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Title: Everybody's Guide to Money Matters

Author: of Exeter F.S.A. William Cotton

Release date: September 1, 1999 [eBook #1903]
Most recently updated: April 3, 2015

Language: English

Other information and formats: www.gutenberg.org/ebooks/1903

Credits: This etext was prepared by Nigel Lacey, Leicestershire, UK

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This etext was prepared by Nigel Lacey, Leicestershire, UK.

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Everybody's Guide
to
Money Matters

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

also

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

by

William Cotton, F.S.A.

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

London 1898.

PREFACE.

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

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

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

W.C.

CONTENTS.

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

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

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

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

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

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

CHAP. VII. - Loans to Corporations, &c. - Colonial Govern- ment
Securities - Inscribed Stocks and Bonds - List of Inscribed Stocks - Bonds
and Coupons - Foreign Govern- ment Stocks - Caution in Investing -
Railways - The Different Stocks and their Relative Values - The War- rants
for Interest and Dividends - Indian Railway Stocks - American Railways -
Foreign Railways - Banks - As an Investment - Colonial and Foreign
Corporation Stocks - Canals and Docks - Gas - Electric Lighting, Telegraph

and Telephone - Water Works - Breweries - Industrial Companies -
Financial, Land and Investment Companies - Financial Trusts - Insurance
Companies - Steamship Companies - Mines . . . . . . . . . . . . . . . 55

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

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

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

CHAP. XI. - The Post Office Savings Bank - Mode of Depo- siting -
Opening an Account - Convenience and Precau- tions - Limit in Amounts -

Withdrawal - Payment to Representatives - Government Annuities, &c. -
Advan- tages the Post Office Offers . . . . . . . . . 134

APPENDIX.

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

EVERYBODY'S GUIDE TO
MONEY MATTERS.
CHAPTER I. EASY STEPS TO MONEY MATTERS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

possess money will do well to take advantage of such an agency for their
money matters, having, of course, first ascertained that the standing of the
company is such that they may do so with safety and confi- dence.

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

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

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

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

She has an interview with the Manager or Cashier, tells her story, and is
advised to leave the money at the bank and have an account opened in her
name. This course she consents to adopt, and hands over the £500,

requesting some acknowledgment that she has done so, in common terms,
"something to show for it."

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

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

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

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

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

It then appears as follows:-

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

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

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

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

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

____! ! __Jane_Smith__ | | | ! ! |
————————————————————————————-

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

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

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

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

customer. The bank could be called upon to make good the amount to the
payee.

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

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

CHAPTER II. THE BANK ACCOUNT.

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

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

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

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

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

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

Having thus established relations between Miss Smith and her bankers,
let us see at the end, say, of a month, the state of her pass-book, premising

that in the meantime she has received and paid into the bank some moneys,
and also signed and sent cheques to some of her trades- men:-

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

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

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

He will be able to offer her facilities in various ways. He will hold for
her, in safe custody, any deeds or securities; and whilst she is absent from
home will take charge of her plate or valu- ables, free of all expense. If she
is travelling about the country he will arrange so that her cheques on the
Blankshire Bank may be cashed at any other bank in the kingdom. If she

has occasion for it he will send money on her account to some other
person's credit at any bank in the kingdom or the civilised world. If she
desires to travel abroad, he will obtain a passport for her and provide her
with "circular notes," which may be turned into money at any place she is
likely to visit.

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

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

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

the personal guar- antee of one or two responsible persons is accepted. This
is quite regular business, and the interest usually charged is fair and reason-
able.

CHAPTER III. LONDON BANKS AND
BANKING.

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

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

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

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

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

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

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

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

The other joint-stock banks of London trans- act their business in all
respects in the same manner as the Bank of England. In addition they invite

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

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

CHAPTER IV. INVESTMENTS.

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

the securities in which she should place her money, she should seek the
advice of her banker, and rely very much upon his opinion.

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

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

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

MORTGAGES.

To invest money upon mortgage is to lend it to a person who has house or
landed property, and desires to borrow money at a certain speci- fied rate of

interest. The title deeds of the property are deposited with the lender of the
money, together with a mortgage deed, which describes, in full detail, the
terms which may have been agreed upon.

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

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

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

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

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

THE FUNDS.

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

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

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

medium of the Stock Exchange, in arranging so that a person can obtain, or
dispose of, the exact amount of stock he desires.

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

STOCKS AND SHARES.

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

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

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

The shares of companies, which are only purchasable in whole numbers,
are of various denominations, or face values; and again these face values by

no means represent the market value. Shares of £5 each (nominal value)
may be quoted as selling at 6, which would be 1 pre- mium, but the
dividend or interest would be calculated on £5. On the other hand, a £5
share quoted at 4 would be 1 discount, but the dividend or interest would
still be calculated on the face value of £5.

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

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

DIVIDENDS.

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

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

CHAPTER V. BRITISH GOVERNMENT FUNDS.

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

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

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

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

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

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

TERMINABLE ANNUITIES.

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

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

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

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

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

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

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

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

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

a Power of Attorney to receive the divi- dends from time to time and place
the amount to the credit of your account.

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

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

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

AUTOMATIC RE-INVESTMENT OF DIVIDENDS.

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

CHAPTER VI. GOVERNMENT ANNUITIES.

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

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

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

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

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

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

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

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

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

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

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

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

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

Per Acts 10 Geo. IV., cap. 24, and 51 and 52 Vic. cap 15.
————————————-

TABLE showing the ANNUITY, continuing during the Life of any person
of the following Ages,
which £100 STOCK in the 2 1/2 PER CENT. BANK ANNUITIES will
purchase.

