all dividends;
but if a person is not liable to such tax, by
reason of the total income coming within the
Exemption Clause, the amount can be recovered
through a surveyor of taxes, as to which the
banker would give all the information required (*).

(*) Such information may also be found in detail in a little handy
book, "Income Tax, and how to get it Refunded."  1s. 6d. Pub-
lished by Messrs. Effingham, Wilson & Co.

    The stock of the Bank of England, which may
be purchased in any amount, the same as
Consols, is a favourite investment with some,
but the price is so high that the income to be
derived therefrom is no more, and sometimes
even less, than from the Funds.


    AUTOMATIC RE-INVESTMENT OF DIVIDENDS.

    Holders of stock in the Funds who are not
desirous of receiving their dividends, but prefer
to have them added half-yearly to the capital
sum without further action on their part, are
granted facilities by which this may be done
automatically, on application to the Bank of
England.  The instructions apply to amounts of
stock of less than £1,000 only.  These facilities
are also extended to holders of Metropolitan
Consolidated Stocks, and to the India 3 per
cent. and 3 1/2 per cent. stocks.



CHAPTER VI.
GOVERNMENT ANNUITIES.

THE Commissioners for the Reduction of the
National Debt, under the authority of Parlia-
ment, grant annuities either on single lives, or
on two lives and the life of the survivor, or on
the joint continuance of two lives, such annui-
ties to commence immediately.  In the case of
single lives, the annuity _may_ be made to com-
mence at a future period, and the consideration
for it may be paid by the purchaser annually in
sums of money not less than £5, but in case of
default in keeping up the annual instalments,
all the annual payments previously made are
forfeited, and all right to the annuity is ex-
tinguished.

    Payment for an annuity is made by the
transfer of 2 1/2 per cent. Consols, or money of equi-
valent value, at the price of the stock on the day
of the transaction.

    The tables (see p.44) show the annuity which
£100 of 2 1/2 per cent. stock will purchase, to con-
tinue during the life of a nominee at the re-
spective ages and according to the prices of 2 1/2
per cent. stock therein stated.  It will be seen
that in the case of money being paid for the
purchase of the annuity, the higher the price of
Consols the dearer will be the purchase.  Thus,
a female buying an annuity at the age of fifty,
amounting to £5 19s. 8d. per annum, and Consols
being at _par_, or 100, would, if she paid for it
_in money_, have to expend £100.  But suppose
Consols to be at 108 (as they are at present) she
would have to pay £108 for the same annuity.

    Tables relating to annuities on joint lives and
to deferred annuities may be obtained at the
National Debt Office, 19, Old Jewry, London, by
application direct, or through a bank.

    No person under the age of fifteen can be ap-
pointed the nominee for any life annuity.

    Life annuities are payable quarterly at the
National Debt Office, in the form of a warrant
on the Bank of England, either on personal
demand, or through a bank by Power of Attor-
ney; or they can be transmitted to the pro-
prietor by post.  The fixed dates are the fifth of
January, the fifth of April, the fifth of July, and
the fifth of October in each year.

    The first quarterly payment of annuities will
become due as follows, namely:  On annuities
purchased between the first of December and
the last day of February, on the fifth of April
next following the day of purchase.

    Between the first of March and the last day of
May, on the fifth of July next following.

    Between the first of June and the last day of
August, on the fifth of October next following.

    Between the first of September and the last
day of November, on the fifth of January next
following.

    No sum less than £100 of stock or money can
be received in the first instance, but it may be
added to subsequently in sums of not less than
£20.

    Upon the expiration of any life annuity a
sum equal to one-fourth of the annuity (over and
above all quarterly arrears thereof) will be paid
to the representatives of the annuitant, if
claimed within two years after such expiration.

    Very heavy penalties attach to persons
making false statements or declarations in
respect of the purchase of an annuity.


      Per Acts 10 Geo. IV., cap. 24, and 51 and 52 Vic. cap 15.
                    -------------------------
TABLE showing the ANNUITY, continuing during the _Life_ of any person of the following Ages,
      which £100 STOCK in the 2 1/2 PER CENT. BANK ANNUITIES will purchase.

---------------------------------------------------------------------------------------------
|       ||   When the price of   ||   When the price of   ||   When the price of   ||       |
|       ||   £100 of 2 1/2 per   ||   £100 of 2 1/2 per   ||   £100 of 2 1/2 per   ||       |
|  Age  || cent. Stock exclusive || cent. Stock exclusive || cent. Stock exclusive ||  Age  |
|of the ||  of accrued dividend  ||  of accrued dividend  ||  of accrued dividend  ||of the |
|Nominee||     lies between      ||     lies between      ||     lies between      ||Nominee|
|       ||£94 15 9 and £95 13 11.||£95 13 11 and £96 12 5.||£96 12 5 and £97 11 3. ||       |
|       ||-----------------------||-----------------------||-----------------------||       |
|       ||   Male.   |  Female.  ||   Male.   |  Female.  ||   Male.   |  Female.  ||       |
|-------||-----------|-----------||-----------|-----------||-----------|-----------||-------|
|       ||   £ s. d. |  £ s. d.  ||   £ s. d. |  £ s. d.  ||   £ s. d. |  £ s. d.  ||       |
|   15  ||   4  1  2 |  3 15  3  ||   4  1  7 |  3 15  7  ||   4  2  0 |  3 15 11  ||  15   |
|   16  ||   4  1 10 |  3 15  9  ||   4  2  3 |  3 16  1  ||   4  2  8 |  3 16  6  ||  16   |
|   17  ||   4  2  7 |  3 16  4  ||   4  3  0 |  3 16  8  ||   4  3  5 |  3 17  1  ||  17   |
|   18  ||   4  3  4 |  3 16 11  ||   4  3  9 |  3 17  3  ||   4  4  3 |  3 17  8  ||  18   |
|   19  ||   4  4  2 |  3 17  6  ||   4  4  7 |  3 17 11  ||   4  5  0 |  3 18  3  ||  19   |
|   20  ||   4  4 11 |  3 18  2  ||   4  5  5 |  3 18  6  ||   4  5 10 |  3 18 11  ||  20   |
|   21  ||   4  5  9 |  3 18  9  ||   4  6  2 |  3 19  2  ||   4  6  8 |  3 19  7  ||  21   |
|   22  ||   4  6  7 |  3 19  5  ||   4  7  1 |  3 19 10  ||   4  7  6 |  4  0  3  ||  22   |
|   23  ||   4  7  6 |  4  0  1  ||   4  7 11 |  4  0  6  ||   4  8  5 |  4  0 11  ||  23   |
|   24  ||   4  8  4 |  4  0 10  ||   4  8 10 |  4  1  3  ||   4  9  4 |  4  1  8  ||  24   |
|   25  ||   4  9  3 |  4  1  6  ||   4  9  9 |  4  2  0  ||   4 10  3 |  4  2  5  ||  25   |
|   26  ||   4 10  3 |  4  2  4  ||   4 10  9 |  4  2  9  ||   4 11  3 |  4  3  2  ||  26   |
|   27  ||   4 11  3 |  4  3  1  ||   4 11  9 |  4  3  6  ||   4 12  3 |  4  4  0  ||  27   |
|   28  ||   4 12  3 |  4  3 11  ||   4 12  9 |  4  4  4  ||   4 13  3 |  4  4 10  ||  28   |
|   29  ||   4 13  3 |  4  4  9  ||   4 13 10 |  4  5  2  ||   4 14  4 |  4  5  8  ||  29   |
|   30  ||   4 14  4 |  4  5  7  ||   4 14 11 |  4  6  1  ||   4 15  5 |  4  6  7  ||  30   |
|   31  ||   4 15  6 |  4  6  6  ||   4 16  0 |  4  7  0  ||   4 16  7 |  4  7  6  ||  31   |
|   32  ||   4 16  7 |  4  7  6  ||   4 17  2 |  4  8  0  ||   4 17  9 |  4  8  6  ||  32   |
|   33  ||   4 17 10 |  4  8  6  ||   4 18  5 |  4  9  0  ||   4 19  0 |  4  9  6  ||  33   |
|   34  ||   4 19  0 |  4  9  6  ||   4 19  7 |  4 10  0  ||   5  0  3 |  4 10  6  ||  34   |
|   35  ||   5  0  4 |  4 10  7  ||   5  0 11 |  4 11  1  ||   5  1  6 |  4 11  8  ||  35   |
|   36  ||   5  1  8 |  4 11  9  ||   5  2  3 |  4 12  3  ||   5  2 11 |  4 12  9  ||  36   |
|   37  ||   5  3  0 |  4 12 11  ||   5  3  8 |  4 13  5  ||   5  4  3 |  4 14  0  ||  37   |
|   38  ||   5  4  5 |  4 14  2  ||   5  5  1 |  4 14  8  ||   5  5  9 |  4 15  3  ||  38   |
|   39  ||   5  5 11 |  4 15  5  ||   5  6  7 |  4 16  0  ||   5  7  3 |  4 16  7  ||  39   |
|   40  ||   5  7  6 |  4 16 10  ||   5  8  2 |  4 17  5  ||   5  8 10 |  4 18  0  ||  40   |
|   41  ||   5  9  1 |  4 18  3  ||   5  9  9 |  4 18 10  ||   5 10  6 |  4 19  5  ||  41   |
|   42  ||   5 10  9 |  4 19  9  ||   5 11  6 |  5  0  4  ||   5 12  2 |  5  1  0  ||  42   |
|   43  ||   5 12  6 |  5  1  4  ||   5 13  3 |  5  2  0  ||   5 14  0 |  5  2  7  ||  43   |
|   44  ||   5 14  5 |  5  3  0  ||   5 15  1 |  5  3  8  ||   5 15 11 |  5  4  4  ||  44   |
|   45  ||   5 16  4 |  5  4 10  ||   5 17  1 |  5  5  6  ||   5 17 10 |  5  6  2  ||  45   |
|   46  ||   5 18  4 |  5  6  9  ||   5 19  1 |  5  7  5  ||   5 19 11 |  5  8  2  ||  46   |
|   47  ||   6  0  6 |  5  8  9  ||   6  1  3 |  5  9  6  ||   6  2  1 |  5 10  2  ||  47   |
|   48  ||   6  2  9 |  5 10 11  ||   6  3  7 |  5 11  8  ||   6  4  5 |  5 12  5  ||  48   |
|   49  ||   6  5  2 |  5 13  3  ||   6  6  0 |  5 14  0  ||   6  6 11 |  5 14  9  ||  49   |
|   50  ||   6  7  8 |  5 15  7  ||   6  8  7 |  5 16  5  ||   6  9  5 |  5 17  2  ||  50   |
|   51  ||   6 10  5 |  5 18  1  ||   6 11  3 |  5 18 11  ||   6 12  2 |  5 19  9  ||  51   |
|   52  ||   6 13  3 |  6  0  9  ||   6 14  2 |  6  1  7  ||   6 15  2 |  6  2  5  ||  52   |
|   53  ||   6 16  4 |  6  3  7  ||   6 17  4 |  6  4  5  ||   6 18  4 |  6  5  4  ||  53   |
|   54  ||   6 19  8 |  6  6  7  ||   7  0  8 |  6  7  6  ||   7  1  8 |  6  8  5  ||  54   |
|   55  ||   7  3  2 |  6  9 10  ||   7  4  3 |  6 10  8  ||   7  5  3 |  6 11  8  ||  55   |
|   56  ||   7  7  0 |  6 13  3  ||   7  8  1 |  6 14  2  ||   7  9  2 |  6 15  2  ||  56   |
|   57  ||   7 11  2 |  6 17  0  ||   7 12  3 |  6 17 11  ||   7 13  5 |  6 18 11  ||  57   |
|   58  ||   7 15  8 |  7  0 11  ||   7 16 10 |  7  1 11  ||   7 18  0 |  7  2 11  ||  58   |
|   59  ||   8  0  7 |  7  5  1  ||   8  1  9 |  7  6  2  ||   8  3  0 |  7  7  3  ||  59   |
|   60  ||   8  5 10 |  7  9  6  ||   8  7  0 |  7 10  8  ||   8  8  4 |  7 11  9  ||  60   |
|   61  ||   8 11  3 |  7 14  4  ||   8 12  7 |  7 15  6  ||   8 13 11 |  7 16  8  ||  61   |
|   62  ||   8 16 11 |  7 19  5  ||   8 18  3 |  8  0  7  ||   8 19  8 |  8  1 10  ||  62   |
|   63  ||   9  3  0 |  8  4 10  ||   9  4  5 |  8  6  1  ||   9  5 10 |  8  7  4  ||  63   |
|   64  ||   9  9  5 |  8 10  8  ||   9 10 11 |  8 12  0  ||   9 12  5 |  8 13  4  ||  64   |
|   65  ||   9 16  3 |  8 17  2  ||   9 17 10 |  8 18  6  ||   9 19  5 |  8 19 11  ||  65   |
|   66  ||  10  3  6 |  9  4  1  ||  10  5  1 |  9  5  6  ||  10  6  8 |  9  7  0  ||  66   |
|   67  ||  10 11  0 |  9 11  8  ||  10 12  8 |  9 13  2  ||  10 14  5 |  9 14  8  ||  67   |
|   68  ||  10 19  0 |  9 19  9  ||  11  0  9 | 10  1  4  ||  11  2  7 | 10  2 11  ||  68   |
|   69  ||  11  7  8 | 10  8  4  ||  11  9  6 | 10 10  0  ||  11 11  4 | 10 11  8  ||  69   |
|   70  ||  11 17  0 | 10 17  5  ||  11 18 11 | 10 19  1  ||  12  0 11 | 11  0 11  ||  70   |
|   71  ||  12  6 11 | 11  6  8  ||  12  9  0 | 11  8  6  ||  12 11  0 | 11 10  5  ||  71   |
|   72  ||  12 17  8 | 11 16  5  ||  12 19 10 | 11 18  4  ||  13  2  0 | 12  0  4  ||  72   |
|   73  ||  13  9  0 | 12  6  9  ||  13 11  3 | 12  8  9  ||  13 13  6 | 12 10 10  ||  73   |
|   74  ||  14  0  9 | 12 17  8  ||  14  3  1 | 12 19 10  ||  14  5  6 | 13  2  0  ||  74   |
|   75  ||  14 13  0 | 13  9  4  ||  14 15  6 | 13 11  7  ||  14 18  0 | 13 13 10  ||  75   |
|   76  ||  15  6  2 | 14  1  9  ||  15  8  9 | 14  4  1  ||  15 11  5 | 14  6  6  ||  76   |
|   77  ||  15 19  8 | 14 15  0  ||  16  2  5 | 14 17  6  ||  16  5  2 | 15  0  0  ||  77   |
|   78  ||  16 14  0 | 15  9  0  ||  16 16 10 | 15 11  8  ||  16 19  9 | 15 14  4  ||  78   |
|   79  ||  17  9  3 | 16  4  0  ||  17 12  3 | 16  6 10  ||  17 15  4 | 16  9  7  ||  79   |
|   80  ||  18  5  4 | 16 19 10  ||  18  8  6 | 17  2  9  ||  18 11  9 | 17  5  9  ||  80   |
---------------------------------------------------------------------------------------------


      Per Acts 10 Geo. IV., cap. 24, and 51 and 52 Vic. cap 15.
                    -------------------------
TABLE showing the ANNUITY, continuing during the _Life_ of any person of the following Ages,
      which £100 STOCK in the 2 1/2 PER CENT. BANK ANNUITIES will purchase.

