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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/1903.txt b/1903.txt new file mode 100644 index 0000000..1f59dff --- /dev/null +++ b/1903.txt @@ -0,0 +1,4641 @@ +Project Gutenberg Etext of Everybody's Guide to Money, by Cotton + + +Copyright laws are changing all over the world, be sure to check +the copyright laws for your country before posting these files!! + +Please take a look at the important information in this header. +We encourage you to keep this file on your own disk, keeping an +electronic path open for the next readers. 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[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. + + + + + +End of Project Gutenberg Etext of Everybody's Guide to Money, by Cotton + + diff --git a/1903.zip b/1903.zip Binary files differnew file mode 100644 index 0000000..acca05e --- /dev/null +++ b/1903.zip diff --git a/LICENSE.txt b/LICENSE.txt new file mode 100644 index 0000000..6312041 --- /dev/null +++ b/LICENSE.txt @@ -0,0 +1,11 @@ +This eBook, including all associated images, markup, improvements, +metadata, and any other content or labor, has been confirmed to be +in the PUBLIC DOMAIN IN THE UNITED STATES. + +Procedures for determining public domain status are described in +the "Copyright How-To" at https://www.gutenberg.org. + +No investigation has been made concerning possible copyrights in +jurisdictions other than the United States. 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