—————————————————————————————
—————————————————- | || When the price of || When
the price of || When the price of || | | || £100 of 2 1/2 per || £100 of 2 1/2 per ||
£100 of 2 1/2 per || | | Age || cent. Stock exclusive || cent. Stock exclusive ||
cent. Stock exclusive || Age | |of the || of accrued dividend || of accrued
dividend || of accrued dividend ||of the | |Nominee|| lies between || lies
between || lies between ||Nominee| | ||£94 15 9 and £95 13 11.||£95 13 11 and
£96 12 5.||£96 12 5 and £97 11 3. || | | ||———————————-||
———————————-||———————————-|| | | || Male. |
Female. || Male. | Female. || Male. | Female. || | |———-||—————-|
—————-||—————-|—————-||—————-|—————-||
———-| | || £ s. d. | £ s. d. || £ s. d. | £ s. d. || £ s. d. | £ s. d. || | | 15 || 4 1 2 | 3
15 3 || 4 1 7 | 3 15 7 || 4 2 0 | 3 15 11 || 15 | | 16 || 4 1 10 | 3 15 9 || 4 2 3 | 3 16
1 || 4 2 8 | 3 16 6 || 16 | | 17 || 4 2 7 | 3 16 4 || 4 3 0 | 3 16 8 || 4 3 5 | 3 17 1 ||
17 | | 18 || 4 3 4 | 3 16 11 || 4 3 9 | 3 17 3 || 4 4 3 | 3 17 8 || 18 | | 19 || 4 4 2 | 3
17 6 || 4 4 7 | 3 17 11 || 4 5 0 | 3 18 3 || 19 | | 20 || 4 4 11 | 3 18 2 || 4 5 5 | 3 18
6 || 4 5 10 | 3 18 11 || 20 | | 21 || 4 5 9 | 3 18 9 || 4 6 2 | 3 19 2 || 4 6 8 | 3 19 7
|| 21 | | 22 || 4 6 7 | 3 19 5 || 4 7 1 | 3 19 10 || 4 7 6 | 4 0 3 || 22 | | 23 || 4 7 6 | 4
0 1 || 4 7 11 | 4 0 6 || 4 8 5 | 4 0 11 || 23 | | 24 || 4 8 4 | 4 0 10 || 4 8 10 | 4 1 3 ||
4 9 4 | 4 1 8 || 24 | | 25 || 4 9 3 | 4 1 6 || 4 9 9 | 4 2 0 || 4 10 3 | 4 2 5 || 25 | | 26
|| 4 10 3 | 4 2 4 || 4 10 9 | 4 2 9 || 4 11 3 | 4 3 2 || 26 | | 27 || 4 11 3 | 4 3 1 || 4
11 9 | 4 3 6 || 4 12 3 | 4 4 0 || 27 | | 28 || 4 12 3 | 4 3 11 || 4 12 9 | 4 4 4 || 4 13
3 | 4 4 10 || 28 | | 29 || 4 13 3 | 4 4 9 || 4 13 10 | 4 5 2 || 4 14 4 | 4 5 8 || 29 | |
30 || 4 14 4 | 4 5 7 || 4 14 11 | 4 6 1 || 4 15 5 | 4 6 7 || 30 | | 31 || 4 15 6 | 4 6 6
|| 4 16 0 | 4 7 0 || 4 16 7 | 4 7 6 || 31 | | 32 || 4 16 7 | 4 7 6 || 4 17 2 | 4 8 0 || 4
17 9 | 4 8 6 || 32 | | 33 || 4 17 10 | 4 8 6 || 4 18 5 | 4 9 0 || 4 19 0 | 4 9 6 || 33 | |

34 || 4 19 0 | 4 9 6 || 4 19 7 | 4 10 0 || 5 0 3 | 4 10 6 || 34 | | 35 || 5 0 4 | 4 10 7
|| 5 0 11 | 4 11 1 || 5 1 6 | 4 11 8 || 35 | | 36 || 5 1 8 | 4 11 9 || 5 2 3 | 4 12 3 || 5
2 11 | 4 12 9 || 36 | | 37 || 5 3 0 | 4 12 11 || 5 3 8 | 4 13 5 || 5 4 3 | 4 14 0 || 37 | |
38 || 5 4 5 | 4 14 2 || 5 5 1 | 4 14 8 || 5 5 9 | 4 15 3 || 38 | | 39 || 5 5 11 | 4 15 5
|| 5 6 7 | 4 16 0 || 5 7 3 | 4 16 7 || 39 | | 40 || 5 7 6 | 4 16 10 || 5 8 2 | 4 17 5 || 5
8 10 | 4 18 0 || 40 | | 41 || 5 9 1 | 4 18 3 || 5 9 9 | 4 18 10 || 5 10 6 | 4 19 5 || 41
| | 42 || 5 10 9 | 4 19 9 || 5 11 6 | 5 0 4 || 5 12 2 | 5 1 0 || 42 | | 43 || 5 12 6 | 5 1
4 || 5 13 3 | 5 2 0 || 5 14 0 | 5 2 7 || 43 | | 44 || 5 14 5 | 5 3 0 || 5 15 1 | 5 3 8 || 5
15 11 | 5 4 4 || 44 | | 45 || 5 16 4 | 5 4 10 || 5 17 1 | 5 5 6 || 5 17 10 | 5 6 2 || 45
| | 46 || 5 18 4 | 5 6 9 || 5 19 1 | 5 7 5 || 5 19 11 | 5 8 2 || 46 | | 47 || 6 0 6 | 5 8 9
|| 6 1 3 | 5 9 6 || 6 2 1 | 5 10 2 || 47 | | 48 || 6 2 9 | 5 10 11 || 6 3 7 | 5 11 8 || 6 4
5 | 5 12 5 || 48 | | 49 || 6 5 2 | 5 13 3 || 6 6 0 | 5 14 0 || 6 6 11 | 5 14 9 || 49 | |
50 || 6 7 8 | 5 15 7 || 6 8 7 | 5 16 5 || 6 9 5 | 5 17 2 || 50 | | 51 || 6 10 5 | 5 18 1
|| 6 11 3 | 5 18 11 || 6 12 2 | 5 19 9 || 51 | | 52 || 6 13 3 | 6 0 9 || 6 14 2 | 6 1 7 ||
6 15 2 | 6 2 5 || 52 | | 53 || 6 16 4 | 6 3 7 || 6 17 4 | 6 4 5 || 6 18 4 | 6 5 4 || 53 | |
54 || 6 19 8 | 6 6 7 || 7 0 8 | 6 7 6 || 7 1 8 | 6 8 5 || 54 | | 55 || 7 3 2 | 6 9 10 || 7
4 3 | 6 10 8 || 7 5 3 | 6 11 8 || 55 | | 56 || 7 7 0 | 6 13 3 || 7 8 1 | 6 14 2 || 7 9 2 |
6 15 2 || 56 | | 57 || 7 11 2 | 6 17 0 || 7 12 3 | 6 17 11 || 7 13 5 | 6 18 11 || 57 | |
58 || 7 15 8 | 7 0 11 || 7 16 10 | 7 1 11 || 7 18 0 | 7 2 11 || 58 | | 59 || 8 0 7 | 7 5
1 || 8 1 9 | 7 6 2 || 8 3 0 | 7 7 3 || 59 | | 60 || 8 5 10 | 7 9 6 || 8 7 0 | 7 10 8 || 8 8
4 | 7 11 9 || 60 | | 61 || 8 11 3 | 7 14 4 || 8 12 7 | 7 15 6 || 8 13 11 | 7 16 8 || 61 |
| 62 || 8 16 11 | 7 19 5 || 8 18 3 | 8 0 7 || 8 19 8 | 8 1 10 || 62 | | 63 || 9 3 0 | 8 4
10 || 9 4 5 | 8 6 1 || 9 5 10 | 8 7 4 || 63 | | 64 || 9 9 5 | 8 10 8 || 9 10 11 | 8 12 0
|| 9 12 5 | 8 13 4 || 64 | | 65 || 9 16 3 | 8 17 2 || 9 17 10 | 8 18 6 || 9 19 5 | 8 19
11 || 65 | | 66 || 10 3 6 | 9 4 1 || 10 5 1 | 9 5 6 || 10 6 8 | 9 7 0 || 66 | | 67 || 10 11
0 | 9 11 8 || 10 12 8 | 9 13 2 || 10 14 5 | 9 14 8 || 67 | | 68 || 10 19 0 | 9 19 9 ||
11 0 9 | 10 1 4 || 11 2 7 | 10 2 11 || 68 | | 69 || 11 7 8 | 10 8 4 || 11 9 6 | 10 10 0
|| 11 11 4 | 10 11 8 || 69 | | 70 || 11 17 0 | 10 17 5 || 11 18 11 | 10 19 1 || 12 0
11 | 11 0 11 || 70 | | 71 || 12 6 11 | 11 6 8 || 12 9 0 | 11 8 6 || 12 11 0 | 11 10 5 ||
71 | | 72 || 12 17 8 | 11 16 5 || 12 19 10 | 11 18 4 || 13 2 0 | 12 0 4 || 72 | | 73 ||