---------------------------------------------------------------------------------------------
|       ||   When the price of   ||   When the price of   ||   When the price of   ||       |
|       ||   £100 of 2 1/2 per   ||   £100 of 2 1/2 per   ||   £100 of 2 1/2 per   ||       |
|  Age  || cent. Stock exclusive || cent. Stock exclusive || cent. Stock exclusive ||  Age  |
|of the ||  of accrued dividend  ||  of accrued dividend  ||  of accrued dividend  ||of the |
|Nominee||     lies between      ||     lies between      ||       is above        ||Nominee|
|       ||£97 11 3 and £98 10 6. ||£98 10 6 and £99 10 1. ||       £99 10 1.       ||       |
|       ||-----------------------||-----------------------||-----------------------||       |
|       ||   Male.   |  Female.  ||   Male.   |  Female.  ||   Male.   |  Female.  ||       |
|-------||-----------|-----------||-----------|-----------||-----------|-----------||-------|
|       ||   £ s. d. |  £ s. d.  ||   £ s. d. |  £ s. d.  ||   £ s. d. |  £ s. d.  ||       |
|   15  ||   4  2  5 |  3 16  4  ||   4  2 10 |  3 16  8  ||   4  3  3 |  3 17  0  ||  15   |
|   16  ||   4  3  1 |  3 16 10  ||   4  3  7 |  3 17  3  ||   4  4  0 |  3 17  7  ||  16   |
|   17  ||   4  3 11 |  3 17  5  ||   4  4  4 |  3 17 10  ||   4  4  9 |  3 18  3  ||  17   |
|   18  ||   4  4  8 |  3 18  0  ||   4  5  1 |  3 18  5  ||   4  5  7 |  3 18 10  ||  18   |
|   19  ||   4  5  6 |  3 18  8  ||   4  5 11 |  3 19  1  ||   4  6  5 |  3 19  6  ||  19   |
|   20  ||   4  6  3 |  3 19  4  ||   4  6  9 |  3 19  8  ||   4  7  3 |  4  0  1  ||  20   |
|   21  ||   4  7  2 |  4  0  0  ||   4  7  7 |  4  0  5  ||   4  8  1 |  4  0 10  ||  21   |
|   22  ||   4  8  0 |  4  0  8  ||   4  8  6 |  4  1  1  ||   4  9  0 |  4  1  6  ||  22   |
|   23  ||   4  8 11 |  4  1  4  ||   4  9  5 |  4  1  9  ||   4  9 11 |  4  2  3  ||  23   |
|   24  ||   4  9 10 |  4  2  1  ||   4 10  4 |  4  2  6  ||   4 10 10 |  4  3  0  ||  24   |
|   25  ||   4 10  9 |  4  2 10  ||   4 11  4 |  4  3  3  ||   4 11 10 |  4  3  9  ||  25   |
|   26  ||   4 11  9 |  4  3  7  ||   4 12  3 |  4  4  1  ||   4 12 10 |  4  4  6  ||  26   |
|   27  ||   4 12  9 |  4  4  3  ||   4 13  4 |  4  4 11  ||   4 13 10 |  4  5  4  ||  27   |
|   28  ||   4 13 10 |  4  5  3  ||   4 14  4 |  4  5  9  ||   4 14 11 |  4  6  3  ||  28   |
|   29  ||   4 14 11 |  4  6  2  ||   4 15  6 |  4  6  7  ||   4 16  0 |  4  7  1  ||  29   |
|   30  ||   4 16  0 |  4  7  0  ||   4 16  7 |  4  7  6  ||   4 17  2 |  4  8  0  ||  30   |
|   31  ||   4 17  2 |  4  8  0  ||   4 17  9 |  4  8  6  ||   4 18  4 |  4  9  0  ||  31   |
|   32  ||   4 18  4 |  4  9  0  ||   4 18 11 |  4  9  6  ||   4 19  6 |  4 10  0  ||  32   |
|   33  ||   4 19  7 |  4 10  0  ||   5  0  2 |  4 10  6  ||   5  0 10 |  4 11  1  ||  33   |
|   34  ||   5  0 10 |  4 11  1  ||   5  1  6 |  4 11  7  ||   5  2  1 |  4 12  2  ||  34   |
|   35  ||   5  2  2 |  4 12  2  ||   5  2 10 |  4 12  9  ||   5  3  5 |  4 13  4  ||  35   |
|   36  ||   5  3  6 |  4 13  4  ||   5  4  2 |  4 13 11  ||   5  4 10 |  4 14  6  ||  36   |
|   37  ||   5  4 11 |  4 14  7  ||   5  5  7 |  4 15  2  ||   5  6  4 |  4 15  9  ||  37   |
|   38  ||   5  6  5 |  4 15 10  ||   5  7  1 |  4 16  5  ||   5  7 10 |  4 17  0  ||  38   |
|   39  ||   5  7 11 |  4 17  2  ||   5  8  8 |  4 17  9  ||   5_19_ 4 |  4 18  5  ||  39   |
|   40  ||   5  9  6 |  4 18  7  ||   5 10  3 |  4 19  2  ||   5 11  0 |  4 19 10  ||  40   |
|   41  ||   5 11  3 |  5  0  1  ||   5 11 11 |  5  0  8  ||   5 12  8 |  5  1  4  ||  41   |
|   42  ||   5 12 11 |  5  1  8  ||   5 13  8 |  5  2  3  ||   5 14  6 |  5  3  0  ||  42   |
|   43  ||   5 14  9 |  5  3  3  ||   5 15  6 |  5  4  0  ||   5 16  4 |  5  4  8  ||  43   |
|   44  ||   5 16  8 |  5  5  0  ||   5 17  6 |  5  5  9  ||   5 18  3 |  5  6  5  ||  44   |
|   45  ||   5 18  8 |  5  6 11  ||   5_11_ 6 |  5  7  7  ||   6  0  4 |  5  8  4  ||  45   |
|   46  ||   6  0  9 |  5  8 10  ||   6  1  7 |  5  9  7  ||   6  2  5 |  5 10  4  ||  46   |
|   47  ||   6  3  0 |  5 10 11  ||   6  3 10 |  5 11  8  ||   6  4  8 |  5 12  6  ||  47   |
|   48  ||   6  5  3 |  5 13  2  ||   6  6  2 |  5 13 11  ||   6  7  1 |  5 14  9  ||  48   |
|   49  ||   6  7  9 |  5 15  6  ||   6  8  8 |  5 16  4  ||   6  9  7 |  5 17  1  ||  49   |
|   50  ||   6 10  4 |  5 18  0  ||   6 11  4 |  5 18 10  ||   6 12  3 |  5 19  8  ||  50   |
|   51  ||   6 13  2 |  6 _6_ 6  ||   6 14  1 |  6  1  5  ||   6 15  1 |  6  2  3  ||  51   |
|   52  ||   6 16  1 |  6  3  3  ||   6 17  1 |  6  4  2  ||   6 18  1 |  6  5  0  ||  52   |
|   53  ||   6 19  4 |  6  6  2  ||   7  0  4 |  6  7  1  ||   7  1  5 |  6  8  0  ||  53   |
|   54  ||   7  2  8 |  6  9  4  ||   7  3  9 |  6 10  3  ||   7  4 10 |  6 11  2  ||  54   |
|   55  ||   7  6  4 |  6 12  7  ||   7  7  5 |  6 13  6  ||   7  8  7 |  6 14  6  ||  55   |
|   56  ||   7 10  3 |  6 16  2  ||   7 11  5 |  6 17  2  ||   7 12  7 |  6 18  2  ||  56   |
|   57  ||   7 14  6 |  7  0  0  ||   7 15  9 |  7  1  0  ||   7 16 11 |  7  2  1  ||  57   |
|   58  ||   7 19  2 |  7  4  0  ||   8  0  5 |  7  5  1  ||   8  1  8 |  7  6  2  ||  58   |
|   59  ||   8  4  3 |  7  8  4  ||   8  5  6 |  7  9  6  ||   8  6 10 |  7 10  7  ||  59   |
|   60  ||   8  9  7 |  7 12 11  ||   8 10 11 |  7 14  1  ||   8 12  4 |  7 15  3  ||  60   |
|   61  ||   8 15  3 |  7 17 10  ||   8 16  7 |  7 19  1  ||   8 18  0 |  8  0  4  ||  61   |
|   62  ||   9  1  0 |  8  3  1  ||   9  2  6 |  8  4  4  ||   9  4  0 |  8  5  8  ||  62   |
|   63  ||   9  7  3 |  8  8  8  ||   9  8  9 |  8 10  0  ||   9 10  4 |  8 11  4  ||  63   |
|   64  ||   9 13 11 |  8 14  8  ||   9 15  6 |  8 16  1  ||   9 17  1 |  8 17  6  ||  64   |
|   65  ||  10  1  0 |  9  1  4  ||  10  2  7 |  9  2  9  ||  10  4  4 |  9  4  3  ||  65   |
|   66  ||  10  8  5 |  9  8  6  ||  10 10  1 |  9 10  0  ||  10 11 10 |  9 11  6  ||  66   |
|   67  ||  10 16  2 |  9 16  3  ||  10 17 11 |  9 17 10  ||  10 19  9 |  9 19  6  ||  67   |
|   68  ||  11  4  5 | 10  4  7  ||  11  6  3 | 10  6  3  ||  11  8  2 | 10  7 11  ||  68   |
|   69  ||  11 13  3 | 10 13  5  ||  11 15  3 | 10 15  2  ||  11 17  2 | 10 17  0  ||  69   |
|   70  ||  12  2 11 | 11  2  9  ||  12  4 11 | 11  4  7  ||  12  7  0 | 11  6  6  ||  70   |
|   71  ||  12 13  2 | 11 12  4  ||  12 15  4 | 11 14  3  ||  12 17  6 | 11 16  3  ||  71   |
|   72  ||  13  4  2 | 12  2  4  ||  13  6  5 | 12  4  5  ||  13  8  9 | 12  6  6  ||  72   |
|   73  ||  13 15 10 | 12 13  0  ||  13 18  2 | 12 15  1  ||  14  0  7 | 12 17  4  ||  73   |
|   74  ||  14  7 11 | 13  4  2  ||  14 10  5 | 13  6  5  ||  14 13  0 | 13  8  9  ||  74   |
|   75  ||  15  0  7 | 13 16  2  ||  15  3  2 | 13 18  7  ||  15  5 10 | 14  1  0  ||  75   |
|   76  ||  15 14  1 | 14  8 11  ||  15 16 10 | 14 11  6  ||  15 19  7 | 14 14  0  ||  76   |
|   77  ||  16  8  0 | 15  2  7  || _17_10 11 | 15  5  3  ||  16 13 10 | 15  7 11  ||  77   |
|   78  ||  17  2  8 | 15 17  0  ||  17  5  9 | 15 19 10  ||  17  8 10 | 16  2  8  ||  78   |
|   79  ||  17 18  5 | 16 12  6  ||  18  1  8 | 16 15  5  ||  18  4 10 | 16 18  5  ||  79   |
|   80  ||  18 15  0 | 17  8 10  ||  18 18  4 | 17 11 11  ||  19  1  9 | 17 15  0  ||  80   |
---------------------------------------------------------------------------------------------


    INSURANCE OFFICE ANNUITIES.

    Some of the Insurance Offices grant imme-
diate annuities.  Of course, in purchasing a life
annuity from an Insurance Office, it is necessary
to ensure as far as is humanly possible that an
annuity will be paid for life.  This not only de-
pends upon the present solvency of the company,
but upon that solvency being maintained.  There
is not much difficulty, however, in selecting
from amongst the numerous well-established
companies, with proper advice, one that will
answer every requirement.  The following table
shows the amount of an annuity granted by the
undermentioned companies for every £100 paid.
The age last birthday is that upon which the pay-
ment is based, and the initial letters M. and F.
indicate the rates for male and female lives.
The ages quoted range from 50 to 70 years, but
the terms for purchasing an annuity at any age
can be obtained at the Insurance Office.

    By a few companies, distinguished thus (!),
the proportionate amount of annuity is payable
to the day of death.


-----------------------------------------------------------------------------------------------------
|                       | |        |        |        |        |        |        |        |        | |
|        Office         | | Age 50 | Age 52 | Age 55 | Age 58 | Age 60 | Age 62 | Age 65 | Age 70 | |
|                       | |        |        |        |        |        |        |        |        | |
|-----------------------|-|--------|--------|--------|--------|--------|--------|--------|--------|-|
|                       | | £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| |
|                       | |        |        |        |        |        |        |        |        | |
|!British Empire Mutual |M| 7  4  6| 7 10  2| 8  0  2| 8 12 10| 9  3  2| 9 14  6|10 14  4|12 16  4|M|
|                       |F| 6 12  0| 6 17  0| 7  6  2| 7 17  4| 8  6  2| 8 16  2| 9 14  4|11 15 10|F|
|                       | |        |        |        |        |        |        |        |        | |
| Caledonian            |M| 7  6  2| 7 12  0| 8  2  8| 8 16  0| 9  7  0| 9 19  2|11  0  0|13  5 10|M|
|                       |F| 6 11  8| 6 17  0| 7  6  2| 7 17 11| 8  7  0| 8 15  7| 9 13 10|11 14 11|F|
|                       | |        |        |        |        |        |        |        |        | |
| City of Glasgow       |M| 7  5  6| 7 11  6| 8  2  0| 8 15  6| 9  6  6| 9 18  6|10 19  0|13  4  6|M|
|                       |F| 6 12  6| 6 17  6| 7  7  5| 7 17  9| 8  6  7| 8 16  0| 9 14 10|11 14  7|F|
|                       | |        |        |        |        |        |        |        |        | |
| Eagle                 |M| 7  5 10| 7 11  6| 8  1 10| 8 15  0| 9  5  8| 9 17  6|10 18  0|13  1  4|M|
|                       |F| 6 12 10| 6 18  2| 7  7  6| 7 19  2| 8  8  4| 8 18  8| 9 17  6|12  0  4|F|
|                       | |        |        |        |        |        |        |        |        | |
| Economic              |M| 7  5  6| 7 11  6| 8  1 10| 8 15  4| 9  6  4| 9 18  4|10 19  8|13  4 10|M|
|                       |F| 6 12  4| 6 17  8| 7  7  4| 7 19  2| 8  8  4| 8 19  0| 9 18  4|12  2  8|F|
|                       | |        |        |        |        |        |        |        |        | |
| Edinburgh             |M| 7  4  6| 7 10  6| 8  1  4| 8 14 10| 9  6  2| 9 18  6|11  0  0|12 19  6|M|
|                       |F| 6 11  2| 6 16  8| 7  6  6| 7 18  6| 8  8  0| 8 18 10| 9 18  6|11 17  8|F|
|                       | |        |        |        |        |        |        |        |        | |
|!English and Scottish  |M| 7 10  0| 7 16  8| 8  6 10| 8 19  0| 9 10  2|10  2  8|11  3  2|13  6  4|M|
|  Law                  |F| 6 12  4| 6 17  4| 7  7  4| 7 19  4| 8  8  6| 8 18 10| 9 18  4|11 19  0|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Friends' Provident    |M| 6 15  4| 7  0 10| 7 10  4| 8  1  8| 8 10  7| 9  0  9| 9 18 10|11 18  6|M|
|                       |F| 6  5  8| 6 10  9| 6 19 11| 7 11  1| 7 19 11| 8  9 11| 9  7  1|11  4  7|F|
|                       | |        |        |        |        |        |        |        |        | |
| General               |M| 7  4  8| 7 11 10| 8  3 10| 8 17  4| 9  7  2| 9 18  8|11  2  0|13  8  6|M|
|                       |F| 6 13  4| 6 18 10| 7  9  2| 8  1  2| 8 10  0| 8 19  6| 9 15  8|11 10 10|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Gresham               | | 6 18  5| 7  4  0| 7 14  1| 8  6  7| 8 16  8| 9  7 11|10  8  1|12 12 11| |
|                       | |        |        |        |        |        |        |        |        | |
|!Guardian              |M| 6 19  4| 7  5  4| 7 15  8| 8  9  0| 8 19  8| 9 11  6|10  1  2|12 15 10|M|
|                       |F| 6  6  6| 6 11 10| 7  1  6| 7 13  2| 8  2  4| 8 12 10| 9 11  8|11 14  8|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Hand-in-Hand          |M| 7  3  4| 7  9  4| 8  0  0| 8 13  4| 9  4  2| 9 16  2|10 17  0|13  1  4|M|
|                       |F| 6 10  2| 6 15  8| 7  5  4| 7 17  2| 8  6  6| 8 17  0| 9 16  2|11 19 10|F|
|                       | |        |        |        |        |        |        |        |        | |
| Law Union and Crown   |M| 7  2  8| 7  8  4| 7 18 10| 8 12  0| 9  2  8| 9 14  8|10 15  6|13  0  2|M|
|                       |F| 6  9 10| 6 15  2| 7  4  8| 7 15 10| 8  4 10| 8 15  2| 9 14  2|11 17  6|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Legal and General     |M| 7  2  0| 7  7  6| 8 18  6| 8 13  8| 9  5  2| 9 17  6|10 17 10|   --   |M|
|                       |F| 6  7 10| 6 13  0| 7  2  0| 7 13  0| 8  1 10| 8 12  2| 9  6  8|   --   |F|
|                       | |        |        |        |        |        |        |        |        | |
| Life Association of   |M| 7  6  0| 7 12  0| 8  2  8| 8 16  0| 9  7  0| 9 19  2|11  0  6|13  4  8|M|
|  Scotland             |F| 6 12 10| 6 18  2| 7  7 10| 7 19  8| 8  9  0| 8 19 10| 9 19  2|12  2  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| Liverpool and London  |M| 7  4  4| 7 10  6| 8  1  4| 8 15  0| 9  6  4| 9 19  0|11  0 10|13  7  8|M|
|  and Globe            |F| 6 10 10| 6 16  6| 7  6  4| 7 18  4| 8  8  0| 8 19  0| 9 19  0|12  4 10|F|
|                       | |        |        |        |        |        |        |        |        | |
| London, Edinburgh,    |M| 8  5  0| 8 11  0| 9  1  8| 9 15  4|10  6  8|10 19  2|12  1  2|14  7 10|M|
|  and Glasgow          |F| 7 11  0| 7 16  6| 8  6  2| 8 18  4| 9  8  0| 9 18 10|10 18  8|13  4 10|F|
|                       | |        |        |        |        |        |        |        |        | |
| Marine and General    |M| 6 17  3| 7  3  3| 7 13  3| 8  5  0| 8 14  9| 9  7  0|10 10  0|12 12  0|M|
|  Mutual               |F| 6  4  3| 6  9  6| 6 18  9| 7 10  6| 7 19  6| 8  9  6| 9  8  3|11 10  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| National Life         |M| 7 11  3| 7 17  3| 8  7 11| 9  1  5| 9 12  7|10  4 10|11  6  5|13 12  3|M|
|                       |F| 6 17  9| 7  3  3| 7 13  0| 8  4 11| 8 14  4| 9  5  2|10  4  9|12  9 10|F|
|                       | |        |        |        |        |        |        |        |        | |
| National Provident    |M| 6 15  4| 7  0 10| 7 10  4| 8  1  8| 8 10  6| 9  0  8| 9 18 10|11 18  6|M|
|                       |F| 6  5  8| 6 10  8| 6 19 10| 7 11  0| 7 19 10| 8  9 10| 9  7  0|11  4  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| North British and     |M| 7  5  4| 7 11  4| 8  1 10| 8 15  2| 9  6  2| 9 18  2|10 19  4|13  4  6|M|
|  Mercantile           |F| 6 12  2| 6 17  6| 7  7  2| 7 19  0| 8  8  2| 8 18 10| 9 18  2|12  2  6|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Northern              |M| 7  1  8| 7  7  0| 7 16  6| 8  8  8| 8 18  6| 9  9  4|10  8  6|12  8  8|M|
|                       |F| 6  9  6| 6 14  4| 7  3  0| 7 13 10| 8  2  2| 8 11 10| 9  9  2|11  9  0|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Pearl                 |M| 7  9  4| 7 15  8| 8  6 10| 9  0  4| 9 11  0|10  3  2|11  4  6|13 10  6|M|
|                       |F| 7  3  2| 7  9  4| 8  0  2| 8 13  0| 9  3  0| 9 14  6|10 14  6|12 17  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| Positive              |M| 7  0  0| 7  8  0| 8  0  0| 8 15  0| 9  5  0| 9 19  0|11  0  0|13  5  0|M|
|                       |F| 6 10  0| 6 16  0| 7  5  0| 8  0  0| 8 10  0| 9  0  0| 9 15  0|11 15  0|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Provident Clerks'     |M| 6 15 10| 7  1  6| 7 11  9| 8  4  9| 8 15  1| 9  6  9|10  6 10|12  9  5|M|
|                       |F| 6  3  3| 6  8  7| 6 17 10| 7  9  1| 7 18  1| 8  8  5| 9  7  0|11  8  7|F|
|                       | |        |        |        |        |        |        |        |        | |
| Prudential            |M| 6 16  6| 7  2  6| 7 13  6| 8  7  0| 8 18  0| 9 10  6|11 12  0|12 17  0|M|
|                       |F| 6  3  0| 6  9  0| 6 19  0| 7 11  0| 8  0  6| 8 11  0| 9 11  0|11 15  0|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Rock                  |M| 7  5  0| 7 11  2| 8  2  2| 8 16  2| 9  7  9|10  0  5|11  2 11|13  4  2|M|
|                       |F| 6 11  4| 6 17  0| 7  6 11| 7 19  4| 8  9  0| 9  0  2|10  0  6|12  1  3|F|
|                       | |        |        |        |        |        |        |        |        | |
| Royal                 |M| 6 12  7| 6 18 11| 7  9  5| 8  1  8| 8 11  2| 9  2  2|10  1 10|12  1  0|M|
|                       |F| 6  5  3| 6 11  0| 7  0  7| 7 11  3| 7 19  6| 8  8  8| 9  5  0|10 17  9|F|
|                       | |        |        |        |        |        |        |        |        | |
| Royal Exchange        |M| 6 16 11| 7  2  9| 7 13  0| 8  5 11| 8 16  6| 9  8  1|10  8  5|12 11  3|M|
|                       |F| 6  4  3| 6  9  6| 6 18 11| 7 10  5| 7 19  5| 8  9  8| 9  8  3|11 10  7|F|
|                       | |        |        |        |        |        |        |        |        | |
| Scottish Amicable     |M| 7  0  7| 7  6  2| 7 16  5| 8  9  2| 8 19  4| 9 11  1|10 11 10|12 15  7|M|
|                       |F| 6  7  8| 6 13  2| 7  2  8| 7 13  9| 8  2  5| 8 12  9| 9 12  0|11 14  1|F|
|                       | |        |        |        |        |        |        |        |        | |
| Scottish Life         |M| 7  7  6| 7 13  6| 8  4  4| 8 17 10| 9  9  0|10  1  2|11  2  8|13  8  6|M|
|                       |F| 6 13  6| 6 19  0| 7  8  8| 8  0  8| 8 10  0| 9  0  8|10  0  0|12  2  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| Scottish Metropolitan |M| 7 10 10| 7 18  0| 8  9  4| 9  2  0| 9 11  8|10  3  6|11  5  8|13 11 11|M|
|                       |F| 6 12  9| 6 17  9| 7  6  8| 7 17  6| 8  6  1| 8 16  3| 9 14  6|11 15  8|F|
|                       | |        |        |        |        |        |        |        |        | |
| Scottish Provident    |M| 7  2  8| 7  8  5| 7 18  9| 8 11 11| 9  2  8| 9 14  6|10 15  3|12 16 10|M|
|                       |F| 6  9  8| 6 15  0| 7  4  4| 7 15 11| 8  5  1| 8 15  6| 9 14  5|11 14  3|F|
|                       | |        |        |        |        |        |        |        |        | |
|!Scottish Widows' Fnd. |M| 6  8  0| 6 13  4| 7  2  2| 7 12 10| 8  1  0| 8 10  6| 9  7 10|11  8  6|M|
|                       |F| 6  2  6| 6  7  6| 6 16  0| 7  6  2| 7 14  0| 8  3  2| 8 19 10|10 18  6|F|
|                       | |        |        |        |        |        |        |        |        | |
| Standard              |M| 6 19  4| 7  5  0| 7 15  1| 8  7 10| 8 18  5| 9 10  0|10 10  3|12  7  9|M|
|                       |F| 6  9  8| 6 15  0| 7  4  4| 7 16  0| 8  5  1| 8 15  6| 9 14  5|11  7  1|F|
|                       | |        |        |        |        |        |        |        |        | |
| Star                  |M| 7  3  9| 7 10  6| 8  2  1| 8 15  8| 9  5  5| 9 16  7|10 17  2|13  0  1|M|
|                       |F| 6 14  4| 6 19 11| 7  9  6| 8  0 11| 8  9 11| 9  0  1| 9 18  6|11 15  8|F|
|                       | |        |        |        |        |        |        |        |        | |
| Sun (of India)        |M| 7  5 10| 7 12  0| 8  2 10| 8 16  8| 9  8  0|10  0  4|11  2  2|13  8  8|M|
|                       |F| 6 12  6| 6 18  0| 7  7 10| 8  0  0| 8  9  8| 9  0  8|10  0  6|12  6  0|F|
|                       | |        |        |        |        |        |        |        |        | |
| United Kingdom        |M| 6 15  0| 7  0  6| 7 10  3| 8  2  6| 8 15 11| 9  3  3|10  0  3|12  1  0|M|
|  Temperance           |F| 6  2 11| 6  8  0| 6 16 11| 7  6  5| 7 16  4| 8  6  0| 9  3  4|11  2  3|F|
|                       | |        |        |        |        |        |        |        |        | |
| Yorkshire             |M| 7  1  2| 7  7  6| 7 18  0| 8 10  4| 9  0  0| 9 11  6|10 11  0|12 15  0|M|
|                       |F| 6  8  0| 6 13  6| 7  2  0| 7 12  6| 8  2  6| 8 13  6| 9 12  0|11 12  0|F|
|                       | |        |        |        |        |        |        |        |        | |
|-----------------------|-|--------|--------|--------|--------|--------|--------|--------|--------|-|
| Post Office (Govt.)   |M| 6 13  4| 6 19  2| 7  9 10| 8  3  2| 8 14  0| 9  6  0|10  6 10|12 10 10|M|
|  Anns.                |F| 6  0  6| 6  6  0| 6 15  8| 7  7  6| 7 16  8| 8  7  4| 9  6  4|11  9  6|F|
|                       | |        |        |        |        |        |        |        |        | |
|-----------------------|-|--------|--------|--------|--------|--------|--------|--------|--------|-|
| Equitable, U. States} |M| 7 10  0| 7 15  9| 8  6  2| 8 19  3| 9  9 10|10  1  9|11  1  8|12 17 11|M|
| Mutual, New York    } |F| 6 16  9| 7  2  1| 7 11  6| 8  3  1| 8 12  1| 9  2  8|10  0  9|11 17  8|F|
| New York            } | |        |        |        |        |        |        |        |        | |
-----------------------------------------------------------------------------------------------------


    INDIAN GOVERNMENT STOCKS.

    These stocks stand as high in the estimation
of the public as the British Government Funds.
They consist of loans raised in this country for
the use of the Indian Government and are two
in number, bearing interest respectively at the
rate of 3 and 3 1/2 per cent.

    There is also what is termed a Rupee Paper
Loan, raised in India at 3 1/2 per cent. per annum.
The interest is paid in the currency of the coun-
try, which is the rupee, and that coin being
worth only a little more than half its nominal
value in this country, the investor in this stock
would receive in the shape of interest little more
than half the £3 10s. a year.  The price of the
stock in the market is consequently in the same
proportion, and at the present moment is about
£62 for every £100 stock.



CHAPTER VII.
LOANS TO CORPORATIONS AND COUNTIES OF
THE UNITED KINGDOM.

THESE are loans raised by boroughs and coun-
ties, and other authorities in this country, for
local purposes, upon the security of the rates or
other assured income.  Before the money is
borrowed the consent of the Local Government
Board is necessary to make the loan legal, and
evidence is required that the resources of the
borrowers are ample to meet their obligations.

    On most of these stocks the rate of interest is
3 per cent., though there are some few at 3 1/2 per
cent.  The principal is redeemable at fixed dates,
or by a sinking fund, that is, by setting aside so
much a year to pay off the loan at a fixed time,
or as opportunity offers.  For instance, in times
when money is scarce or dear there is a proba-
bility of these stocks falling below their par
value, and the Sinking Fund is then used to buy
the stock in the market.  Thus the Corporation
may be able in effect to pay off a loan of £100
for £90 or £95, whatever the price may be, and
so gain the amount of the difference.

    Investments in securities of this kind may be
considered absolutely safe, although certainly
there is the contingent risk of a town, after bor-
rowing up to its full powers, drifting into decay
from the loss of its staple trade, and so finding
itself unable to meet its obligations.  The in-
vestor should, however, find no difficulty in
discovering where such a contingency would be
possible.

    The interest on these loans is usually sent
direct to the stock-holders, by means of an order
on a bank.


    COLONIAL GOVERNMENT SECURITIES.

    Loans made to the various Colonies of Great
Britain have always been a favourite mode
of investing money, as they command a better
rate of interest, at least they have done so
in the past, although the confidence which the
Colonies have succeeded in inspiring now
enables them to borrow money at a low rate of
interest.  At the same time the old stocks have
advanced to a very considerable premium.

    Experience has shown that, so far, the invest-
ment has been a safe one, although great fluc-
tuations have from time to time taken place in
the value of some of the stocks, owing to a
check in prosperity, depression of trade, or
diminished confidence in the stability of the
Colony from various causes.  These transient
clouds have, however, in time, passed away, and
confidence has again been established.

    The investor should be able readily to distin-
guish between those Colonies which are perma-
nently settled and not likely to be seriously
affected by any passing crisis, and others in a
less fortunate or advanced position.  And he
would do well, if adversity should at any time
overtake a Colony, and so send down the value
of its stock, to avoid selling out in a panic, but
to consider whether the circumstances are such
that the crisis may pass off at no distant date,
and confidence be restored.  It should be remem-
bered that there are always speculators who, at
such times, endeavour to intensify a crisis, in
order that prices may be forced down, and that
they may be thereby enabled to acquire stocks
at low prices from timid holders.

    There are two modes of investing in these
securities,
    1. Inscribed or Registered Stock.
    2. Bonds.

    In the case of Inscribed or Registered Stock,
any amount can be invested, and the same is
registered in the books of the Bank of England
or elsewhere, in the name of the investor, in the
same way as the Government Funds.  The divi-
dend or interest is sent to the owner's address
by an order payable at a bank, half-yearly or
quarterly, as the case may be, or it may, on
written instructions being sent to the agents, be
transmitted to the credit of the account of the
holder at his own bankers periodically.  This is
by far the best plan; it saves trouble and risk,
and, for the matter of that, something in postage.
It is, moreover, the method much preferred
by the agents themselves, and it involves no
additional expense.

    The following is a list of the Inscribed Stocks
of the Colonial Governments, with an example
of the way in which the market price, which
of course varies almost from day to day, is
quoted:-


                                        COLONIAL GOVERNMENT INSCRIBED STOCKS.
---------------------------------------------------------------------------------------------------------------------------------
|          |          |                 |         |     |                                               |           |           |
|     1    |     2    |        3        |    4    |  5  |                       6                       |     7     |     8     |
|          |          |                 |         |     |                                               |           |           |
|----------|----------|-----------------|---------|-----|------------------------------------------------------------------------
|     £    |     £    |                 |         |     |                                               |           |           |
|   100,000|   100,000| 1 Mar.   1 Sept.|  4 Aug. |  4  |Antigua 4% Inscribed Stock                     |   1919-44 | 115 - 117 |
|   375,000|   375,000|15 Mar.  15 Sept.| 17 Aug. |3 1/2|Barbados 3 1/2% Inscribed Stock                |   1925-42 | 109 - 111 |
| 1,120,000|   969,940| 1 Jan.   1 July | 16 Dec. |  3  |British Columbia (Province of) 3% Insc. Stock  |      1941 | 101 - 103 |
|    --    |   194,500|15 Jan.  15 July | 16 Dec. |  4  |British Guiana 4% Inscribed                    |      1935 | 118 - 120 |
| 7,505,800| 7,505,800| 1 May    1 Nov. | 19 Oct. |  4  |Canada 4% Stock Registered                     |1904-4-6-8 | 105 - 111 |
| 3,975,614| 3,975,614| 1 Jan.   1 July | 15 Dec. |  4  |  Do.  4% Reduced (late 5%) Registered         |      1910 | 109 - 111 |
| 4,550,300| 4,550,300| 1 June   Dec.   | 16 Nov. |3 1/2|  Do.  3 1/2% Stock Registered                 |   1909-34 | 107 - 109 |
| 3,431,700| 3,431,700| 1 Jan.   July   | 15 Dec. |  4  |  Do.  4% Loan for £4,000,000                  |   1910-35 | 110 - 112 |
|10,939,834| 9,978,021|    "        "   |    "    |  3  |  Do.  3% Stock Registered                     |      1938 | 102 - 104 |
| 3,000,000| 2,115,152| 1 June   1 Dec. | 16 Nov. |  4  |Cape of Good Hope 4% Stock Registered          |   1917-23 | 117 - 119 |
| 3,769,465| 3,769,465|    "        "   |    "    |  4  |        Do.       (Loan of 1883) Inscribed     |      1923 | 119 - 121 |
| 9,997,566| 9,997,566|15 Apl.  15 Oct. |  2 Oct. |  4  |        Do.       4% Consolidated Stk. Ins.    |   1916-36 | 116 - 118 |
|    --    | 5,154,272| 1 Jan.   1 July | 16 Dec. |3 1/2|        Do.       3 1/2% Consolidated Ins. Stk.|   1929-49 | 115 - 117 |
| 1,076,100| 1,070,100|15 Feb.  15 Aug. | 16 Jan. |  4  |Ceylon 4% Inscribed Stock                      |      1934 | 123 - 125 |
| 1,450,000| 1,450,000| 1 May    1 Nov. |  2 Oct. |  3  |  Do.  3% Inscribed Stock                      |      1940 | 104 - 106 |
|   123,670|   123,670|15 May   15 Nov. | 16 Oct. |  4  |Grenada 4% Inscribed Stock                     |   1917-42 | 115 - 117 |
|   341,800|   341,800|15 April 15 Oct. | 16 Sept.|3 1/2|Hong Kong 3 1/2% Inscribed Stock               |   1918-43 | 107 - 110 |
|    --    | 1,086,241|16 Feb.  16 Aug. | 16 Jan. |  4  |Jamaica 4% Inscribed Stock                     |      1934 | 120 - 122 |
|   480,749|   480,759| 1 Feb.   1 Aug. |  2 Jan. |  4  |Mauritius 4% Inscribed Stock                   |      1937 | 121 - 123 |
|    --    |   282,481|15 May   15 Nov. | 16 Oct. |  4  |Natal 4% Consolidated Stock, Inscribed         |      1927 | 120 - 122 |
| 3,026,444| 3,026,444| 1 April  1 Oct. |  1 Sept.|  4  | Do.          do.         do.                  |      1937 | 123 - 125 |
| 3,714,917| 3,714,917| 1 June   1 Oct. |  3 Nov. |3 1/2| Do.  3 1/2% Inscribed Stock                   |   1914-39 |107.5-108.5|
|   320,000|   320,000| 1 Jan.   1 July | 16 Dec. |  4  |Newfoundland Inscribed                         |   1913-38 | 109 - 111 |
|   550,000|   550,000|    "        "   |    "    |  4  |     Do.     4% Inscribed Stock                |      1935 | 110 - 112 |
|   200,000|   200,000|    "        "   |    "    |  4  |     Do.     4% Consolidated Stock Inscribed   |      1936 | 110 - 112 |

| 9,686,300| 9,686,300| 1 Jan.   1 July |  2 Dec. |  4  |New South Wales Stock, Inscribed               |      1933 | 120 - 122 |
|16,500,000|16,500,000| 1 April  1 Oct. |  2 Sept.|3 1/2|       Do.      3 1/2% Stock, Inscribed        |      1924 | 110 - 111 |
|    --    |12,826,200| 1 Mar.   1 Sept.|  5 Aug. |3 1/2|       Do.      3 1/2% Stock, Inscribed        |      1918 | 109 - 110 |
| 4,000,000| 4,000,000| 1 April  1 Oct. |  2 Sept.|  3  |       Do.      3% Inscribed Stock             |      1935 |101.5-102.5|
|29,150,302|29,150,302| 1 May    1 Nov. |  2 Oct. |  4  |New Zealand 4% Consolidated Stock Inscribed    |      1929 | 115 - 116 |
| 5,960,588| 5,960,588| 1 Jan.   1 July |  2 Dec. |3 1/2|    Do.     3 1/2% Stock                       |      1940 |105.5-106.5|
| 1,527,000| 1,526,620| 1 April  1 Oct. |  2 Sept.|  3  |    Do.     3% Inscribed                       |      1945 |100.5-101.5|
|10,866,900|10,866,900| 1 Jan.   1 July |  2 Dec. |  4  |Queensland Stock Inscribed                     |   1915-24 | 113 - 115 |
| 8,516,734| 8,516,734|    "        "   |    "    |3 1/2|    Do.    3 1/2% Inscribed                    | 1921-4-30 |105.5-106.5|
| 1,250,000| 1,250,000|    "        "   |    "    |3 1/2|    Do.    3 1/2%    do.                       |      1945 |107.5-108.5|
|    85,490|    85,480|15 Feb.  15 Aug. | 16 Jan. |  4  |St. Lucia 4% Inscribed Stock                   |   1919-44 | 112 - 114 |
| 7,721,000| 7,721,000| 1 April  1 Oct. | 11 Sept.|  4  |S. Australia (Loans of 1882-3-4-5-6-7) Reg.    |   1916-36 | 112 - 114 |
| 2,850,713| 2,517,800| 1 Jan.   1 July | 14 Dec. |3 1/2|     Do.     3 1/2% Inscribed Stock Registered |      1939 | 111 - 113 |
|   839,500|   839,500|    "        "   |    "    |  3  |     Do.     3%         do.           do.      |   1916-26 | 97.5- 98.5|
| 3,546,500| 3,546,500| 1 Jan.   1 July | 16 Dec. |3 1/2|Tasmanian 3 1/2% Inscribed Stock               |   1920-40 | 106 - 108 |
| 1,000,000| 1,000,000|    "        "   |    "    |  4  |    Do.   4%          do.                      |   1920-40 | 114 - 116 |
|   100,000|   100,000|15 Mar.  15 Sept.| 17 Aug. |  4  |Trinidad 4% Inscribed Stock                    |   1917-42 | 114 - 116 |
| 3,365,300| 3,365,300| 1 Jan.   1 July | 16 Dec. |  4  |Victoria 4% Railway Loan, 1881, Inscrib. Stock |      1907 | 106 - 108 |
| 9,358,200| 9,358,200| 1 April  1 Oct. | 16 Sept.|  4  |   Do.      Loans of 1882-3-4, Inscrib. Stock  |1908-13-19 | 107 - 113 |
| 6,000,000| 6,000,000| 1 Jan.   1 July | 16 Dec. |  4  |   Do.      Loan of 1885, Inscribed Stock      |      1920 | 112 - 114 |
|12,000,000|12,000,000|    "        "   |    "    |3 1/2|   Do.      3 1/2% Inscribed Stock             |  1921-3-6 |104.5-105.5|
| 2,107,000| 2,107,000|    "        "   |    "    |  4  |   Do.      4% Inscribed Stock                 |   1911-26 | 108 - 110 |
|   961,277|   961,277|15 Jan.  15 July | 16 Dec. |  4  |Western Australia 4% Inscribed Stock           |      1934 | 121 - 123 |
| 1,876,000| 1,876,000|15 April 15 Oct. |  2 Oct. |  4  |       Do.        4% Inscribed Stock           |   1911-31 | 112 - 114 |
|   750,000|   750,000| 1 May    1 Nov. | 16 Oct. |3 1/2|       Do.        3 1/2% Inscribed Stock       |   1915-35 | 110 - 112 |
|   750,000|   750,000|    "        "   |    "    |  3  |       Do.        3% Inscribed Stock           |   1915-35 |  98 -  99 |
|          |          |                 |         |     |                                               |           |           |
---------------------------------------------------------------------------------------------------------------------------------
                                      The numbered columns are explained as follows:-
             1. The amount of Loan authorized to be raised. | 5. The rate of interest on the Loan.
             2. The amount actually owing.                  | 6. The name of the country borrowing.
             3. When the interest is payable.               | 7. When the Loan is re-payable - thus "1919 or 1944."
             4. When ex interest.                           | 8. The price for every £100 of stock.