13 9 0 | 12 6 9 || 13 11 3 | 12 8 9 || 13 13 6 | 12 10 10 || 73 | | 74 || 14 0 9 | 12
17 8 || 14 3 1 | 12 19 10 || 14 5 6 | 13 2 0 || 74 | | 75 || 14 13 0 | 13 9 4 || 14 15
6 | 13 11 7 || 14 18 0 | 13 13 10 || 75 | | 76 || 15 6 2 | 14 1 9 || 15 8 9 | 14 4 1 ||
15 11 5 | 14 6 6 || 76 | | 77 || 15 19 8 | 14 15 0 || 16 2 5 | 14 17 6 || 16 5 2 | 15
0 0 || 77 | | 78 || 16 14 0 | 15 9 0 || 16 16 10 | 15 11 8 || 16 19 9 | 15 14 4 || 78 |
| 79 || 17 9 3 | 16 4 0 || 17 12 3 | 16 6 10 || 17 15 4 | 16 9 7 || 79 | | 80 || 18 5 4
| 16 19 10 || 18 8 6 | 17 2 9 || 18 11 9 | 17 5 9 || 80 |
——————————————————————————————
————————————————-

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

—————————————————————————————
—————————————————- | || When the price of || When
the price of || When the price of || | | || £100 of 2 1/2 per || £100 of 2 1/2 per ||
£100 of 2 1/2 per || | | Age || cent. Stock exclusive || cent. Stock exclusive ||
cent. Stock exclusive || Age | |of the || of accrued dividend || of accrued
dividend || of accrued dividend ||of the | |Nominee|| lies between || lies
between || is above ||Nominee| | ||£97 11 3 and £98 10 6. ||£98 10 6 and £99
10 1. || £99 10 1. || | | ||———————————-||
———————————-||———————————-|| | | || Male. |
Female. || Male. | Female. || Male. | Female. || | |———-||—————-|
—————-||—————-|—————-||—————-|—————-||
———-| | || £ s. d. | £ s. d. || £ s. d. | £ s. d. || £ s. d. | £ s. d. || | | 15 || 4 2 5 | 3
16 4 || 4 2 10 | 3 16 8 || 4 3 3 | 3 17 0 || 15 | | 16 || 4 3 1 | 3 16 10 || 4 3 7 | 3 17

3 || 4 4 0 | 3 17 7 || 16 | | 17 || 4 3 11 | 3 17 5 || 4 4 4 | 3 17 10 || 4 4 9 | 3 18 3
|| 17 | | 18 || 4 4 8 | 3 18 0 || 4 5 1 | 3 18 5 || 4 5 7 | 3 18 10 || 18 | | 19 || 4 5 6 |
3 18 8 || 4 5 11 | 3 19 1 || 4 6 5 | 3 19 6 || 19 | | 20 || 4 6 3 | 3 19 4 || 4 6 9 | 3
19 8 || 4 7 3 | 4 0 1 || 20 | | 21 || 4 7 2 | 4 0 0 || 4 7 7 | 4 0 5 || 4 8 1 | 4 0 10 ||
21 | | 22 || 4 8 0 | 4 0 8 || 4 8 6 | 4 1 1 || 4 9 0 | 4 1 6 || 22 | | 23 || 4 8 11 | 4 1 4
|| 4 9 5 | 4 1 9 || 4 9 11 | 4 2 3 || 23 | | 24 || 4 9 10 | 4 2 1 || 4 10 4 | 4 2 6 || 4 10
10 | 4 3 0 || 24 | | 25 || 4 10 9 | 4 2 10 || 4 11 4 | 4 3 3 || 4 11 10 | 4 3 9 || 25 | |
26 || 4 11 9 | 4 3 7 || 4 12 3 | 4 4 1 || 4 12 10 | 4 4 6 || 26 | | 27 || 4 12 9 | 4 4 3
|| 4 13 4 | 4 4 11 || 4 13 10 | 4 5 4 || 27 | | 28 || 4 13 10 | 4 5 3 || 4 14 4 | 4 5 9 ||
4 14 11 | 4 6 3 || 28 | | 29 || 4 14 11 | 4 6 2 || 4 15 6 | 4 6 7 || 4 16 0 | 4 7 1 || 29
| | 30 || 4 16 0 | 4 7 0 || 4 16 7 | 4 7 6 || 4 17 2 | 4 8 0 || 30 | | 31 || 4 17 2 | 4 8 0
|| 4 17 9 | 4 8 6 || 4 18 4 | 4 9 0 || 31 | | 32 || 4 18 4 | 4 9 0 || 4 18 11 | 4 9 6 || 4
19 6 | 4 10 0 || 32 | | 33 || 4 19 7 | 4 10 0 || 5 0 2 | 4 10 6 || 5 0 10 | 4 11 1 || 33
| | 34 || 5 0 10 | 4 11 1 || 5 1 6 | 4 11 7 || 5 2 1 | 4 12 2 || 34 | | 35 || 5 2 2 | 4 12
2 || 5 2 10 | 4 12 9 || 5 3 5 | 4 13 4 || 35 | | 36 || 5 3 6 | 4 13 4 || 5 4 2 | 4 13 11
|| 5 4 10 | 4 14 6 || 36 | | 37 || 5 4 11 | 4 14 7 || 5 5 7 | 4 15 2 || 5 6 4 | 4 15 9 ||
37 | | 38 || 5 6 5 | 4 15 10 || 5 7 1 | 4 16 5 || 5 7 10 | 4 17 0 || 38 | | 39 || 5 7 11 |
4 17 2 || 5 8 8 | 4 17 9 || 5_19_ 4 | 4 18 5 || 39 | | 40 || 5 9 6 | 4 18 7 || 5 10 3 |
4 19 2 || 5 11 0 | 4 19 10 || 40 | | 41 || 5 11 3 | 5 0 1 || 5 11 11 | 5 0 8 || 5 12 8 |
5 1 4 || 41 | | 42 || 5 12 11 | 5 1 8 || 5 13 8 | 5 2 3 || 5 14 6 | 5 3 0 || 42 | | 43 || 5
14 9 | 5 3 3 || 5 15 6 | 5 4 0 || 5 16 4 | 5 4 8 || 43 | | 44 || 5 16 8 | 5 5 0 || 5 17 6
| 5 5 9 || 5 18 3 | 5 6 5 || 44 | | 45 || 5 18 8 | 5 6 11 || 5_11_ 6 | 5 7 7 || 6 0 4 | 5
8 4 || 45 | | 46 || 6 0 9 | 5 8 10 || 6 1 7 | 5 9 7 || 6 2 5 | 5 10 4 || 46 | | 47 || 6 3 0 |
5 10 11 || 6 3 10 | 5 11 8 || 6 4 8 | 5 12 6 || 47 | | 48 || 6 5 3 | 5 13 2 || 6 6 2 | 5
13 11 || 6 7 1 | 5 14 9 || 48 | | 49 || 6 7 9 | 5 15 6 || 6 8 8 | 5 16 4 || 6 9 7 | 5 17
1 || 49 | | 50 || 6 10 4 | 5 18 0 || 6 11 4 | 5 18 10 || 6 12 3 | 5 19 8 || 50 | | 51 || 6
13 2 | 6 6 6 || 6 14 1 | 6 1 5 || 6 15 1 | 6 2 3 || 51 | | 52 || 6 16 1 | 6 3 3 || 6 17 1
| 6 4 2 || 6 18 1 | 6 5 0 || 52 | | 53 || 6 19 4 | 6 6 2 || 7 0 4 | 6 7 1 || 7 1 5 | 6 8 0
|| 53 | | 54 || 7 2 8 | 6 9 4 || 7 3 9 | 6 10 3 || 7 4 10 | 6 11 2 || 54 | | 55 || 7 6 4 | 6
12 7 || 7 7 5 | 6 13 6 || 7 8 7 | 6 14 6 || 55 | | 56 || 7 10 3 | 6 16 2 || 7 11 5 | 6 17