    Colonial Government Bonds, the other form
of investment, are paper or parchment docu-
ments, on which are printed all details of the par-
ticular loan taken up by the Colony, the nature
of the Security the lender has in advancing
his money, the rate of interest, and when and
how the principal is to be repaid.  These
bonds are payable to bearer, and pass from
hand to hand without any formal transfer, so
that as much care is necessary in safe-keeping
them, as with bank-notes.  Attached to these
bonds are little coupons or slips of paper, each
one representing a half or quarter year's in-
terest, from the date of purchase to the time
when the principal is to be paid off.  The
coupon bears the name of the bank or agency
where it may be cashed, and any banker will
negotiate it.  Of course, only the coupon for the
interest actually due on the date indicated on
the face must be cut off.


    FOREIGN GOVERNMENT STOCKS.

    These represent money borrowed by various
foreign countries on the security of their credit or
solvency, and the loans stand to them in the same
relationship as the British Government Funds
do to this country.  The debts are chiefly repre-
sented by bonds, the same as Colonial Govern-
ment Bonds, and with coupons attached, which,
whether payable in England or their own
country, are collected by bankers in the same
manner.  Such European States as Germany,
France, Russia, Denmark, Sweden, and Italy,
always enjoy good credit, and they may be con-
sidered responsible for their financial engage-
ments.  In the case of Italy, however, it must
be remembered that the Italian income-tax,
amounting to 20 per cent., is deducted from the
interest, which has also to bear the English
income-tax, whatever at the time it may be.

    When investing in Colonial or Foreign bonds,
especial care is necessary in observing the con-
ditions of re-payment.  Sometimes it is at the
option of the borrower, but usually at a certain
specified date.  Neglect of this precaution may
lead to an investor purchasing at a premium,
and sooner than expected being paid off at par.

    Some of these loans, too, are paid off by
annual instalments, lots being drawn to deter-
mine the bonds to be redeemed.  If the bonds,
therefore, have been bought at a premium, there
is always the risk of their being drawn for pay-
ment and paid off at par.  On the other hand, if
the bonds are bought at a discount, there is no
danger of loss; and a profit will be realised
should they be drawn for payment.

    For instance, a £100 bond is purchased at 4
premium, costing £104.  If the bond is paid off
at par, or £100, there is obviously a loss of £4;
but if the bond is purchased at 4 discount, cost-
ing £96, it is equally obvious that, if paid off at
par, there would be a gain of £4.


      RAILWAYS.

    Next to the British Government Funds, by far
the largest amount of money is invested in Eng-
lish railways.  First in order of safety, as an
investment, is the debenture stock of a railway
company.  This is the first charge on the rail-
way, and holders of the stock are paid the in-
terest thereon in priority to all other stocks.  In
the event of the failure of the company they
must also be fully satisfied as to principal and
interest before any one else can receive a penny.
Any amount of stock, odd or even, may be pur-
chased through a banker or broker, and war-
rants for the interest are forwarded half-yearly
to the address of the registered holder.  The
debenture stocks of good English railways com-
mand a high premium, and the investment,
therefore, though undoubtedly safe, does not
yield much in the way of interest.  Guaran-
teed stocks are of various kinds and rank --
some on the same level as, and others next in
order to, debenture stocks.  In some cases
the interest is guaranteed by another railway.
Before investing in these stocks the nature of
the guarantee should be ascertained and its value
taken into consideration.  Preference stocks
and shares come next in rank as an invest-
ment.  The interest on these is fixed at a cer-
tain rate per cent., and, after satisfying the
preceding stocks, must be paid in full; or if
there is not sufficient profit in the year to pay
in full, then as much as means will allow.
But any deficiency cannot be carried on to the
next year, and so it is lost to the holders.

    There are several degrees of Preference
stock, some taking precedence of others as to
interest; a first preference may be as good as
debenture stock, whilst the last preference of
the same railway company may be no better
than ordinary stock.

    Preference stock may be purchased in any
amount in the market, and the interest war-
rants are sent half-yearly to the registered
holders.

    Ordinary stocks depend on the profits for the
year for the interest they yield, and thus afford
a wide field for speculation.  The stocks of the
great English lines may be relied upon as a
good investment, the profits being steady and
sufficient to assure a fair amount of interest
after satisfying the prior claims of debenture
and preference stocks.

    Ordinary stock may also be purchased in any
amount, and the warrants for interest are sent
half-yearly to registered holders of stock.

    In all cases railway warrants of every kind
will, upon written request to the secretary of the
railway company, be forwarded periodically to
the bankers of the holder of the stock for the
credit of his or her account.


    INDIAN RAILWAY STOCKS.

    These are a favourite investment with the
British public.  They consist of Debenture,
Guaranteed, and Ordinary stocks.  The Deben-
ture stocks are similar to those of British rail-
ways, and are a first charge on the undertaking.
The Guaranteed stocks are those upon which
there is an undertaking by the Secretary of
State for India that the interest shall not be
less at any time than they are stated to bear;
any deficiency in the earnings being made up
by the Government.  Should the earnings be
more than sufficient to pay the stated interest,
the surplus is divided between the Government
and the railway company.  Annuities may be
purchased in some of these railways, that is to
say, by paying, we will assume, £30 as the
market price, an annuity of £1 a year will be
granted for a certain number of years.  In
dealing with these it is necessary to ascertain
when the annuity ceases, or the investor, hav-
ing sunk the capital sum, may cease to receive
any income therefrom when least expected.

    Warrants for interest on these stocks are
periodically sent to registered holders.


    AMERICAN RAILWAYS.

    The stocks and shares of Canadian and
American railways offer a more remunerative
return than English railways, as they may be
purchased at much lower prices.  They are
subject, however, to speculative influences of
many sorts, and can hardly be recommended
for safe permanent investment.

    No venture should certainly be made in these
stocks without full knowledge of the position
and prospects of the railway company and the
contingencies to which it may be subject.  Any
banker would obtain for a customer all the in-
formation that could be afforded in regard to
these stocks, and indicate their market value as
an investment, apart from the fictitious value
induced by speculators, and the manoeuvres of
syndicates and wire-pullers.


    FOREIGN RAILWAYS.

    The capital of foreign railways consists of
obligations, stocks, and shares.  The obligations
are in the form of bonds, being a first charge on
the railway.  The bonds vary in amount, but
chiefly represent £100 and £20, and they bear a
certain rate of interest.  Some of the Conti-
nental railways may offer a fair investment in
this way, but great care is required in the
selection.

    The stocks and shares of some of the South
American railways command a high premium,
but of the whole number quoted in the official
list the large majority show a heavy decline on
the original value, many indeed being valueless.
These stocks are highly speculative and subject
to be affected by political convulsions and other
contingencies, which make them undesirable as
an investment.


    BANKS.

    A joint-stock bank is composed of a number
of proprietors who hold the shares which make
up the capital of the bank, and to the nominal
amount of these shares their liability is limited.

    The whole of this amount, however, is not
paid up, but only sufficient for the working re-
quirements of the bank, the remainder being
held in reserve for contingencies.  Let us take,
for instance, the London and Westminster Bank,
which has the largest capital of all the joint-
stock banks.

    The capital amounts to £14,000,000, made up
of 140,000 shares of £100 each.  Only £20 of
this £100 is paid up, leaving a liability of £80
on every share.

    A joint-stock bank is governed by a board of
directors, elected by the shareholders; and
managers and other officers are appointed by
the board to conduct the business.  Many of
these banks, besides having a head establish-
ment in London, have branches all over the
country.  Every joint-stock bank is compelled
by law to publish its accounts so as to show its
position, and these accounts are presented to a
yearly or half-yearly meeting of the shareholders
for approval.

    The British Colonies have a good many joint-
stock banks, with agencies in London.  By a
Permissive Act passed in 1825 the shareholders
in most of these are liable for double the amount
of their shares.

    The profits of banking have been, in times
past, very large, and the original shareholders
of the older banks have reaped the advantage
thereof, but bank shares of good repute are not
now to be obtained except at a high premium.

    The dividends are sent half-yearly to the ad-
dress of the shareholders, and they are not liable
to income-tax, as the bank pays this.  Any one
entitled to exemption from income-tax can claim
from the surveyor of taxes the amount the bank
has paid in respect of the dividend, on a certifi-
cate from the bank to that effect.*

* See Note, p.39.

    Individuals of a timorous disposition, if they
value their peace of mind, would do well to
avoid investing their money in bank shares.
There are banks whose position and stability
are above suspicion, and which return handsome
dividends to their shareholders; but there have
been cases of banks, enjoying unlimited confi-
dence, which have unexpectedly collapsed and
overwhelmed their shareholders in ruin.  The
nervous person, therefore, who could not read of
the collapse of a bank without a fearful appre-
hension that his own would be the next to go,
had better be content with a smaller rate of in-
terest and a tranquil mind therewith.  The more
sanguine investor who desires a good rate of
interest for his money, and has a contempt for
contingencies, should at least have some know-
ledge of accounts, and be able to form some
estimate of the position of a bank from the
annual balance-sheet, and should carefully
ascertain what immediate contingent _liability
he would be_ subject to in the event of collapse.


    COLONIAL AND FOREIGN CORPORATION STOCKS.

    These represent money borrowed by munici-
palities and trusts in Colonial and foreign towns,
and the security offered consists of rates and
revenues from the various undertakings, such as
harbours, gas, and water-works, city improve-
ments, &c., in which the loans are invested.
The loans are mostly represented by bonds, to
which coupons are attached for interest, and are
repayable at a certain specified date.  Although
they do not command the high credit of British
Corporation loans, yet some of the Colonial
towns are in fair repute as an investment, and
the rate of interest is high enough to tempt a
large amount of money from this country.
Towns of some size in our Colonies, and
thoroughly settled, may be relied upon to carry
out their obligations, but mushroom cities and
foreign places liable to political fluctuations
should be looked upon with suspicion.


    CANALS AND DOCKS.

    These offer but a limited area for investment.
They were formerly very popular with the
British investor, but rival interests and labour
troubles have affected the confidence in which
they were held, and the ordinary stocks are
mostly at a considerable discount.

    Gas and electric lighting companies, trams
and omnibus companies, telegraphs, telephones,
water-works, &c., must all be judged by the
localities which they serve and the amount of
business they are likely to command.  As per-
manent investments it should be considered
whether they are likely to suffer by supersession
or opposition, and if they are managed by a
trustworthy competent board of directors.


    BREWERIES.

    Among the numerous commercial undertak-
ings offering for investment, brewery companies
form a class of themselves, and, with few excep-
tions, the English companies appear to have
done well, and the shares of the best of them
stand at a high premium.  Properly managed
and dealing in an article of universal consump-
tion, brewery companies ought to be a trust-
worthy investment: but they are liable to much
fluctuation.  The shares of one of the leading
concerns, which now stand at about 150 for the
£100 share, were only four years ago as low as
28, and at the same time only half the interest
was paid on the preference shares.  American
brewery companies are liable to be manipulated
by cliques and syndicates, and should be avoided
as an investment.


    COMMERCIAL AND INDUSTRIAL COMPANIES.

    Speaking generally, taking shares in this
class of property is like purchasing tickets in a
lottery in which the prizes are not numerous.
It may fairly be said that at least three-quarters
of these companies are formed for the purpose
of relieving private owners of concerns which
were on the verge of failure through some cause
or another.

    It would be palpably foolish for a man or a
firm doing a prosperous business to give it up
into other hands, unless such a price could be
obtained for it as would be almost ruinous to
the purchaser.  True it is that in the remaining
quarter may be found perfectly legitimate un-
dertakings formed into companies, owing to the
death of the owner, deficient capital, or some
other valid reason.  Some of these flourish and
take root, others are prosperous for a time and
gradually die out.  After a time it will be found
that few remain which could be recommended
for a permanent investment; and much informa-
tion has to be sought and acquired before the
venture should be made.

    There are, of course, many persons who have
the means of acquiring reliable information
about a company, and are able to form a sound
opinion as to its prospects, but the information
is derived from personal knowledge and not
from kind friends or from public prints, which
are not always to be trusted.  These persons
purchase shares either for investment or as a
speculation -- in this latter case with a know-
ledge or, at all events, a safe presumption that
they will go to a premium, that is, rise in value
to considerably more than their nominal amount,
either from their own merits, or from an active
demand for them on the part of the public, or by
artificial stimulation.  The holders know pretty
well when the highest price has been reached,
and then sell out with great advantage to them-
selves.  It is often at that moment that the _tyro_
is recommended to buy, or is seized with a desire
to have a share in so good a concern, and parts
with his money.  The knowing speculator has
taken his profit, and sees with grim satisfaction
the shares gradually declining in value, until
they arrive at the position of more than one-
third of existing companies which are now
quoted at a discount.


    FINANCIAL LAND AND INVESTMENT COMPANIES.

    These companies are mostly formed for the
purpose of employing their capital in the
Colonies, where money commands a higher
rate of interest, and can be more profitably
employed than in this country.

    Some of the older concerns have been suc-
cessful, but of the whole number of existing
companies at least one-half, judging from the
price of their shares, have been failures.  The
difficulty with these concerns would seem to
be the want of direct control, their business
having chiefly to be conducted by agents who
often consider their own interests before their
employers'.  Some of these companies appear
to have advanced large sums of money on the
security of land which they can neither sell nor
let, and which has been abandoned by the
borrower.


    FINANCIAL TRUSTS.

    The shares in these trusts were at one time
much sought after as an investment.  The
ostensible business of a trust company is to
purchase shares and stocks of other concerns at
favourable opportunities, and to invest widely
in foreign and other companies offering good
dividends, so as to average a high rate of inter-
est.  They are divided into debenture stock,
preferred stock, and deferred stock.  The latter
has its share of the profits after the others have
been satisfied, and at present three-fourths of
the companies now doing business have their
deferred shares at a discount.  The financial
collapse in Argentine, some years since, very
seriously affected most of these concerns, and it
is doubtful, in view of the risky nature of the
business, whether they will ever come into
favour again.


    INSURANCE COMPANIES.

    Under the head of Life, Fire, and Marine
Insurance, these companies, as a class, have
been more steadily successful than others.  Most
of these concerns are making large profits, and
their shares command a high premium; so high,
indeed, that an investment at current prices
yields but a moderate rate of interest.  The
risks undertaken by insurance offices are enor-
mous in extent, but the law of average by which
they are conducted is so accurate that, taken in
the long run, and with sufficient business main-
tained, misfortune is almost impossible.  In all
cases, however, so little is called up of the
nominal amount of their shares, that a very
large liability attaches to them.


    STEAMSHIP COMPANIES.

    Judging from the prices of the shares in these
companies, they have not been very successful
as a whole, and it would appear that a Govern-
ment subsidy for mail or other service is almost
necessary to make them profitable.


    MINES.

    Speculation in shares of mining companies
has of late years been indulged in to an enor-
mous extent, and large fortunes have been made
and much money lost.  As a rule the prizes
have been secured by those behind the scenes,
and the public have not had the opportunity
of participating until the price of shares had
reached a figure which was almost prohibitory.
As an investment mining shares, even of the
best, are not to be recommended.  Mines are
apt to get worked out when the source of income
fails and there is an end to the concern.  More-
over, hundreds of companies are promoted which
have a specious appearance on the prospectus,
and are puffed in every imaginable way, when
they have not an ounce of ore or a yard of
ground to call their own.  Of course, there are
genuine undertakings which answer well and
yield large profits, but it is extremely difficult to
discriminate between the good and the bad, and
the best after all are but a speculation.



CHAPTER VIII.
THE STOCK EXCHANGE.

THE Stock Exchange is a market for the
sale and purchase of all kinds of securities.
The buildings, wherein business is transacted,
occupy a triangular plot of ground near the
Bank of England, and comprise the Hall where
the various markets are held, and other rooms
and offices for the use of the numerous officials.
There are 2,500 members, and the management
is vested in a Committee selected from their
number.  Admission to membership is open to
any person not engaged in another business,
and who is properly proposed and seconded;
but very strict regulations and guarantees are
enforced before entry, so as to exclude any one
whose circumstances and character will not bear
the strictest investigation.  The hours of busi-
ness are eleven to four o'clock on all days except
Saturday, when they are until two o'clock.  The
members of the house are divided into Jobbers
and Brokers, the former being dealers in stocks
and shares.  It is contrary to practice for
brokers to deal with brokers, and all trans-
actions are between brokers and jobbers.