2 || 7 12 7 | 6 18 2 || 56 | | 57 || 7 14 6 | 7 0 0 || 7 15 9 | 7 1 0 || 7 16 11 | 7 2 1
|| 57 | | 58 || 7 19 2 | 7 4 0 || 8 0 5 | 7 5 1 || 8 1 8 | 7 6 2 || 58 | | 59 || 8 4 3 | 7 8
4 || 8 5 6 | 7 9 6 || 8 6 10 | 7 10 7 || 59 | | 60 || 8 9 7 | 7 12 11 || 8 10 11 | 7 14 1
|| 8 12 4 | 7 15 3 || 60 | | 61 || 8 15 3 | 7 17 10 || 8 16 7 | 7 19 1 || 8 18 0 | 8 0 4
|| 61 | | 62 || 9 1 0 | 8 3 1 || 9 2 6 | 8 4 4 || 9 4 0 | 8 5 8 || 62 | | 63 || 9 7 3 | 8 8 8
|| 9 8 9 | 8 10 0 || 9 10 4 | 8 11 4 || 63 | | 64 || 9 13 11 | 8 14 8 || 9 15 6 | 8 16 1
|| 9 17 1 | 8 17 6 || 64 | | 65 || 10 1 0 | 9 1 4 || 10 2 7 | 9 2 9 || 10 4 4 | 9 4 3 ||
65 | | 66 || 10 8 5 | 9 8 6 || 10 10 1 | 9 10 0 || 10 11 10 | 9 11 6 || 66 | | 67 || 10
16 2 | 9 16 3 || 10 17 11 | 9 17 10 || 10 19 9 | 9 19 6 || 67 | | 68 || 11 4 5 | 10 4
7 || 11 6 3 | 10 6 3 || 11 8 2 | 10 7 11 || 68 | | 69 || 11 13 3 | 10 13 5 || 11 15 3 |
10 15 2 || 11 17 2 | 10 17 0 || 69 | | 70 || 12 2 11 | 11 2 9 || 12 4 11 | 11 4 7 ||
12 7 0 | 11 6 6 || 70 | | 71 || 12 13 2 | 11 12 4 || 12 15 4 | 11 14 3 || 12 17 6 | 11
16 3 || 71 | | 72 || 13 4 2 | 12 2 4 || 13 6 5 | 12 4 5 || 13 8 9 | 12 6 6 || 72 | | 73 ||
13 15 10 | 12 13 0 || 13 18 2 | 12 15 1 || 14 0 7 | 12 17 4 || 73 | | 74 || 14 7 11 |
13 4 2 || 14 10 5 | 13 6 5 || 14 13 0 | 13 8 9 || 74 | | 75 || 15 0 7 | 13 16 2 || 15 3
2 | 13 18 7 || 15 5 10 | 14 1 0 || 75 | | 76 || 15 14 1 | 14 8 11 || 15 16 10 | 14 11
6 || 15 19 7 | 14 14 0 || 76 | | 77 || 16 8 0 | 15 2 7 || _17_10 11 | 15 5 3 || 16 13
10 | 15 7 11 || 77 | | 78 || 17 2 8 | 15 17 0 || 17 5 9 | 15 19 10 || 17 8 10 | 16 2 8
|| 78 | | 79 || 17 18 5 | 16 12 6 || 18 1 8 | 16 15 5 || 18 4 10 | 16 18 5 || 79 | | 80
|| 18 15 0 | 17 8 10 || 18 18 4 | 17 11 11 || 19 1 9 | 17 15 0 || 80 |
——————————————————————————————
————————————————-

INSURANCE OFFICE ANNUITIES.

Some of the Insurance Offices grant imme- diate annuities. Of course, in
purchasing a life annuity from an Insurance Office, it is necessary to ensure
as far as is humanly possible that an annuity will be paid for life. This not
only de- pends upon the present solvency of the company, but upon that
solvency being maintained. There is not much difficulty, however, in

selecting from amongst the numerous well-established companies, with
proper advice, one that will answer every requirement. The following table
shows the amount of an annuity granted by the undermentioned companies
for every £100 paid. The age last birthday is that upon which the pay- ment
is based, and the initial letters M. and F. indicate the rates for male and
female lives. The ages quoted range from 50 to 70 years, but the terms for
purchasing an annuity at any age can be obtained at the Insurance Office.

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

—————————————————————————————
—————————————————————- | | | | | | | | | | | | | Office |
| Age 50 | Age 52 | Age 55 | Age 58 | Age 60 | Age 62 | Age 65 | Age 70 | | | | |
| | | | | | | | | |———————————-|-|————|————|————|
————|————|————|————|————|-| | | | £ s. d.| £ s. d.| £ s.
d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| | | | | | | | | | | | | | |!British Empire
Mutual |M| 7 4 6| 7 10 2| 8 0 2| 8 12 10| 9 3 2| 9 14 6|10 14 4|12 16 4|M| | |F|
6 12 0| 6 17 0| 7 6 2| 7 17 4| 8 6 2| 8 16 2| 9 14 4|11 15 10|F| | | | | | | | | | | | | |
Caledonian |M| 7 6 2| 7 12 0| 8 2 8| 8 16 0| 9 7 0| 9 19 2|11 0 0|13 5 10|M| |
|F| 6 11 8| 6 17 0| 7 6 2| 7 17 11| 8 7 0| 8 15 7| 9 13 10|11 14 11|F| | | | | | | | | | |
| | | City of Glasgow |M| 7 5 6| 7 11 6| 8 2 0| 8 15 6| 9 6 6| 9 18 6|10 19 0|13
4 6|M| | |F| 6 12 6| 6 17 6| 7 7 5| 7 17 9| 8 6 7| 8 16 0| 9 14 10|11 14 7|F| | | | | |
| | | | | | | | Eagle |M| 7 5 10| 7 11 6| 8 1 10| 8 15 0| 9 5 8| 9 17 6|10 18 0|13 1
4|M| | |F| 6 12 10| 6 18 2| 7 7 6| 7 19 2| 8 8 4| 8 18 8| 9 17 6|12 0 4|F| | | | | | | |
| | | | | | Economic |M| 7 5 6| 7 11 6| 8 1 10| 8 15 4| 9 6 4| 9 18 4|10 19 8|13 4
10|M| | |F| 6 12 4| 6 17 8| 7 7 4| 7 19 2| 8 8 4| 8 19 0| 9 18 4|12 2 8|F| | | | | | | |
| | | | | | Edinburgh |M| 7 4 6| 7 10 6| 8 1 4| 8 14 10| 9 6 2| 9 18 6|11 0 0|12 19
6|M| | |F| 6 11 2| 6 16 8| 7 6 6| 7 18 6| 8 8 0| 8 18 10| 9 18 6|11 17 8|F| | | | | | |
| | | | | | |!English and Scottish |M| 7 10 0| 7 16 8| 8 6 10| 8 19 0| 9 10 2|10 2

8|11 3 2|13 6 4|M| | Law |F| 6 12 4| 6 17 4| 7 7 4| 7 19 4| 8 8 6| 8 18 10| 9 18
4|11 19 0|F| | | | | | | | | | | | | |!Friends' Provident |M| 6 15 4| 7 0 10| 7 10 4| 8 1
8| 8 10 7| 9 0 9| 9 18 10|11 18 6|M| | |F| 6 5 8| 6 10 9| 6 19 11| 7 11 1| 7 19
11| 8 9 11| 9 7 1|11 4 7|F| | | | | | | | | | | | | | General |M| 7 4 8| 7 11 10| 8 3 10| 8
17 4| 9 7 2| 9 18 8|11 2 0|13 8 6|M| | |F| 6 13 4| 6 18 10| 7 9 2| 8 1 2| 8 10 0| 8
19 6| 9 15 8|11 10 10|F| | | | | | | | | | | | | |!Gresham | | 6 18 5| 7 4 0| 7 14 1| 8 6
7| 8 16 8| 9 7 11|10 8 1|12 12 11| | | | | | | | | | | | | | |!Guardian |M| 6 19 4| 7 5 4|
7 15 8| 8 9 0| 8 19 8| 9 11 6|10 1 2|12 15 10|M| | |F| 6 6 6| 6 11 10| 7 1 6| 7 13
2| 8 2 4| 8 12 10| 9 11 8|11 14 8|F| | | | | | | | | | | | | |!Hand-in-Hand |M| 7 3 4| 7
9 4| 8 0 0| 8 13 4| 9 4 2| 9 16 2|10 17 0|13 1 4|M| | |F| 6 10 2| 6 15 8| 7 5 4| 7
17 2| 8 6 6| 8 17 0| 9 16 2|11 19 10|F| | | | | | | | | | | | | | Law Union and Crown
|M| 7 2 8| 7 8 4| 7 18 10| 8 12 0| 9 2 8| 9 14 8|10 15 6|13 0 2|M| | |F| 6 9 10| 6
15 2| 7 4 8| 7 15 10| 8 4 10| 8 15 2| 9 14 2|11 17 6|F| | | | | | | | | | | | | |!Legal
and General |M| 7 2 0| 7 7 6| 8 18 6| 8 13 8| 9 5 2| 9 17 6|10 17 10| — |M| |
|F| 6 7 10| 6 13 0| 7 2 0| 7 13 0| 8 1 10| 8 12 2| 9 6 8| — |F| | | | | | | | | | | | | |
Life Association of |M| 7 6 0| 7 12 0| 8 2 8| 8 16 0| 9 7 0| 9 19 2|11 0 6|13 4
8|M| | Scotland |F| 6 12 10| 6 18 2| 7 7 10| 7 19 8| 8 9 0| 8 19 10| 9 19 2|12 2
6|F| | | | | | | | | | | | | | Liverpool and London |M| 7 4 4| 7 10 6| 8 1 4| 8 15 0| 9 6
4| 9 19 0|11 0 10|13 7 8|M| | and Globe |F| 6 10 10| 6 16 6| 7 6 4| 7 18 4| 8 8
0| 8 19 0| 9 19 0|12 4 10|F| | | | | | | | | | | | | | London, Edinburgh, |M| 8 5 0| 8
11 0| 9 1 8| 9 15 4|10 6 8|10 19 2|12 1 2|14 7 10|M| | and Glasgow |F| 7 11 0|
7 16 6| 8 6 2| 8 18 4| 9 8 0| 9 18 10|10 18 8|13 4 10|F| | | | | | | | | | | | | | Marine
and General |M| 6 17 3| 7 3 3| 7 13 3| 8 5 0| 8 14 9| 9 7 0|10 10 0|12 12 0|M|
| Mutual |F| 6 4 3| 6 9 6| 6 18 9| 7 10 6| 7 19 6| 8 9 6| 9 8 3|11 10 6|F| | | | | | | |
| | | | | | National Life |M| 7 11 3| 7 17 3| 8 7 11| 9 1 5| 9 12 7|10 4 10|11 6
5|13 12 3|M| | |F| 6 17 9| 7 3 3| 7 13 0| 8 4 11| 8 14 4| 9 5 2|10 4 9|12 9 10|F| |
| | | | | | | | | | | | National Provident |M| 6 15 4| 7 0 10| 7 10 4| 8 1 8| 8 10 6| 9 0
8| 9 18 10|11 18 6|M| | |F| 6 5 8| 6 10 8| 6 19 10| 7 11 0| 7 19 10| 8 9 10| 9 7
0|11 4 6|F| | | | | | | | | | | | | | North British and |M| 7 5 4| 7 11 4| 8 1 10| 8 15 2|
9 6 2| 9 18 2|10 19 4|13 4 6|M| | Mercantile |F| 6 12 2| 6 17 6| 7 7 2| 7 19 0| 8