    What are known as "markets" are groups of
jobbers distributed about the house, each group
having its own particular dealings, one in
Government Stocks, another in English rail-
ways, a third in Foreign securities, and so on.
A broker having received an order from a
customer to sell £1,000 Great Eastern Railway
Stock, would go to the English railway group
and inquire of a jobber the price or quotation
for Great Easterns, without disclosing whether
he wants to buy or to sell.  The jobber replies,
"115 1/4 to 115 1/2"; whereupon the broker says, "I
sell at 115 1/4," when the bargain is completed,
without any memorandum or written contract,
the verbal communication being alone in use,
and the jobber is bound by it.  It will be
observed that the lower price, 115 1/4, is accepted
by the broker on behalf of his customer, as a sale
is always effected at the lowest quotation, and a
purchase at the highest.  Another broker pre-
sently goes to the jobber and asks the same
question receiving the same reply, 115 1/4 to 115 1/2
the broker says, "I buy of you at 115 1/2," being
the highest quotation.  The difference of 5s.
between the sale and the purchase is the Job-
ber's profit.  The broker charges his customer
his own commission or brokerage on the trans-
action, which ranges from 2s. 6d. per cent. on
the Government and Colonial Stocks up to
10s. per cent. on railway stocks.  This is the
elementary stage of the business of the Stock
Exchange, but the variety of the securities dealt
in, under constantly changing circumstances,
the number of transactions, and the amount
of money changing hands, involve intricate
accounts and arrangements, which need not be
particularised here.  Accounts are settled fort-
nightly, the precise dates being fixed some time
before by the Committee of the house.

    Many speculators, however, especially those
who have bought stocks and shares with the
expectation that they will speedily rise in price,
do not find it convenient to pay the purchase-
money on the appointed settling day; so pay-
ment may, by arrangement, be carried over to
the next settling day.  For the accommodation
a certain charge, which is called "contango,"
is made, the amount varying with the value of
money and the quality of the stock.  "Back-
wardation," on the other hand, is a commission
paid in order to postpone the delivery of stocks
or shares which a speculator contracts to sell,
but which he never possessed.  He is a specu-
lator for the fall, hoping by the delay to be able
to purchase the same stocks and shares at a less
price than he bargained to sell them for, and so
make a profit out of the transaction.  Specu-
lations for a rise are known on the Stock
Exchange as "Bulls," and their object is by
every manner of means to get the prices of the
stocks they are dealing in pushed up as much
as possible.  Speculators for a fall are called
"Bears," and they are equally anxious to send
prices _down_.  So sensitive is the stock market
that prices are easily affected; the rumoured
prospect of an important dividend from a rail-
way company will at once probably influence
the price of its shares, whilst a report of a
disastrous accident will have the contrary effect.
A "boom" in the money market is a cheerful
desire on the part of the speculative public to
be purchasers at advancing prices, and this
betokens good business for the brokers and
jobbers.  A "boom" in any particular stock is
a buoyancy in prices, caused by some favourable
rumour, whether founded or unfounded, more
often the latter, and set agoing in the interest of
persons who desire to get rid of surplus stock.
A "boom" in railway shares is often brought
about by increased traffic receipts; a "boom"
in mining shares is caused by one or two com-
panies having produced more gold this month
than last; and a "boom" in foreign stocks
is due to the settlement of some political or
other difficulty, &c., &c.  A "slump" is just the
reverse, being an unaccountable depression
which sometimes fastens upon the specula-
tive world, and betrays distrust in everything.
Unless this feeling is checked in time it
degenerates into "panic," when prices fall to
a ruinously low figure.

    Each fortnightly settlement includes three
days -- the first being continuation or "con
tango" day, when all transactions of a specula-
tive description are arranged to be carried over
to the next settlement day.  The second is the
ticket day, when the names of purchasers and
sellers are handed over.  The third is pay-day
when all amounts or balances due for stocks
bought or sold are paid or received.  The great
bulk of business being purely speculative, the
first day is the busiest; after noon on that day
all new transactions entered into are for settle-
ment at the next account day, unless otherwise
specially arranged.

    Any sums of money may be invested in, or
any particular amount of stock purchased of, the
Government Funds, through a broker or banker,
and there is practically no limit to the quantity
that may be held.  In the books of the Bank of
England an account is opened, and the name,
address, and description of the investor care-
fully registered.  A memorandum is given of the
transaction, but it is of value only as such, not
being in the nature of a certificate or receipt,
and it is not required to be given up or produced
in the event of a sale or transfer of the stock or
any portion of it.  Accounts may be opened in
one, two, three, or four names, but not more, and
four different accounts may be open at the same
time in the same name or names, but they must
be distinguished as accounts A, B, C, and D.

    In order to sell stock the holder may attend
at the Bank of England himself accompanied
by his broker, and then and there have the
transfer made and the money paid.  But this
would be unusual and held to imply mistrust,
without perhaps occasion for it.  The safest plan
is for the holder to instruct his bankers to carry
out the transaction, and give them a Power of
Attorney to enable them to do so.  A special
form of power is provided by the Bank of Eng-
land, the cost of which is 11s. 6d.  The Inscribed
or Registered Stocks of most of the Colonial
Governments are dealt with in the same way, as
well as Indian stocks and the stocks of many of
our larger towns.  The account of an investor
may be added to or diminished at any time with-
out difficulty or delay.

    The stocks and shares of railway and other
companies may be purchased through a broker
or banker, and the holder passes them over to
a buyer by a formal deed of transfer.  The
purchaser's name, address, and description are
carefully registered in the books of the company,
and he has then accepted all the responsibilities
that may attach to the shares.  For instance, the
shares he has bought may be only partly paid
up.  The shares in railway companies are
usually paid up in full, but it may so happen
in an issue of new shares that they are paid up
by periodical instalments; in which case what
has already been paid is known as "scrip," and
retains that name until developed into fully-paid
shares.  A company formed of £20 shares may
have called up only £5 on each, and with no
intention of demanding more, yet the holder is
liable for £15 on every share he holds, and
before he invests his money he should be careful
to ascertain the full extent of his liability.
Some little time after the transfer of the stock or
shares has been completed, a certificate will be
issued by the company, giving full particulars
of the holding, and this certificate must be care-
fully preserved, as it will be required to be given
up before all or any portion of the property can
be sold.  The Colonial, foreign, and other bonds
payable to the bearer, which have been pre-
viously described, are purchasable through a
broker or banker, and handed over without any
transfer or other formality.  Bonds of this
description should be left in the safe custody
of a banker, who would cut off and collect the
interest coupons attached, as they became due.

    As an example of the hazard incurred by
keeping securities of this kind in one's own
house, the writer remembers a case where a
gentleman was examining in a room of his
house, by the light of a candle, some bonds
which he afterwards locked up in an iron safe.
It was dark outside and the blind was drawn up,
so that any one from the garden could see all
that was going on in the room.  Next morning
the empty safe was found in the grounds and
the contents had been carried off.  All the par-
ticulars of the bonds were at once telegraphed to
the Stock Exchange, the London banks, and the
Police authorities.  Some months afterwards the
bonds turned up in the hands of a banker in
London, who had received them from an agent
abroad.  An action was brought by the original
owner for their recovery, but it was of no avail,
as the securities had come into the hands of the
banker in the course of regular business, and so
the loser could get no redress and, moreover,
had to pay a large amount in costs.

    The broker, who is a member of the Stock
Exchange, from the precautions taken on his
admission, should be a responsible person, whom
it would be safe to entrust with any business
which might be put into his hands.  His deal-
ings, however, are chiefly on behalf of the
bankers and outside brokers, acting for them-
selves and the public.  There are numerous
outside brokers (that is, brokers who are not
members of the Stock Exchange) in London
and all over the country.  In every profession
there are some doubtful members, and stock-
broking has its fair share, but with ordinary
vigilance on the part of their customers, well-
established brokers will carry out their com-
missions faithfully and reasonably.  As to the
advice, however, a broker may have to offer in
the way of investments, it must be remembered
that he is no more than mortal, and would at times
be prone to submit such securities as he him-
self, on behalf of a client, would most desire to
dispose of.  In this way, too, the country broker
is liable to be pressed by his London agent to
get rid of particular stocks or shares which hang
heavy on hand.  However, bearing this well in
mind, an investor may gain much useful infor-
mation from his broker, although for sound
advice his banker is to be preferred.

    Members of the Stock Exchange are not
allowed to advertise themselves or their firms,
but most of the daily newspapers in London
have an agent in the house, either a jobber or
broker, who furnishes to his principal for publi-
cation a daily report of the state of the markets
and the current prices of the day, which in that
way reach the eye of the public.  It may be
assumed that in the better class of journals the
information thus afforded is perfectly trust-
worthy, although some years since one of the
leading newspapers was imposed upon by its
agent, who took advantage of his position to
manipulate certain matters for his own ends.
Less scrupulous publications, however, are freely
made use of to influence the public, to cry up
or prejudice the markets and particular concerns.
The provincial broker, as a rule, limits his ad-
vertisement to the name and address of his firm,
with a quotation of the prices of a few of the
stocks mostly dealt in, and monthly, or quar-
terly, sends an extended list to his customers.
The outside broker who advertises himself freely
in the newspapers, as well as by pamphlets and
circulars, is to be avoided.  He will invite you
to participate in his system -- always an in-
fallible one -- of operating.  He will suggest
"options," "put and call," the "cover" system,
and other devices by which the inexperienced
may be mystified and beguiled into losing their
money.  However astute a man may consider
himself, experience proves that, with amateurs,
this kind of gambling is sure to result in loss.

    An ingenious mode of practising on the cre-
dulity of the public may be noticed in some
financial publications.  An editorial notice or
subsidised paragraph will be inserted in the
paper, extolling the merits and predicting the
certain success of some concern which it is
desired to bolster up or to foist upon the public.
This is done in such a way that the reader is
expected to believe that it is the genuine ex-
pression of a truthful opinion by the editor, who
has obtained his information from unimpeach-
able sources.  Of course, this peculiar kind of
advertisement has to be paid for, but it has its
advantages to the advertiser, for it can (for a
consideration) be quoted by the country papers
as unbiassed news, and attention called to it in
a money article or leaderette.  The pamphlets
issued by the advertising outside broker are
sometimes amusingly artless in the endeavour
to sell shares and attract custom.  On the first
page will be found some paragraphs setting
forth the merits and prospects of certain named
companies, and advising the reader to buy
shares in them without a day's delay, as a con-
siderable and speedy rise in value is assured.
One may be permitted to wonder why the
broker and all his friends do not rush in and
secure every share that is to be had.  At the
end of the paper the reason will be discovered;
in every one of the concerns referred to shares
are offered for sale, which cannot be got rid of
in the regular market.  It must be inferred that
some credulous persons are taken in by this
transparent artifice, or it would not be so con-
stantly practised.  The object of these publica-
tions is chiefly to puff up doubtful securities, in
the hope that some fatuous speculator may be
tempted to buy.  It is delightful when two of
these gentry fall out and expose each other's
knavery.  The reader is assured that "Codlin's
his friend, not Short"; the latter is denounced
as a fraud and retaliates, but no action for libel
is brought, because both know that on either
side the imputation is justifiable.

    It may excite surprise in some who are
favoured with circulars and prospectuses which
are, through the Post Office, sown broadcast
over the whole country, how the name and
address of a comparatively obscure individual
should be known.  Prospectus and circular
distributing is a business conducted on a regular
system.  When it is desired to invite subscrip-
tions to float some new company or to bolster
up some concern, the share lists of the same
sort of companies already in existence are
drawn upon for names and addresses; and
court directories also furnish a wide field for
operations.

    At the present time the rage appears to have
set in for forming limited liability companies out
of private industrial concerns or trading firms.
Most of these companies, we are told by an
authority, "are brought out under the same
auspices" -- that is they are started and floated
by a skilled personage known as a "promoter."
The stereotyped prospectus must now be familiar
to most people, and the public respond freely
to the invitation to subscribe for shares, without
consideration or inquiry.  The prospectus is
usually replete with statistics, showing the suc-
cess which has attended the business whilst in
private hands, and the enormous profits made;
and one is apt to wonder why they did not keep
it to themselves, instead of inviting the public
to share in the gains.  But there are good com-
panies and bad companies, and it is to be feared
that the latter largely preponderate.  A good
company may have a genuine reason for its
existence, such as the desire of a last surviving
partner to retire from active life, or the growth
of the business to such an extent that more
capital is required than could be obtained from
a private person, or upon some other equally
valid ground.  A bad company is often the
make-shift to save a decaying firm from insol-
vency, or to dispose of a business at a price
quite out of proportion to its real value.  The
prospectus affords no opportunity of discrimi-
nating what is genuine and likely to succeed
from what is false and sure to fail.  If, as it has
been said, eighty per cent. of companies floated
sooner or later go to the wall, then, indeed,
inquiry and much circumspection are needed
before entering upon a speculation of the kind.
It must be said, however, that many companies
formed from trading concerns have become well
established and profitable, and if permanency
could be relied upon, they furnish a field for
lucrative investments.  Those adventures which
are unduly pressed upon the notice of the public
should be regarded with suspicion.  If a thing
is really good in itself, it will not require much
persuasion to commend itself; and if bad, no
purchased laudation will make it better.  A
subtle mode of advertising is just now coming
into vogue, which, though expensive, will for a
time be successful.  There need be no reflection
on the companies which adopt it, though calcu-
lated to beguile the innocent and confiding in-
vestor.  A leaf or two introduced in some of
our illustrated papers, in no wise differing in
the printing from the remainder of the publica-
tion, and appearing as though it formed part
of the regular pabulum offered to the public.
This leaf or leaves contain well-executed pic-
tures of the works and machinery and other
interesting objects connected with the industry
of a company to which it is desired to call
attention, and a descriptive account is given of
its magnitude and success.  To the casual reader
all this would appear to be a matter of public
interest, offered to the public as part of the
regular business of the paper, but it is only an
ingenious form of advertisement and has to be
paid for as such, but that is of no consequence
if the effect is produced, of a rise in the price
of the shares.  There are some companies whose
shares are quoted at such enormous premiums,
and which pay such high dividends, that the
investor is sorely tempted to embark in similar
undertakings, apparently, that are brought be-
fore the public.  But these prosperous concerns
are in most cases first taken up by a syndicate
-- that is, a certain limited number of persons
behind the scenes -- who finance and float the
company, and when success has been attained,
the public are granted the privilege of purchas-
ing shares -- but at such a price as the syndicate
choses to put upon them, and, not seldom, that
is the highest they ever attain.  This is particu-
larly the case with mining companies, the
successful ones having certainly only benefited
the few.  This syndicate system has given rise
to a bogus imitation, which, however, appears to
have met with but limited success.  Circulars in
lithographed writing, marked "private and con-
fidential," and implying a friendly interest in
those addressed, are sent to persons whose
names are obtained in the manner already indi-
cated.  An invitation is given them to join a
syndicate about to be formed to float a certain
company, the profits arising from the operation
being certain and enormous.  Again, if it be
such an excellent and certain venture, why offer
a share to an entire stranger?  These circulars
are very speciously worded, and there is an air
of candour about them likely to allure.  Anyone
foolish enough to subscribe would probably,
after an interval, be informed that owing to un-
foreseen circumstances the adventure had turned
out a failure, and that all the money had gone
in expenses.  Successful gold mines have
yielded large fortunes to their proprietors, but it
must be remembered that mines have but a
limited existence, and once they are worked out
the money invested in them is lost; for when
they cease to yield ore there is nothing more to
be obtained from them.  Promiscuous dealing
in mine shares is nothing more or less than
gambling, or taking part in a lottery in which
the blanks are overwhelming and the prizes
next to nothing.  If an enterprise has in it any
degree of soundness or promise, there are plenty
of the knowing ones ready to step in and take
all the advantages to be gained; it is the des-
perate ventures and unscrupulous swindles that
the public are mostly pressed to support -- only
to lose their money.  It is to be hoped that the
dupes are at length awake to the pit-falls dug
for them by the mining company promoter and
speculator, whose seductive paragraphs are
everywhere in evidence in the advertising sheets
of the day.

    A typical example -- and not a fictitious one
-- of hundreds of knavish concerns foisted on
the public may be quoted.  A certain company,
of which no prospectus has been issued, nor of
which anything is publicly known, appears in
the mining lists.  One day, a paragraph in a
financial paper reports that the agent for the
mines, on the spot, has cabled that the promise
of success exceeds all expectations, that samples
of ore, yielding three ounces to the ton, have
been found, and that the necessary machinery
must be sent out at once.  This is followed up
by an editorial leaderette (of course, paid for),
in which the writer expresses surprise that the
shares of so promising an enterprise should be
at so low a price, and predicting a rapid advance
when the work is further developed.  These
notices effect their purpose to the extent of rais-
ing the quotations of the shares a few shillings,
but this is not enough for the promoter; a cir-
cular is next issued, in the usual way, to the effect
that the directors have been fortunate enough to
secure additional property near their own, which
furnishes wood and water, so essential to the
proper development of the mine, and including,
moreover, alluvial pits abounding in gold.  An
elaborate lithographed sketch of the property,
with mines at work and a steam-engine, accom-
panies the circular, and the whole presents an
appearance of real business.  The next move is
the statutory meeting of the shareholders, which,
however, is very sparsely attended, as the vic-
tims are chiefly people residing in the country,
who do not care to incur the expense of a journey
to London.  The man who presides at the meet-
ing, an outside broker, begins a speech by
apologising for the absence of the chairman of
the company (of whom the shareholders hear
for the first time), and then goes on to describe
with tedious detail the technical working of the
mine, the stopes and veins, and bunches of gold
that there are, and the stamps, machinery, &c.,
that there are to be.  He describes what has
been done in the alluvial pits, and the prospect
of wealth to be drawn therefrom as beyond the
dreams of avarice, and winds up with warm con-
gratulation of the proprietors on the valuable
property they possess.  Whether he has over-
done his part or something prejudicial to the
company leaks out, the shares which had
changed hands at 10s. gradually drop to 5s.
Then a circular goes the round in which some
member of the ring of knaves invites the public
to join a syndicate to buy up five thousand of these
shares which he has, through peculiar circum-
stances, been able to secure the refusal of at 4s.
a share.  A special meeting of the shareholders
is next called, when it is announced that more
capital is required, and that it will be necessary
to pay up the one shilling per share which still
remains outstanding.  A last desperate effort
to get rid of the shares at any price is then
resorted to before the call of one shilling per
share becomes payable, and some thousands are
offered at one shilling and sixpence each.  After
the time has expired for paying the call, a last
circular is issued, intimating briefly that the
eminent engineer, who has originally given such
a glowing account of the mine, now reports that
there is no present indication of gold on the
property, but that possibly some might be found
if they dug deep enough!

    The name of the company has disappeared
from the mining share list, and it will be heard
of no more.  It is doubtful if there ever was any
property, or engineer, or board of directors, or, in
fact, anything more than the outside broker and
his confederates.

    Of the _bona fide_ speculative undertakings in
South Africa and Australia, the exploration
and finance companies, or some few of them,
have made the largest profits.  Their system,
broadly speaking, is to acquire certain tracts of
land in a gold-bearing district, and then let
small portions on lease to different subsidiary
companies, which have been floated to develop
gold or whatever else these portions may con-
tain.  The price paid to the parent company is
made up of; perhaps, one half in cash and the
other in the shares of the new concern.  An im-
mediate profit accrues from the payment in cash,
and there is a wide field for further gains if the
operations of the subsidiary companies are suc-
cessful.  But in this, as in all speculative enter-
prises, the prizes have been few and the blanks
many.



CHAPTER IX.
LIFE INSURANCE.

LADIES do not take advantage of the system of
life insurance to the extent one would expect,
seeing the benefits it is capable of conferring
upon themselves and their belongings; and as
their indifference is no doubt, in many cases,
owing to a want of knowledge of the subject, a
chapter thereon may be useful.

    Life insurance is an admirable system, devised,
in all its ramifications, to provide against loss or
damage through the various contingencies to
which human nature is subject.

    A simple life insurance is that by which a
person may leave behind him a sum of money
for the benefit of those who, during his life, have
been dependent upon him.  For example, a
husband, whose income is entirely derived from
his own exertions, desires to make some pro-
vision for his wife and children in the event of
his dying before them.  At the age of thirty he
may, by paying £25 a year to an Insurance
Office, secure at his death, whenever it may
happen, £1,000, for the benefit of his wife or chil-
dren, or as he may direct by his will.  In a way
insurance is a kind of savings bank, but impos-
ing an obligation on the part of the depositor to
save a certain sum every year.  In the case of
the bank, the savings are optional, and cease at
death; whereas by insurance, the return of a
large sum is the result of the death of the com-
pulsory depositor.  If a person put by £25 every
year and invested that sum in the Government
Funds at 2 1/2 per cent., or deposited the same sum
annually in a bank, at the same rate of interest,
it would take him twenty-eight years to accumu-
late £1,000, if he lived so long; whereas by an
insurance on his life for the same amount, if he
died a week after the first payment of £25 had
been made, the £1,000 insured would be paid to
his representatives.  It might be said that if the
person lived longer than the term of twenty-
eight years and went on saving the £25 every
year, he would in the end accumulate more than
£1,000.  This, however, is met by insuring in
such manner that the insurance carries "profits,"
that is, additions made by the gains of the office
from time to time.  If insurance be made in this
manner, for which a slightly higher rate of pre-
mium is paid, it will be found that, however long
a person might live, more would accrue at death
by insurance than by saving.

    There are in active existence so many insur-
ance companies of good repute and undoubted
stability that no difficulty need be experienced
in making a judicious selection.  Of course, the
intelligent insurer would prefer an office whose
system would best suit his own requirements.
There are two kinds of Insurance Companies,
one known as a "Mutual" office, in which _all_ the
profits which may be earned are periodically
added to the amount insured, the other in the
form of a Joint-Stock Company, in which a small
proportion of the profits are distributed amongst
the Shareholders and the remainder added to
the Insurances.  The Mutual Office dividing the
whole of its profits amongst the insured would
appear to be the more advantageous of the two,
and undoubtedly it is, all other things being
equal; but insurances may be effected which do
not share in the profits, at lower rate of pre-
mium, and in that case one system is as good as
the other.  The intending insurer would do well
to obtain the prospectuses of several offices,
which he can easily do by writing for them
direct to the head office or by applying to the
several agents of the companies who abound in
all towns; and carefully compare one with
another.  It will be found, perhaps, that one
office charges a less annual premium for an in-
surance than another, but this may be compen-
sated for by the latter declaring larger profits, or
giving advantages in other ways.  For instance,
a certain "Mutual" office charges for an insur-
ance of £1,000, on the death of a person begin-
ning to insure at the age of thirty, a pre-
mium of £26 16s. 8d. per annum, whereas a
certain Joint-Stock Company's demand is only
£24 14s. 3d.; but the advantages offered by the
former in the shape of larger bonuses, though
deferred, are greater, while the benefit of a less
annual payment is of course immediate.  Where
the insurance is effected at the same age and
for the same amount, but with no other benefit
or profit prospectively than the bare amount,
the premium in the former case is £21 4s. 2d.,
and in the latter £21 15s. 10d.  There are good
offices, however, where the premium charged is
less than this.

    There is at least one office which insures upon
what is called the half-credit system.  One-half
the usual premium is paid for a certain term of
years, and thereafter the full premium is
charged.  This may be useful in a case where
a person wishes to insure while young and the
premiums are low, and at the same time is desir-
ous of deferring the full payment until his income
is so improved that he can better afford it.
This system is carried still further by an in-
surer only paying half the premium during his
lifetime, the other half being accumulated until
his death, and then, with interest added, de-
ducted from the amount payable in respect of
the insurance policy.

    Having chosen the insurance office or com-
pany which best suits his purpose, the proposer
applies to its nearest agent and makes known
his desire to insure his life.  A form containing
printed queries somewhat like the following
(though offices differ somewhat in details) will
be placed before him and the blank spaces filled
in either by the agent or himself.

---------------------------------------------------------------------------------------------------------------------------------
|                                                  PROPOSAL FOR LIFE ASSURANCE                                                  |
|-------------------------------------------------------------------------------------------------------------------------------|
|                                                             | Full Name _____________________________________________________ |
|                                                             | Profession or Occupation ______________________________________ |
|              1. Life proposed to be Assured                 | Business Address ______________________________________________ |
|                                                             | Residence _____________________________________________________ |
|                                                             | Married or Single _____________________________________________ |
|             ------------------------------------------------------------------------------------------------------------------|
|              2. Age next Birthday ________ years.           Born at _________________________________________________________ |
|                           on the ___________________________ day of _______________ in the year 18_________                   |
|                                                       (Evidence to be produced.)                                              |
|             ------------------------------------------------------------------------------------------------------------------|
|              3. Has he resided out of Europe?               |                                                                 |
|                 If so, where, and for what period?          |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|              4. Is he, and has he always been, of sober and |                                                                 |
|                 temperate habits?                           |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|              5. Has he had any serious illness or disease   |                                                                 |
|                 tending to shorten life?                    |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|              6. Has any near relative died of any hereditary|                                                                 |
|                 disease?                                    |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|              7. (1) Has a proposal to effect an Assurance on|                                                                 |
|                    his life ever been declined?             |_________________________________________________________________|
|                 (2) Or accepted at more than the ordinary   |                                                                 |
|                    rate?                                    |_________________________________________________________________|
|                 (3) If so, on how many occasions, and       |                                                                 |
|                    when, and by what office or offices?     |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|              8. Is there any other circumstance which ought |                                                                 |
|                 to be communicated in order to enable the   |                                                                 |
|                 Company to judge fairly of the risk?        |                                                                 |
|             ------------------------------------------------------------------------------------------------------------------|
|If the                                                       | Name __________________________________________________________ |
|person has    9. (1) Who is his usual Medical Attendant?     | Residence _____________________________________________________ |
|never                                                        | Has known him ________________ years.                           |
|required         (2) When was he last in professional atten- | Date of Attendance ____________________________________________ |
|Medical                                                      | Ailment _______________________________________________________ |
|attendance,  ------------------------------------------------------------------------------------------------------------------|
|the fact                                                     |   1st Friend.             |              2nd Friend.            |
|should be                                                    |                           | (if necessary: see marginal note to |
|stated, and  10. Mention an intimate friend, who is not in-  |                           |               Question.)            |
|reference        terested in this Assurance, to be referred  | Name ____________________ | ___________________________________ |
|given to         to for information as to health and habits  | Residence _______________ | ___________________________________ |
|TWO friends,     of life                                     | Profession or             |                                     |
|in answer to                                                 |   Occupation ____________ | ___________________________________ |
|Question 10.                                                 | Has known him _____ years | Has known him _____ years.          |
|             ------------------------------------------------------------------------------------------------------------------|
|If the                                                       | Name __________________________________________________________ |
|Proposal be  11. Name, &c., of the person in whose favour    | Profession or Occupation ______________________________________ |
|upon the         the Assurance is to be effected?            | Business Address ______________________________________________ |
|person's own                                                 | Residence _____________________________________________________ |
|life these   ------------------------------------------------------------------------------------------------------------------|
|enquiries    12. Is the pecuniary interest in the Life to be |                                                                 |
|need not be      Assured, which is the object of this        |                                                                 |
|answered.        Assurance, to the full amount thereof?      |                                                                 |
|-------------------------------------------------------------------------------------------------------------------------------|
|  Sum to be Assured £_____________________________              With or without Profits? _____________________________________ |
|  Is the Policy to be for Life? __________________              Are the premiums to be payable Yearly? _______________________ |
|     I do hereby declare that the above statements are true, and that this Proposal and Declaration shall be the basis of      |
|  the contract for effecting the above-mentioned Assurance, which Assurance is also conditional on the accuracy, in all        |
|  respects, of the statement for the Medial Officer, made, or to be made, by the person whose life is proposed for Assurance.  |
|  Date __________________________________        Signature of the Person in                                                    |
|                                                   whose favour the Assur-   _________________________________________________ |
|  Witness _______________________________          ance is to be effected.                                                     |
|  Address and Occupation ______________________________________                                                                |
---------------------------------------------------------------------------------------------------------------------------------

    The proposer has now to undergo one other
formality, disagreeable no doubt, but absolutely
necessary, and that is the medical examination.
This is done by the medical officer of the com-
pany who has to certify that the proposer is free
from any defect likely to shorten his natural life,
and that he is sound "in wind and limb."  Defi-
ciency in the number of the latter is, however,
not considered unsoundness, as a person with
one arm, or one leg, or one eye may be just as
good a "life" and therefore equally eligible for
insurance with him who is perfect.  All the en-
quiries in the form are made by the Office and
the expenses (including the doctor's fee) paid by
the Company.

    If the proposal is accepted, the proposer is
informed of the fact and then pays his first pre-
mium in advance, it may be a year's, or half-a-
year's, or a quarter year's, at his own option,
and he then becomes (subject to the rules of the
particular company) the insured.

    A few days subsequently a life policy will be
sent to the insured.  This is a document setting
forth, in full, the terms of the agreement between
the Company and the insured, and must be care-
fully kept, in such wise that it may readily be
discovered by the person for whose benefit it is
ultimately intended.  The writer once found
amongst some old papers a life policy in the
name of a man who had been dead for many
years.  On enquiry at the office it was found
that the amount which was payable at his death
had, by some neglect, never been claimed.
The company of course at once paid the money,
and a needy sister was very much benefited.

    Thirty days' grace are usually allowed for
subsequent payments of premium.  It is custo-
mary for insurance offices to forward to each
policy holder a reminder, from one to four weeks
before the periodical payments for premium
become due, but the absence of any such notice
will not be accepted as an excuse for non-pay-
ment, and if the premium be not paid before the
thirty days' grace allowed have expired, the
policy becomes void.  It may, however, be re-
vived upon paying a fine and producing a
medical certificate of health.

    Should the proposal be declined the fact will
be notified to the proposer, but he will not be
informed of the reason.  Proposals are rejected
because of something wrong being discovered by
the medical examiner, or because of intemperate
habits, or that the history of his near relations
in regard to health and longevity is unfavour-
able; anything in short that indicated that the
proposer will not, in all probability, live as long
as a healthy man is expected to live is enough
reason for declining to insure his life.

    Insurances may be effected for a limited period,
say for one, three, or five years, at about one half
the premium charged for the whole term of life.
If the insured dies within the period, the amount
of the policy is paid, but the insurance ends with
the periods of time agreed upon.  This class of
insurance is useful in many ways.  For example:
A person with a certain income for life is desir-
ous of borrowing £500, to be repaid by annual
instalments.  There would be no difficulty in
finding a lender, provided he could be sure of
repayment; and this could be secured in this
manner -- the borrower would assign to the lender
£100 a year of income for five years for the gra-
dual discharge of the loan; the borrower's life
would also be insured for five years and the
Policy assigned to the lender.  If the borrower
lived for five years the loan would be paid out of
the income.  In the event of his death, it would
be paid by means of the insurance money.

    Another example: a child aged seventeen is
entitled to a fortune, large or small, at the age
of twenty-one, but meanwhile is wholly depen-
dent on its mother who has only an annuity for
her life.  Should the mother die before the child
becomes of age the latter would be left without
the means of subsistence.  In such a case the
prudent mother would insure her own life for the
four years which must elapse before the child
could come into the fortune, for such a sum as
would keep it from want, so that in case the
mother died the insurance money would provide
the means of living.  The premium charged on
this class of insurance is moderate; about £2 6s.
for a person aged fifty; and the outlay by the
mother could be subsequently repaid when the
child was in a position to do so.

    There are other special modes of insurance to
prevent loss or damage in cases of remote risk;
indeed almost any chance of loss through the
possibility of something improbable occurring
may be guarded against by insurance.  For
instance, a lady aged forty-five has been married
for twenty years and has had no children.  If she
has a son her property will descend to him; if
she dies childless it passes to a nephew.  The
chance of the lady having a son is extremely
remote but still there is a possibility, and it is
against loss by this possibility happening that
the nephew takes out a policy of insurance for
any reasonable amount, the premium charged
being surprisingly small and payable in one sum
down.


    BONUSES.

    It has been mentioned in a previous page that
insurance has the advantage over the savings
bank, no matter how long a person may live,
and this is brought about by the operation of
Bonuses, so called.  These are the whole pro-
fits in the case of a Mutual Company, and the
larger proportion of the profits in the case of
a Joint-Stock Company, which are distributed
amongst the policy holders.  At the end of every
five years, in some cases seven, a valuation is
made of all the property of the Company and on
the other hand is ascertained what the company
is liable for, present and prospective.  The
difference between the two constitutes the sur-
plus or profits, assuming of course that the assets
preponderate.  This seems at first sight to be
a very simple process, but in reality the most
intricate calculations are necessary to arrive at
mathematical accuracy; but this needs no further
notice here.  The bonus being declared, it may
be dealt with in various ways.

    1. -- It may be added to the amount insured,
       and so payable at death.
    2. -- It may be commuted for an immediate
       payment in cash.  (In this case the amount
       will, of course, be less than in No. 1.)
    3. -- It may be applied in a permanent reduc-
       tion of the future annual premiums, or a
       proportionately larger reduction of these for
       the next five or seven years, and in other
       ways.  Most offices granting every reason-
       able facility for applying profits in any way
       the insured may consider desirable.

    _Endowment Insurance_. -- This is a class of
insurance by which an insurer may receive the
amount of a policy himself during his life, at
an age to be fixed at the time the insurance is
effected.  Should he die before reaching the age
specified, the money is payable to his represen-
tatives.

    It may also be so arranged that instead of
receiving the money at a certain age, he may be
paid a fixed sum annually for the rest of his life
thereafter.

    For example -- a person at the age of thirty
may insure £1,000 to be paid to him on attain-
ing the age of sixty.  The annual premiums for
insurances of this kind vary with different offices;
but they can be effected at the age named, at
about £28 10s. for the £1,000.  If the person
died before attaining the specified age, the money
would be paid to his representatives; if he sur-
vived, he could either receive the £1,000, or be
granted an annuity for the remainder of his life
of £92 a year.  In the case of females the
annuity would be £83 only, as they are supposed
to live longer than males.

    _Non-forfeitable Policies_. -- This plan provides
for the continuance of insurance upon the life of
a policy holder should the insured from any cause
be unable to keep up his premiums.  The prin-
ciple of this scheme ensures that, in considera-
tion of the premiums already paid, a policy for
a certain amount -- less of course than that named
in the original policy, which would be cancelled
-- would be granted freed from all future pay-
ments in respect of premiums, and the insurance
money of the new policy would be payable at
death.  For example -- a person insures his life
for £1,000 at the age of thirty, the annual pre-
mium on which would be £25 a year.  At the
age of forty he finds himself unable any longer
to pay the annual premium, but to avoid the
loss of the £250 which he has paid during the
ten years, he will surrender the old policy for
£1,000 and will be granted a new one, say for
half the amount, payable at death, and he will
not be called upon to pay any further premiums.

    _Settlement Policies_. -- This class of policy is
issued under the Married Women's Property
Act (1882), whereby a trust can be created for
the benefit of a wife or children of an insured
person, the trustee being the Insurance Com-
pany.  The advantage of this is that such a
policy does not constitute a part of the husband's
estate or become subject to his debts, either
whilst living or at his death, so that in the
latter event the money is paid to the widow or
children direct for their own use.  A policy of
this kind, if necessity should arise, could also be
exchanged for a non-forfeitable policy in the
manner before pointed out.

    _Endowments for Children_. -- A parent, by paying
a premium of about £5 5s. annually, can secure
to a child aged six a sum of £100, on its attain-
ing the age of twenty-one.  Should the child die
before reaching that age, the money paid in pre-
miums is not lost, for it is all returned to the
parent without deduction.

    By this means a marriage portion or outfit for
a girl, or a start in business for a boy can be
provided to any amount that may be desired.