8 2| 8 18 10| 9 18 2|12 2 6|F| | | | | | | | | | | | | |!Northern |M| 7 1 8| 7 7 0| 7 16 6|
8 8 8| 8 18 6| 9 9 4|10 8 6|12 8 8|M| | |F| 6 9 6| 6 14 4| 7 3 0| 7 13 10| 8 2 2| 8
11 10| 9 9 2|11 9 0|F| | | | | | | | | | | | | |!Pearl |M| 7 9 4| 7 15 8| 8 6 10| 9 0 4| 9
11 0|10 3 2|11 4 6|13 10 6|M| | |F| 7 3 2| 7 9 4| 8 0 2| 8 13 0| 9 3 0| 9 14 6|10
14 6|12 17 6|F| | | | | | | | | | | | | | Positive |M| 7 0 0| 7 8 0| 8 0 0| 8 15 0| 9 5 0| 9
19 0|11 0 0|13 5 0|M| | |F| 6 10 0| 6 16 0| 7 5 0| 8 0 0| 8 10 0| 9 0 0| 9 15 0|11
15 0|F| | | | | | | | | | | | | |!Provident Clerks' |M| 6 15 10| 7 1 6| 7 11 9| 8 4 9| 8
15 1| 9 6 9|10 6 10|12 9 5|M| | |F| 6 3 3| 6 8 7| 6 17 10| 7 9 1| 7 18 1| 8 8 5| 9
7 0|11 8 7|F| | | | | | | | | | | | | | Prudential |M| 6 16 6| 7 2 6| 7 13 6| 8 7 0| 8 18 0|
9 10 6|11 12 0|12 17 0|M| | |F| 6 3 0| 6 9 0| 6 19 0| 7 11 0| 8 0 6| 8 11 0| 9 11
0|11 15 0|F| | | | | | | | | | | | | |!Rock |M| 7 5 0| 7 11 2| 8 2 2| 8 16 2| 9 7 9|10 0
5|11 2 11|13 4 2|M| | |F| 6 11 4| 6 17 0| 7 6 11| 7 19 4| 8 9 0| 9 0 2|10 0 6|12 1
3|F| | | | | | | | | | | | | | Royal |M| 6 12 7| 6 18 11| 7 9 5| 8 1 8| 8 11 2| 9 2 2|10 1
10|12 1 0|M| | |F| 6 5 3| 6 11 0| 7 0 7| 7 11 3| 7 19 6| 8 8 8| 9 5 0|10 17 9|F| | | |
| | | | | | | | | | Royal Exchange |M| 6 16 11| 7 2 9| 7 13 0| 8 5 11| 8 16 6| 9 8
1|10 8 5|12 11 3|M| | |F| 6 4 3| 6 9 6| 6 18 11| 7 10 5| 7 19 5| 8 9 8| 9 8 3|11
10 7|F| | | | | | | | | | | | | | Scottish Amicable |M| 7 0 7| 7 6 2| 7 16 5| 8 9 2| 8 19
4| 9 11 1|10 11 10|12 15 7|M| | |F| 6 7 8| 6 13 2| 7 2 8| 7 13 9| 8 2 5| 8 12 9| 9
12 0|11 14 1|F| | | | | | | | | | | | | | Scottish Life |M| 7 7 6| 7 13 6| 8 4 4| 8 17 10|
9 9 0|10 1 2|11 2 8|13 8 6|M| | |F| 6 13 6| 6 19 0| 7 8 8| 8 0 8| 8 10 0| 9 0 8|10
0 0|12 2 6|F| | | | | | | | | | | | | | Scottish Metropolitan |M| 7 10 10| 7 18 0| 8 9 4|
9 2 0| 9 11 8|10 3 6|11 5 8|13 11 11|M| | |F| 6 12 9| 6 17 9| 7 6 8| 7 17 6| 8 6
1| 8 16 3| 9 14 6|11 15 8|F| | | | | | | | | | | | | | Scottish Provident |M| 7 2 8| 7 8 5|
7 18 9| 8 11 11| 9 2 8| 9 14 6|10 15 3|12 16 10|M| | |F| 6 9 8| 6 15 0| 7 4 4| 7
15 11| 8 5 1| 8 15 6| 9 14 5|11 14 3|F| | | | | | | | | | | | | |!Scottish Widows' Fnd.
|M| 6 8 0| 6 13 4| 7 2 2| 7 12 10| 8 1 0| 8 10 6| 9 7 10|11 8 6|M| | |F| 6 2 6| 6 7
6| 6 16 0| 7 6 2| 7 14 0| 8 3 2| 8 19 10|10 18 6|F| | | | | | | | | | | | | | Standard |M|
6 19 4| 7 5 0| 7 15 1| 8 7 10| 8 18 5| 9 10 0|10 10 3|12 7 9|M| | |F| 6 9 8| 6 15
0| 7 4 4| 7 16 0| 8 5 1| 8 15 6| 9 14 5|11 7 1|F| | | | | | | | | | | | | | Star |M| 7 3 9| 7
10 6| 8 2 1| 8 15 8| 9 5 5| 9 16 7|10 17 2|13 0 1|M| | |F| 6 14 4| 6 19 11| 7 9 6|