    _Insurance on Joint Lives_ is another mode of
insurance, very useful in particular cases.  For
example: a mother aged fifty has an income,
for her life and no longer, of £300 a year, and
she has a daughter aged twenty, who has no
means of her own, present or prospective, being
entirely dependent on her mother.  The joint
lives are insured for, say, £2,000, which would
cost in premium £100 a year; the insurance
money to be paid at the death of the first of the
two.  If the daughter died first the mother would
get back, by the insurance money, possibly
more than she had paid in premiums.  If the
mother died first, say at the age of seventy, by
that time the daughter would have attained the
age of forty, and the £2,000 would be paid to
her.  With the money she might, if she so
pleased, buy an annuity for life of £110 a year.

    _Insurance on the Longest of Two Lives_, payable
on the death of the survivor, is useful in cases
where land or house property is held on lease,
so that there may be no pecuniary loss when the
lease expires.  The rate of premium is in this
case naturally less than where the insurance is
to be paid on the earlier of the two deaths.


    SURRENDERS.

    If from any cause it is desired to give up a
policy and discontinue paying any more pre-
miums, the offices will pay to the insured what
is called the surrender value of the policy, at the
same time cancelling it and all its conditions.
This surrender value may be roughly calculated
at about 40 per cent. of the premiums paid, in a
case were bonuses have been added to a policy,
and about 33 per cent. of the premiums paid in
a case where the bonuses have not been so
applied.  For example: a person has paid £25
a year in premiums for ten years -- in all £250 --
on a policy for £1,000, to which has been added
£60 in the shape of bonuses.  The surrender
value in such a case would be £100.  But if the
insured had taken his bonuses in cash, or his
policy did not carry profits, then the surrender
value would be £82 10s. only.

    Any insurance office will lend the insured, on
the security of the policy, an amount of money
not exceeding the surrender value, and the rate
of interest is usually moderate.

    In this case there would be no necessity to
abandon the policy, which would be kept alive
and increased by added bonuses as before.


    FIRE INSURANCE.

    This is a distinct branch of insurance business,
the object being to compensate a person in case
of pecuniary loss through the accidental burning
of his property.  By paying annually a com-
paratively small amount in the shape of pre-
mium, a person may insure that in case of the
destruction by fire of such of his goods as may
be specified in a fire policy, issued by the Insur-
ance Company, he will be recouped their value.
Nearly all the Fire Insurance offices are agreed
in charging a certain rate of premium, which is
called the tariff rate.  For dwelling-houses built
of brick or stone with slate or tile roof, the rate
is only 1s. 6d. for every £100.  For more hazard-
ous buildings such as thatched houses, ware-
houses, inns, shops, &c., the rates are higher,
according to the nature of the risk.  Household
furniture and the other contents of a brick or
stone house can be insured at various rates, or
they may be included in one insurance with the
house, when the rate would be 2s. per cent. for
the whole.

    It should be remembered that there is a limit,
usually of 5 per cent., of the whole sum so in-
sured, placed on any one work of art which may
be destroyed.

    For instance, a picture valued at £200 maybe
burnt in a house which, with the contents, is
insured for £2,000  If the picture were alone
destroyed, the office would only compensate to
the extent of £100, being 5 per cent. on the
£2,000, the total amount of the insurance.  Any
particular picture or work of art may, however,
be specially insured by itself.

    Insurances should never be made for a greater
sum than the value of the property insured, as it
would be paying more premium for no purpose.
The offices take good care that they pay no more
than the actual value of the property destroyed,
which they have the means of ascertaining with
some degree of accuracy.

    It has been found necessary to subject the
insurance of farming stock to special conditions.
A farmer having stock of the value, say, of
£1,000, might reason in this way: "My ricks,
implements, crops, &c., are situated widely
apart, and it is difficult to imagine that all could
be consumed in one and the same fire; therefore,
I will insure the whole stock for £500 only, then
I shall have to pay only half the amount in the
premium I should be liable for in case I insured
to the full value."  The offices are, however, quite
alive to this kind of reasoning, and frustrate
the intention by inserting what is called the
"average" clause in the policy, the effect of
which is that in the event of a claim being made
for loss by fire, only one half of the value would
be made because only one half of the value of the
stock was insured.  Live stock, however, may be
separately insured without the average clause,
and animals killed by lightning are paid for if
insured against loss by fire.

    There are other offices which insure against
loss by special contingencies, such as damage to
glass houses, and cattle, and garden produce, by
hailstorms; destruction of boilers by explosion,
of plate glass, and from accident or disease
affecting cattle.  There are companies, too, which
insure against accidents sustained by rail, road,
or water, guaranteeing a specified sum in case of
death, and compensation in case of injury.  Also
societies which take the place of sureties and
guarantee an insurer against loss or default by
anyone in his employ; and companies which
undertake to make good any loss arising from
burglary or larceny.  In all cases, of course,
the liability of the office is limited to a certain
declared amount.



CHAPTER X.
BUILDING SOCIETIES.

THE main object of a Building Society is to aid
a man to become proprietor of his own dwelling.
This can be accomplished by means of the society
in two different ways:- 1, by depositing with
the society periodical money savings until, with
the interest allowed, enough has been accumu-
lated to buy a house; 2, by borrowing from the
society a sufficient sum to purchase a house
and repaying the loan, with interest, by instal-
ments spread over a term of years.  A person
desiring to become a depositor must qualify for
membership of the society by paying an entrance
fee of; say, 2s. 6d.  He then takes up a share and,
by paying periodical instalments according to
the tables, he becomes entitled at the end of the
appointed time to receive £100.

    The same applies proportionately to a half
share of £50 or to a quarter share of £25.  For
example, as regards the whole share, a person
paying 13s. a month regularly to the society is
entitled, at the end of ten years, to be repaid a
lump sum of £100, and any bonus added thereto
which the profits of the society may afford.  If the
term be fifteen years, then, to secure £100, he will
have to pay only 7s. 7d. every month, and if
twenty-one years, then a monthly payment of
4s. 7d.  The terms vary in different societies,
but those quoted have been adopted by an exist-
ing institution of repute.  If the term of ten
years is selected, the depositor will have saved
and paid to the society (with added interest) £78
in all; if the term of fifteen years is chosen he
will have paid £68 5s. in all; and if twenty-one
years be adopted, £57 15s.  In either case, at the
end of the term he has selected, the depositor
will be paid back £100.  Thus any one taking
a share for £100, and keeping up the instalments
for twenty-one years, will in the end have paid
only £57 15s. for it -- the difference being met
by the interest paid by borrowers from the
society.  The following table shows particulars
of other terms and the monthly subscription
payable:-

-----------------------------------------------
| Term | Monthly Sub-  | Term | Monthly Sub-  |
|  of  |scription for a|  of  |scription for a|
|Years.|  £100 share.  |Years.|  £100 share.  |
|------|---------------|------|---------------|
|      |    £ s. d.    |      |    £ s. d.    |
|   3  |    2 12 10    |  13  |    0  9  1    |
|   4  |    1 18  8    |  14  |    0  8  4    |
|   5  |    1 10  2    |  15  |    0  7  7    |
|   6  |    1  4  6    |  16  |    0  6 11    |
|   7  |    1  0  6    |  17  |    0  6  4    |
|   8  |    0 17  6    |  18  |    0  5 10    |
|   9  |    0 15  2    |  19  |    0  5  4    |
|  10  |    0 13  0    |  20  |    0  5  0    |
|  11  |    0 11  8    |  21  |    0  4  7    |
|  12  |    0 10  6    |      |               |
-----------------------------------------------

    After the first year a depositor may, if desirous,
withdraw, on giving one month's notice, the full
amount he has paid, with interest, to the date
when the subscription ceases.  This prevents
the possibility of any loss arising to a depositor
in the event of his being unable to keep up his
instalments, or desiring from any cause to with-
draw from the society.  It may, however, in case
of a loss of confidence, operate seriously against
the society, by the sudden withdrawal of de-
posits.  The following table shows the amount
that could be claimed, in respect of the monthly
subscriptions paid, at the end of the several
years of membership.


                            SHOWING THE AMOUNT WITHDRAWABLE AT THE END OF EACH YEAR FOR THE
                               RESPECTIVE MONTHLY SUBSCRIPTIONS STATED IN THE ABOVE TABLE.
------------------------------------------------------------------------------------------------------------------------
| At the |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |          |          |          |          |          |
| end of |  2 12 10 |  1 18  8 |  1 10  2 |  1  4  6 |  1  0  6 | 17s. 6d. | 15s. 2d. |   13s.   | 11s. 8d. | 10s. 6d. |
|Year of |    per   |    per   |    per   |    per   |    per   |    per   |    per   |    per   |    per   |    per   |
|  Mem-  |   month, |   month, |   month, |   month, |   month, |   month, |   month, |   month, |   month, |   month, |
|bership.|  3 years.|  4 years.|  5 years.|  6 years.|  7 years.|  8 years.|  9 years.| 10 years.| 11 years.| 12 years.|
|--------|----------|----------|----------|----------|----------|----------|----------|----------|----------|----------|
|        |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |
|   1st  | 31 14  0 | 23  4  0 | 18  2  0 | 14 14  0 | 12  6  0 | 10 10  0 |  9  2  0 |  7 16  0 |  7  0  0 |  6  6  0 |
|   2nd  | 64 19  0 | 47 11  0 | 37  2  0 | 30  2  8 | 25  4  2 | 21 10  6 | 18 13  1 | 15 19  9 | 14  7  0 | 12 18  3 |
|   3rd  |100  0  0 | 73  2  0 | 57  1  2 | 46  6 10 | 38 15  6 | 33  2  0 | 28 13  9 | 24 11  9 | 22  1  4 | 19 17  2 |
|   4th  |    --    |100  0  0 | 78  0  2 | 63  7  2 | 53  0  2 | 45  5  1 | 39  4  5 | 33 12  4 | 30  3  5 | 27  3  0 |
|   5th  |    --    |    --    |100  0  0 | 81  4  6 | 67 19  2 | 58  0  4 | 50  5  8 | 43  1 11 | 38 13  7 | 34 16  2 |
|   6th  |    --    |    --    |    --    |100  0  0 | 83 13  2 | 71  8  4 | 61 17 11 | 53  1  1 | 47 12  3 | 42 17  0 |
|   7th  |    --    |    --    |    --    |    --    |100  0  0 | 85  9  9 | 74  1 10 | 63 10  1 | 56 19 10 | 51  5 10 |
|   8th  |    --    |    --    |    --    |    --    |    --    |100  0  0 | 86 17 11 | 74  9  7 | 66 16 10 | 60  3  1 |
|   9th  |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 | 86  0  1 | 77  3  8 | 69  9  3 |
|  10th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 | 88  0 10 | 79  4  9 |
|  11th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 | 89  9 11 |
|  12th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 |
|  13th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  14th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  15th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  16th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  17th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  18th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  19th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  20th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
|  21st  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |
------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------
| At the |          |          |          |          |          |          |          |          |          |
| end of |  9s. 1d. |  8s. 4d. |  7s. 7d. | 6s. 11d. |  6s. 4d. | 5s. 10d. |  5s. 4d. |    5s.   |  4s. 7d. |
|Year of |    per   |    per   |    per   |    per   |    per   |    per   |    per   |    per   |    per   |
|  Mem-  |   month, |   month, |   month, |   month, |   month, |   month, |   month, |   month, |   month, |
|bership.| 13 years.| 14 years.| 15 years.| 16 years.| 17 years.| 18 years.| 19 years.| 20 years.| 21 years.|
|--------|----------|----------|----------|----------|----------|----------|----------|----------|----------|
|        |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |  £ s. d. |
|   1st  |  5  9  0 |  5  0  0 |  4 11  0 |  4  3  0 |  3 16  0 |  3 10  0 |  3  4  0 |  3  0  0 |  2 15  0 |
|   2nd  | 11  3  5 | 10  5  0 |  9  6  5 |  8 10  2 |  7 15 10 |  7  3  5 |  6 11  3 |  6  3  0 |  5 12  9 |
|   3rd  | 17  3  8 | 15 15  2 | 14  6  8 | 13  1  5 | 11 19  7 | 11  0  5 | 10  1  9 |  9  9  1 |  8 13  5 |
|   4th  | 23  9  9 | 21 11  0 | 19 11 10 | 17 17  5 | 16  7  7 | 15  1  5 | 13 15 10 | 12 18  7 | 11 17  1 |
|   5th  | 30  2  3 | 27 12  6 | 25  2  3 | 22 18  3 | 20 19 11 | 19  6  5 | 17 13  8 | 16 11  6 | 15  3 11 |
|   6th  | 37  1  5 | 34  0  3 | 30 18  3 | 28  4  0 | 25 16 11 | 23 15  8 | 21 15  4 | 20  8  1 | 18 14  1 |
|   7th  | 45  4  2 | 40 14  2 | 37  0  0 | 33 15  3 | 30 18  9 | 28  9  3 | 26  1  1 | 24  8  6 | 22  7 10 |
|   8th  | 53 18  9 | 49  8  3 | 44 18  0 | 40 19 10 | 36  5  8 | 33  7  8 | 30 11  1 | 28 12 11 | 26  5  2 |
|   9th  | 62  2  4 | 56 17  8 | 51 13 10 | 47  3  8 | 43  3  5 | 39 14 10 | 35  5  8 | 34  2  7 | 30  6  5 |
|  10th  | 70 13  5 | 64 14  6 | 58 16  5 | 53 13  8 | 49  2  7 | 45  4  5 | 41  7  5 | 38 16  8 | 34 11  9 |
|  11th  | 79 13  1 | 72 19  4 | 66  6  3 | 60 10  3 | 55  7  9 | 50 19  8 | 46 12 10 | 43 15  7 | 40  1  5 |
|  12th  | 89  1  9 | 81 12  4 | 74  3  5 | 67 13  8 | 61 19  1 | 57  0  5 | 52  3  5 | 48 19  5 | 44 16  5 |
|  13th  |100  0  0 | 90 16  8 | 82  8  5 | 75  4  2 | 68 17  0 | 63  7  5 | 57 19  7 | 54 10  0 | 49 16  3 |
|  14th  |    --    |100  0  0 | 91  1  9 | 83  2  5 | 76  1 10 | 70  0  8 | 64  1  6 | 60  0  0 | 55  1  1 |
|  15th  |    --    |    --    |100  0  0 | 91  8  5 | 83 13 11 | 77  0 ___| 70  9  7 | 65 18  8 | 60 11  1 |
|  16th  |    --    |    --    |    --    |100  0  0 | 91  8  5 | 84  7  8 | 77  4  0 | 72  3  5 | 66  6  8 |
|  17th  |    --    |    --    |    --    |    --    |100  0  0 | 92  1 10 | 84  5  3 | 78 14  5 | 72  8  0 |
|  18th  |    --    |    --    |    --    |    --    |    --    |100  0  0 | 91 13  6 | 85 11 11 | 78 15  5 |
|  19th  |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 | 92 16  4 | 85  9  2 |
|  20th  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 | 92  9  8 |
|  21st  |    --    |    --    |    --    |    --    |    --    |    --    |    --    |    --    |100  0  0 |
-------------------------------------------------------------------------------------------------------------

    For example, the depositor of 13s. a month
for a ten years' term, if he desired to withdraw
his savings at the end of six years, would be
entitled to £53 1s. 1d.; the depositor of 7s. 7d. a
month for fifteen years could claim, at the end of
the ninth year, £51 13s. 10d.; and the depositor
of 4s. 7d. a month for twenty-one years could
get back £44 16s. 5d. at the expiration of the
twelfth year.  In each case the earnings of the
depositor would have been increased by the
interest added.


    BORROWERS.

    A member desiring to effect an immediate
purchase of a house or property may borrow the
money required by depositing the title deeds
with the society as security, and repaying the
loan by instalments, monthly or quarterly.
Or if he elect to build a house himself; he
deposits the deeds of the land with the society
and takes up a loan by instalments as the work
proceeds.  In this case an architect or surveyor
would have to give a certificate from time
to time to the effect that so much money could
be advanced upon the work actually done; and
the repayment of the loan would only begin
when the house was finished.  The following
table shows the repayments required, including
interest for each £100 advanced:-

--------------------------------------------
| Term of years. |  Monthly.  | Quarterly. |
|----------------|------------|------------|
|                |   £ s. d.  |   £ s. d.  |
|        1       |   8 14  0  |  26  4  6  |
|        2       |   4 10  0  |  13 11  4  |
|        3       |   3  3  0  |   9  9 11  |
|        4       |   2  8  9  |   7  7  0  |
|        5       |   2  0  3  |   6  1  4  |
|        6       |   1 14  7  |   5  4  3  |
|        7       |   1 10  6  |   4 12  0  |
|        8       |   1  7  6  |   4  2 11  |
|        9       |   1  5  2  |   3 15 11  |
|       10       |   1  3  5  |   3 10  7  |
|       11       |   1  1 11  |   3  6  1  |
|       12       |   1  0  8  |   3  2  4  |
|       13       |   0 19  8  |   2 19  4  |
|       14       |   0 18  9  |   2 16  6  |
|       15       |   0 18  0  |   2 14  3  |
|       16       |   0 17  4  |   2 12  3  |
|       17       |   0 16  9  |   2 10  6  |
|       18       |   0 16  2  |   2  8  9  |
|       19       |   0 15  8  |   2  7  3  |
|       20       |   0 15  3  |   2  6  0  |
|       21       |   0 14 11  |   2  5  0  |
--------------------------------------------

    And in like proportion for larger or smaller
loans.

    In many societies it is a common practice to
ballot amongst the members for the right to
receive an advance (sometimes without carrying
interest) which right may be transferred, for a
consideration, to some other member.

    By this table it will be seen that a person
borrowing £100 for ten years would have to
repay the amount by monthly instalments of
£1 3s. 5d., or by quarterly instalments of
£3 10s. 7d., and if borrowing for a term of
twenty-one years, then by monthly instalments
of 14s. 11d., or quarterly of £2 5s.

    Now, if we refer to the depositor's table of
rates, we shall find that he has, for a ten years'
term, paid to the society £78, and received back
£100; thus receiving from the society £22 (the
difference) for the use of the money, plus the
interest added.  On the other hand, a borrower
of £100 for the same term pays back, beyond
the capital sum of £100, as much as £40 2s. in
interest.  Thus there is a difference of £18 2s.
between the interest received by the depositor
and that paid by the borrower.  This constitutes
the gross gain of the society on these trans-
actions, but out of it has to be paid the expenses
of the office, salaries of officials, and a reserve
provided for bad debts, &c.