8 0 11| 8 9 11| 9 0 1| 9 18 6|11 15 8|F| | | | | | | | | | | | | | Sun (of India) |M| 7 5
10| 7 12 0| 8 2 10| 8 16 8| 9 8 0|10 0 4|11 2 2|13 8 8|M| | |F| 6 12 6| 6 18 0| 7
7 10| 8 0 0| 8 9 8| 9 0 8|10 0 6|12 6 0|F| | | | | | | | | | | | | | United Kingdom |M|
6 15 0| 7 0 6| 7 10 3| 8 2 6| 8 15 11| 9 3 3|10 0 3|12 1 0|M| | Temperance |F| 6
2 11| 6 8 0| 6 16 11| 7 6 5| 7 16 4| 8 6 0| 9 3 4|11 2 3|F| | | | | | | | | | | | | |
Yorkshire |M| 7 1 2| 7 7 6| 7 18 0| 8 10 4| 9 0 0| 9 11 6|10 11 0|12 15 0|M| |
|F| 6 8 0| 6 13 6| 7 2 0| 7 12 6| 8 2 6| 8 13 6| 9 12 0|11 12 0|F| | | | | | | | | | | | | |
———————————-|-|————|————|————|————|
————|————|————|————|-| | Post Office (Govt.) |M| 6 13 4|
6 19 2| 7 9 10| 8 3 2| 8 14 0| 9 6 0|10 6 10|12 10 10|M| | Anns. |F| 6 0 6| 6 6
0| 6 15 8| 7 7 6| 7 16 8| 8 7 4| 9 6 4|11 9 6|F| | | | | | | | | | | | | |
———————————-|-|————|————|————|————|
————|————|————|————|-| | Equitable, U. States} |M| 7 10
0| 7 15 9| 8 6 2| 8 19 3| 9 9 10|10 1 9|11 1 8|12 17 11|M| | Mutual, New York
} |F| 6 16 9| 7 2 1| 7 11 6| 8 3 1| 8 12 1| 9 2 8|10 0 9|11 17 8|F| | New York } |
| | | | | | | | | |
——————————————————————————————
————————————————————-

INDIAN GOVERNMENT STOCKS.

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

There is also what is termed a Rupee Paper Loan, raised in India at 3 1/2
per cent. per annum. The interest is paid in the currency of the coun- try,
which is the rupee, and that coin being worth only a little more than half its
nominal value in this country, the investor in this stock would receive in the

shape of interest little more than half the £3 10s. a year. The price of the
stock in the market is consequently in the same proportion, and at the
present moment is about £62 for every £100 stock.

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

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

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

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

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

COLONIAL GOVERNMENT SECURITIES.

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

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

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

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

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

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

COLONIAL GOVERNMENT INSCRIBED STOCKS.
——————————————————————————————
——————————————————————————————
————- | | | | | | | | | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | | | | | | | | | | |—————|
—————|————————-|————-|——-|
——————————————————————————————
—————— | £ | £ | | | | | | | | 100,000| 100,000| 1 Mar. 1 Sept.| 4 Aug. | 4
|Antigua 4% Inscribed Stock | 1919-44 | 115 - 117 | | 375,000| 375,000|15
Mar. 15 Sept.| 17 Aug. |3 1/2|Barbados 3 1/2% Inscribed Stock | 1925-42 |
109 - 111 | | 1,120,000| 969,940| 1 Jan. 1 July | 16 Dec. | 3 |British Columbia
(Province of) 3% Insc. Stock | 1941 | 101 - 103 | | — | 194,500|15 Jan. 15

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

| 9,686,300| 9,686,300| 1 Jan. 1 July | 2 Dec. | 4 |New South Wales Stock,
Inscribed | 1933 | 120 - 122 | |16,500,000|16,500,000| 1 April 1 Oct. | 2
Sept.|3 1/2| Do. 3 1/2% Stock, Inscribed | 1924 | 110 - 111 | | — |12,826,200|
1 Mar. 1 Sept.| 5 Aug. |3 1/2| Do. 3 1/2% Stock, Inscribed | 1918 | 109 - 110
| | 4,000,000| 4,000,000| 1 April 1 Oct. | 2 Sept.| 3 | Do. 3% Inscribed Stock |
1935 |101.5-102.5| |29,150,302|29,150,302| 1 May 1 Nov. | 2 Oct. | 4 |New
Zealand 4% Consolidated Stock Inscribed | 1929 | 115 - 116 | | 5,960,588|
5,960,588| 1 Jan. 1 July | 2 Dec. |3 1/2| Do. 3 1/2% Stock | 1940 |105.5-
106.5| | 1,527,000| 1,526,620| 1 April 1 Oct. | 2 Sept.| 3 | Do. 3% Inscribed |
1945 |100.5-101.5| |10,866,900|10,866,900| 1 Jan. 1 July | 2 Dec. | 4
|Queensland Stock Inscribed | 1915-24 | 113 - 115 | | 8,516,734| 8,516,734| "
" | " |3 1/2| Do. 3 1/2% Inscribed | 1921-4-30 |105.5-106.5| | 1,250,000|
1,250,000| " " | " |3 1/2| Do. 3 1/2% do. | 1945 |107.5-108.5| | 85,490|
85,480|15 Feb. 15 Aug. | 16 Jan. | 4 |St. Lucia 4% Inscribed Stock | 1919-44
| 112 - 114 | | 7,721,000| 7,721,000| 1 April 1 Oct. | 11 Sept.| 4 |S. Australia
(Loans of 1882-3-4-5-6-7) Reg. | 1916-36 | 112 - 114 | | 2,850,713|
2,517,800| 1 Jan. 1 July | 14 Dec. |3 1/2| Do. 3 1/2% Inscribed Stock
Registered | 1939 | 111 - 113 | | 839,500| 839,500| " " | " | 3 | Do. 3% do. do. |
1916-26 | 97.5- 98.5| | 3,546,500| 3,546,500| 1 Jan. 1 July | 16 Dec. |3
1/2|Tasmanian 3 1/2% Inscribed Stock | 1920-40 | 106 - 108 | | 1,000,000|
1,000,000| " " | " | 4 | Do. 4% do. | 1920-40 | 114 - 116 | | 100,000|
100,000|15 Mar. 15 Sept.| 17 Aug. | 4 |Trinidad 4% Inscribed Stock | 1917-
42 | 114 - 116 | | 3,365,300| 3,365,300| 1 Jan. 1 July | 16 Dec. | 4 |Victoria
4% Railway Loan, 1881, Inscrib. Stock | 1907 | 106 - 108 | | 9,358,200|
9,358,200| 1 April 1 Oct. | 16 Sept.| 4 | Do. Loans of 1882-3-4, Inscrib.
Stock |1908-13-19 | 107 - 113 | | 6,000,000| 6,000,000| 1 Jan. 1 July | 16
Dec. | 4 | Do. Loan of 1885, Inscribed Stock | 1920 | 112 - 114 |
|12,000,000|12,000,000| " " | " |3 1/2| Do. 3 1/2% Inscribed Stock | 1921-3-6
|104.5-105.5| | 2,107,000| 2,107,000| " " | " | 4 | Do. 4% Inscribed Stock |
1911-26 | 108 - 110 | | 961,277| 961,277|15 Jan. 15 July | 16 Dec. | 4

|Western Australia 4% Inscribed Stock | 1934 | 121 - 123 | | 1,876,000|
1,876,000|15 April 15 Oct. | 2 Oct. | 4 | Do. 4% Inscribed Stock | 1911-31 |
112 - 114 | | 750,000| 750,000| 1 May 1 Nov. | 16 Oct. |3 1/2| Do. 3 1/2%
Inscribed Stock | 1915-35 | 110 - 112 | | 750,000| 750,000| " " | " | 3 | Do. 3%
Inscribed Stock | 1915-35 | 98 - 99 | | | | | | | | | |
——————————————————————————————
——————————————————————————————
————- The numbered columns are explained as follows:- 1. The
amount of Loan authorized to be raised. | 5. The rate of interest on the Loan.
2. The amount actually owing. | 6. The name of the country borrowing. 3.
When the interest is payable. | 7. When the Loan is re-payable - thus "1919
or 1944." 4. When ex interest. | 8. The price for every £100 of stock.