    The social and moral utility of societies estab-
lished for the direct purpose of aiding a man to
become proprietor of his dwelling-house is obvi-
ous, and the above calculations seem to show
that a society conducted on the plan represented
would earn an ample margin of profit for all
contingencies.

    Doubtless the greater number of the existing
building societies, including the one whose
figures have been quoted, are conducted in a safe
and legitimate manner, but there have been, and
may still be, exceptions.

    As an inducement to join a building society,
people are told that they have to pay, on the
instalment system, the same as though they paid
the rent of a house, and in a few years will
become the owner.  A man who has paid for
three or four years only what he would have paid
for rent, would have very little hesitation in
throwing up his contract with the society, if the
locality became objectionable to him or the in-
evitable repairs of a cheap house were more than
he could bear.  The money borrowed is lent
chiefly upon the security of small suburban
houses, a kind of property always in course of
depreciation, and it may be that the society
would have returned upon its hands a number of
houses in a bad state of repair and in a dete-
riorating locality.  The instalments having ceased
and the houses void, the property becomes a
profitless burden upon the society and a probable
ultimate loss.  When "jerry" builders are large
customers of a building society and have some
influence, direct or indirect, with its Board of
Directors, the evil is greatly aggravated.  Whole
streets are built with borrowed money, on specu-
lation until, perhaps, there are twice as many
houses as can possibly be let.

    The society, to protect itself, is bound to con-
tinue advancing until it is drawn completely into
the net and finds itself encumbered with a lot of
unsaleable and useless property.  To stave off
the evil day when all things must be disclosed
to the trusting member, "financing" is restored
to, money raised on direct deposit, and advances
obtained from banks.  The money thus raised
tides the society over their difficulties for a time,
but it may be that some rumour or report influ-
ences members and depositors to withdraw their
money, and eventually the coffers are empty and
the end arrives.

    Unhappily, in the collapse of more than one
building society during the last few years there
have been revealed frauds and dishonesty of the
most flagrant character, and hundreds of trusting
investors of the industrial classes have been
ruined through the machinations of scoundrels,
some of whom posed as philanthropists and ultra
righteous members of society.  To protect the
interests of members and depositors, only men
of unimpeachable character and business ability
should be elected Directors of a building society,
and the audit ought to be of the strictest char-
acter.  The balance-sheet should present details
of the securities upon which the advances are
made, and the auditors should certify that they
have examined the deeds and identified them
as representing the property described in the
balance-sheet.  Generally speaking, the auditors
appointed by the members are not lawyers, and
have not the necessary skill for verifying the
documents relating to the property, indeed they
are not expected to do so.  One of the auditors
should certainly be legally qualified to ascertain
that the securities of the society do represent the
properties set forth in the balance-sheet, and he
should give a certificate to that effect.  If this
course were insisted upon, such scandals as have
been brought to light could hardly be repeated,
where one set of deeds was made to do duty for
the assets of three distinct societies, each man-
aged by the same Board of Directors; and the case
in which the deeds of abandoned or destroyed
property were palmed off upon the auditors to
represent securities which had practically no
existence.  The industrial classes are less careful
than those above them in seeing to the safety of
their investments, and some legislation seems to
be called for to prevent their hard-earned savings
being frittered away by bad management or rank
dishonesty.



CHAPTER XI.
THE POST OFFICE SAVINGS BANK.

THIS institution offers a most admirable, con-
venient, and secure depository for the savings of
the industrial classes and of others.  Its value
to the thrifty and timid investor is incalculable,
for here he may rest satisfied that he has abso-
lute security, and the system is so hedged about
with safeguards that it is difficult to discover
any means by which loss can be sustained.  The
interest allowed is not high, but reasonable
enough when the perfect security and the facili-
ties offered are taken into consideration.

    Money may be deposited by any person over
seven years of age, and by anyone on behalf of
children under seven.  Also by married women,
and with this advantage, that such deposits,
unless and until the contrary is proved, are
deemed to be the property of such married
woman; moreover, the fact that any deposit is
standing in the name of a married woman
being _prima facie_ evidence that she is entitled
to draw the same without the consent of her
husband.

    Deposits may be made by two or more per-
sons, provided no one of them has any other
account in a Savings Bank, and by one person
as trustee for another person.  On opening an
account a person has to sign a declaration to the
effect that he takes no personal benefit from any
other account in the Post Office Savings Bank
or in a Trustee Savings Bank, and should this
declaration not be true all sums so deposited
will be liable to forfeiture.

    Any person opening an account, that is, de-
positing money with a Post Office Savings Bank,
will receive a book in which the amount is
entered, and the signature of the Postmaster and
stamp of the office affixed to the entry.  In
addition to this he will receive from the depart-
ment in London, a few days after, a receipt for
the amount.  Once in each year, on the anni-
versary of the day on which his first deposit was
made, the depositor should forward his book to
the Controller of Savings Banks, London, in
order that it may be compared with the books
of the department in London, and that the in-
terest may be inserted in it.  A depositor may
add to his deposits at, and withdraw the whole
or any part of them from, any Post Office in the
United Kingdom without change of deposit-
book.  It will thus be obvious that all deposit
accounts, although operated upon through the
branch post office, are really kept at the Savings
Bank Department in London, and depositors
are so kept in touch with the department that
complete protection is afforded them.

    Any sum from one shilling upwards (but
excluding pence) may be deposited, subject to
certain limits.  These limits are £50 a year, that
is, no more than £50 will be received on deposit
in any one year, but any withdrawals during the
year may be re-deposited once, and once only.
No more than £200 in all can be held on behalf
of a depositor.  The reason for these limits
apparently is that the bank was created for the
encouragement of saving habits in, and providing
a secure place for, the money of thrifty people
of small means, and not for investment of the
capital of the wealthy.  Interest at £2 10s. per
cent. per annum, which is at the rate of sixpence
a year, or one halfpenny a month, for each com-
plete pound, is allowed on ordinary deposits and
added to the principal; but when, by the addi-
tion of interest or from any other cause, the
deposit is raised to above £200, interest is
allowed on £200 only, and the excess over that
sum, when it amounts to £5, is applied to the
purchase of Government Stock, unless the de-
positor desires otherwise.  When a person has
£200 to the credit of his deposit account, he
cannot make any further addition thereto, but
the Post Office will invest this sum, or any part
of it, for the depositor in Government Stock, and
he can then continue paying in money to his
account as before until the sum again reaches
£200.  No more than £200 Government Stock
can be purchased in any one year, and the total
amount of stock standing in a depositor's ac-
count at any one time must not exceed £500.
The dividends or interest on any Government
Stock is credited periodically to the holder's
ordinary deposit account.  When a depositor
wishes to withdraw the whole or any part of his
money, he has to fill up and forward to the
Savings Bank Department in London, a notice
of withdrawal, and a form for the purpose may
be obtained at any Post Office Savings Bank.
He will then receive by post a warrant, on pre-
sentation of which, at any branch Post Office he
may have selected, payment will be made.  Pay-
ment by a warrant may be made to another
person on behalf of the depositor, provided the
latter signs a form of authority for the purpose,
which form may be obtained at any Post Office
Savings Bank.

    A depositor of the age of sixteen and upwards
may nominate any person to receive any sum
(not exceeding £100) due to such depositor at
his death.  Every nomination must be in writing
on the proper form, which may be obtained from
the Controller of the Savings Bank Department,
in London, to whom the nomination must be
sent during the depositor's life-time.

    Where, at the time of the depositor's death,
the amount standing to his credit exceeds £100,
it will be necessary, in order to obtain payment,
that probate of his will, if any, or letters of
administration (if he has died intestate), should
be obtained in the usual manner.

    Where the whole amount standing to the
credit of a depositor at the time of his death,
inclusive of Government Stock, does not exceed
£100, in default of a nomination, or probate,
or letters of administration, payment may be
made:-

      To any person who has paid the funeral
    expenses of the depositor;
      To creditors of the depositor;
      To the widow or widower of the depositor;
      To the persons entitled to the effects of
    the deceased according to the Statute of
    Distribution.
      To any other person establishing, to the
    satisfaction of the Postmaster General, a
    claim in accordance with the Statutes and
    Regulations relating to the Post Office
    Savings Bank.

    The salient points of the Post Office Savings
Bank have been placed before the reader, but in
connection with the system there is another
organization, for the purpose of purchasing
Government Annuities and effecting Life Insur-
ance, of so varied and elaborate a character that
every possible requirement seems to be provided
for.  The "Post Office Guide," which is pub-
lished quarterly, contains voluminous tables and
explanations in respect of this organization, and
full details and clear directions for the guidance
of the public in regard to the Savings Bank.

    The growing success which attends these
several institutions is an unmistakable indica-
tion of the value set upon them by the people.
The prudent and thrifty have not been slow to
take advantage of the benefits they offer, not the
least of which are the freedom from doubt and
anxiety they enjoy as to the safety of their
money, and the certainty felt that, though other
concerns may fall and involve their victims in
ruin, here there is absolute and permanent
security.



APPENDIX



TABLE OF INTEREST ON INVESTMENTS.
Showing how the rate of interest actually received varies
according to the amount paid for the Stock.

_Example._ -- If a purchaser gives £88 for £100 6% stock, he will find
that the rate of interest on the sum invested is £6 16s. 6d., being the
amount in the column headed 6%, opposite to 88 in the first column.

----------------------------------------------------------------------
|Price|        |        |        |        |        |        |        |
| per |   3    |   4    |  4 1/2 |   5    |  5 1/2 |   6    |   7    |
|£100.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.|
|-----|--------|--------|--------|--------|--------|--------|--------|
|  £  | £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.|
| 125 | 2  8  0| 3  4  0| 3 12  0| 4  0  0| 4  8  0| 4 16  0| 5 12  0|
| 120 | 2 10  0| 3  6  8| 3 15  0| 4  3  4| 4 11  8| 5  0  0| 5 16  8|
| 115 | 2 12  2| 3  9  7| 3 18  3| 4  7  0| 4 15  8| 5  4  4| 6  1  9|
| 110 | 2 14  6| 3 12  9| 4  1  9| 4 10 11| 5  0  0| 5  9  0| 6  7  3|
| 105 | 2 17  2| 3 _6_ 2| 4  5  9| 4 15  3| 5  4  9| 5 14  4| 6 13  4|
|  98 | 3  1  3| 4  1  8| 4 12 10| 5  2  0| 5 12  2| 6  2  6| 7  2 10|
|  96 | 3  2  6| 4  3  4| 4 13  9| 5  4  2| 5 14  4| 6  5  0| 7  5 10|
|  94 | 3  3  9| 4  5  0| 4 15  7| 5  6  4| 5 17  0| 6  7  6| 7  8 10|
|  92 | 3  5  3| 4  7  0| 4 17 10| 5  8  9| 5 19  7| 6 10  6| 7 12  3|
|  90 | 3  6  8| 4  8 10| 5  0  0| 5 11  1| 6  2  3| 6 13  4| 7 15  7|
|  88 | 3  8  3| 4 10 10| 5  2  4| 5 13  7| 6  5  0| 6 16  6| 7 19  0|
|  86 | 3  9  9| 4 13  0| 5  4  7| 5 16  3| 6  7 11| 6 19  6| 8  2  9|
|  84 | 3 11  6| 4 15  4| 5  7  3| 5 19  1| 6 11  0| 7  3  0| 8  6  9|
|  82 | 3 13  1| 4 17  6| 5  9  7| 6  2  0| 6 14  2| 7  6  3| 8 10  7|
|  80 | 3 15  0| 5  0  0| 5 _7_ 6| 6  5  0| 6 17  6| 7 10  0| 8 15  0|
|  78 | 3 17  6| 5  2 10| 5 15  8| 6  8  7| 7  1  6| 7 14  3| 9  0  0|
|  76 | 3 18 10| 5  5  2| 5 18  4| 6 11  6| 7  4  7| 7 17  8| 9  3 11|
|  74 | 4  1  0| 5  8  0| 6  1  6| 6 15  0| 7  8  6| 8  2  0| 9  9  0|
|  72 | 4  3  4| 5 11  1| 6  5  0| 6 18 11| 7 12  9| 8  6  8| 9 14  5|
|  70 | 4  5  9| 5 14  3| 6  8  7| 7  2 10| 7 17  6| 8 14  3|10  0  0|
|  68 | 4  8  1| 5 17  6| 6 12  2| 7  7  0| 8  1  9| 8 16  3|10  5  9|
|  66 | 4 10  0| 6  0  0| 6 15  0| 7 10  0| 8  5  0| 9  0  0|10 10  0|
|  64 | 4 13  9| 6  5  0| 7  0  8| 7 16  3| 8 11 10| 9  7  6|10 18  9|
|  62 | 4 16  9| 6  9  0| 7  5  1| 8  1  3| 8 17  4| 9 13  6|11  5  9|
|  60 | 5  0  0| 6 13  4| 7 10  0| 8  6  8| 9  3  4|10  0  0|11 13  4|
|  58 | 5  3  5| 6 17 10| 7 15  1| 8 12  4| 9  9  7|10  6 10|12  1  4|
|  56 | 5  7  1| 7  2 10| 8  0  8| 8 18  6| 9 16  4|10 14  3|12 10  0|
|  54 | 5 11  9| 7  8  0| 8  6  9| 9  5  0|10  4  3|11  2  0|12 19  0|
|  52 | 5 15  3| 7 13  6| 8 12 10| 9 12  3|10 11  4|11 10  6|13  9  0|
|  50 | 6  0  0| 8  0  0| 9  0  0|10  0  0|11  0  0|12  0  0|14  0  9|
|  48 | 6_15_ 0| 8  6  8| 9  7  6|10 12  6|11  9  0|12  5  0|14 11  8|
|  46 | 6 10  4| 8 13 10| 9 15  0|10 17  4|11 19  0|13  0  0|15  4  2|
|  44 | 6 16  1| 9  1 10|10  4  6|11  1  9|12 10  0|13 12  9|15 18  2|
|  42 | 7  2  9| 9 10  2|10 19  3|11 18  0|13  2  0|14  5  3|16 13  4|
|  40 | 7 10  0|10  0  0|11  5  0|12 10  0|13 15  0|15  0  0|17 10  0|
|  36 | 8  6  8|11  2  2|12 10  0|13 17  9|15  5  0|16 13  4|19 15  7|
|  32 | 9  7  6|12 10  0|14  1  3|15 12  6|17  3  9|18 15  0|21 17  6|
|  30 |10  0  0|13  6  8|15  0  0|16 13  4|18  6  8|20  0  0|23  6  8|
|  26 |11 10  0|15  7  9|17  6  3|19  5  0|21  3  6|23  1  6|26 18  6|
|  20 |15  0  0|20  0  0|22 10  0|25  0  0|27 10  0|30  0  0|35  0  0|
|  15 |20  0  0|26 13  4|30  0  0|33  6  8|36 13  4|40  0  0|46  0  0|
|  10 |30  0  0|40  0  0|45  0  0|50  0  0|55  0  0|60  0  0|70  0  0|
----------------------------------------------------------------------



EXAMPLES OF BUSINESS COMMUNICATIONS.


CORRESPONDENCE.

(Sending Money by Post.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       Please place the amount of the enclosed cheques and
    notes to the credit of my account and acknowledge receipt
    to
                                 Yours faithfully
                                          JANE SMITH.

       Cheque £20 0 0
       Notes  £45 0 0
              -------
              £65 0 0


(Requiring Money.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I shall be obliged by your sending me under registered
    cover to the above address £15 in £5 Bank of England
    notes for which I enclose my cheque.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Acknowledging Receipt.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I have to acknowledge with thanks the receipt of £15
    in bank notes.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Transfer to Deposit Account)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I shall be obliged by your transferring £300 from
    my current account to a deposit account and forwarding
    me the receipt.
       I enclose a cheque for the amount.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Arranging for Cheque to be Honoured by
Another Bank.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I shall be obliged if you will advise your Branch
    _(or some other Bank)_ at Liverpool to pay me £20 on
    application.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Request for Passport and Circular Notes.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I propose during the next two or three months to travel
    on the Continent accompanied by my niece, Miss Lucy
    Smith, and my maid, Jane Parker.  Will you kindly obtain
    a passport for us and also forward me £100 in circular
    notes, for which I enclose my cheque.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Ordering Letter of Credit to Remit.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I desire to send £120 to John Smith, residing near
    Winnipeg, in North America; and shall be obliged if
    you will send me the necessary form to remit to him so that
    he may obtain the money without difficulty or delay.
                                 Yours faithfully
                                          JANE SMITH.

       _N.B. -- Remittances in this way can be sent to almost
    every town in the civilised world._


(Remitting in this Country.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I shall be obliged by your advising your Branch Bank
    (or some other Bank) in Leeds, to pay George Jones on
    application the sum of £54, for which I enclose a cheque
    and a specimen of Mr. Jones's signature.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Lodging Securities at Bank.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I shall be obliged by your taking charge for me of some
    securities which you will find specified on the other side, and
    hold them for safe custody.  Please also cut off and collect
    the coupons attached to the Bonds and place the amounts
    from time to time, as they fall due, to the credit of my
    account.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Order to Receive Dividends.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       I am desirous that the dividends or interest in my stock
    shall be paid to the bank direct for the credit of my
    account.
       Kindly send me the proper form or order for my sig-
    nature.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.


(Ordering Investments.)

                                Address___________________
                                   Date___________________
    The Manager,
         Blankshire Bank.

    Sir,
       Please purchase on my account £500 stock 2 3/4 per
    cent. Consols at the market price, and send me an account
    of the same when I will forward my cheque in payment.
                                 Yours faithfully
                                          JANE SMITH.
    Blanktown.

Or

       Please purchase £500 Preference _(stating which stock)_
    Stock in the Great Blankshire Railway, at a price not
    exceeding £150 per cent., in my name, and send me the
    account for the same, when I will forward my cheque for the
    cost.
                                 Yours faithfully
                                          JANE SMITH.


    The same form can of course be adapted for selling out,
by substituting "sell" for "purchase," writing "less" for
"not exceeding," and omitting the line as to forwarding
the cheque.





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