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

FOREIGN GOVERNMENT STOCKS.

These represent money borrowed by various foreign countries on the
security of their credit or solvency, and the loans stand to them in the same

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

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

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

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

RAILWAYS.

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

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

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

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

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

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

INDIAN RAILWAY STOCKS.

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

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

AMERICAN RAILWAYS.

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

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

FOREIGN RAILWAYS.

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

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

political convulsions and other contingencies, which make them undesirable
as an investment.

BANKS.

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

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

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

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

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

The profits of banking have been, in times past, very large, and the
original shareholders of the older banks have reaped the advantage thereof,

but bank shares of good repute are not now to be obtained except at a high
premium.

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

* See Note, p.39.

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

COLONIAL AND FOREIGN CORPORATION STOCKS.

These represent money borrowed by munici- palities and trusts in Colonial
and foreign towns, and the security offered consists of rates and revenues
from the various undertakings, such as harbours, gas, and water-works, city

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

CANALS AND DOCKS.

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

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

BREWERIES.

Among the numerous commercial undertak- ings offering for investment,
brewery companies form a class of themselves, and, with few excep- tions,
the English companies appear to have done well, and the shares of the best
of them stand at a high premium. Properly managed and dealing in an

article of universal consump- tion, brewery companies ought to be a trust-
worthy investment: but they are liable to much fluctuation. The shares of
one of the leading concerns, which now stand at about 150 for the £100
share, were only four years ago as low as 28, and at the same time only half
the interest was paid on the preference shares. American brewery
companies are liable to be manipulated by cliques and syndicates, and
should be avoided as an investment.

COMMERCIAL AND INDUSTRIAL COMPANIES.

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

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

There are, of course, many persons who have the means of acquiring
reliable information about a company, and are able to form a sound opinion
as to its prospects, but the information is derived from personal knowledge
and not from kind friends or from public prints, which are not always to be

trusted. These persons purchase shares either for investment or as a
speculation — in this latter case with a know- ledge or, at all events, a safe
presumption that they will go to a premium, that is, rise in value to
considerably more than their nominal amount, either from their own merits,
or from an active demand for them on the part of the public, or by artificial
stimulation. The holders know pretty well when the highest price has been
reached, and then sell out with great advantage to them- selves. It is often at
that moment that the tyro is recommended to buy, or is seized with a desire
to have a share in so good a concern, and parts with his money. The
knowing speculator has taken his profit, and sees with grim satisfaction the
shares gradually declining in value, until they arrive at the position of more
than one- third of existing companies which are now quoted at a discount.

FINANCIAL LAND AND INVESTMENT COMPANIES.

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

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

FINANCIAL TRUSTS.

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

INSURANCE COMPANIES.

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

STEAMSHIP COMPANIES.

Judging from the prices of the shares in these companies, they have not
been very successful as a whole, and it would appear that a Govern- ment

subsidy for mail or other service is almost necessary to make them
profitable.

MINES.

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

CHAPTER VIII. THE STOCK EXCHANGE.

THE Stock Exchange is a market for the sale and purchase of all kinds of
securities. The buildings, wherein business is transacted, occupy a
triangular plot of ground near the Bank of England, and comprise the Hall
where the various markets are held, and other rooms and offices for the use
of the numerous officials. There are 2,500 members, and the management is
vested in a Committee selected from their number. Admission to
membership is open to any person not engaged in another business, and

who is properly proposed and seconded; but very strict regulations and
guarantees are enforced before entry, so as to exclude any one whose
circumstances and character will not bear the strictest investigation. The
hours of busi- ness are eleven to four o'clock on all days except Saturday,
when they are until two o'clock. The members of the house are divided into
Jobbers and Brokers, the former being dealers in stocks and shares. It is
contrary to practice for brokers to deal with brokers, and all trans- actions
are between brokers and jobbers.

What are known as "markets" are groups of jobbers distributed about the
house, each group having its own particular dealings, one in Government
Stocks, another in English rail- ways, a third in Foreign securities, and so
on. A broker having received an order from a customer to sell £1,000 Great
Eastern Railway Stock, would go to the English railway group and inquire
of a jobber the price or quotation for Great Easterns, without disclosing
whether he wants to buy or to sell. The jobber replies, "115 1/4 to 115 1/2";
whereupon the broker says, "I sell at 115 1/4," when the bargain is
completed, without any memorandum or written contract, the verbal
communication being alone in use, and the jobber is bound by it. It will be
observed that the lower price, 115 1/4, is accepted by the broker on behalf
of his customer, as a sale is always effected at the lowest quotation, and a
purchase at the highest. Another broker pre- sently goes to the jobber and
asks the same question receiving the same reply, 115 1/4 to 115 1/2 the
broker says, "I buy of you at 115 1/2," being the highest quotation. The
difference of 5s. between the sale and the purchase is the Job- ber's profit.
The broker charges his customer his own commission or brokerage on the
trans- action, which ranges from 2s. 6d. per cent. on the Government and
Colonial Stocks up to 10s. per cent. on railway stocks. This is the
elementary stage of the business of the Stock Exchange, but the variety of
the securities dealt in, under constantly changing circumstances, the number
of transactions, and the amount of money changing hands, involve intricate

accounts and arrangements, which need not be particularised here. Accounts
are settled fort- nightly, the precise dates being fixed some time before by
the Committee of the house.

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

"boom" in foreign stocks is due to the settlement of some political or other
difficulty, &c., &c. A "slump" is just the reverse, being an unaccountable
depression which sometimes fastens upon the specula- tive world, and
betrays distrust in everything. Unless this feeling is checked in time it
degenerates into "panic," when prices fall to a ruinously low figure.

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

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

In order to sell stock the holder may attend at the Bank of England
himself accompanied by his broker, and then and there have the transfer
made and the money paid. But this would be unusual and held to imply

mistrust, without perhaps occasion for it. The safest plan is for the holder to
instruct his bankers to carry out the transaction, and give them a Power of
Attorney to enable them to do so. A special form of power is provided by
the Bank of Eng- land, the cost of which is 11s. 6d. The Inscribed or
Registered Stocks of most of the Colonial Governments are dealt with in
the same way, as well as Indian stocks and the stocks of many of our larger
towns. The account of an investor may be added to or diminished at any
time with- out difficulty or delay.

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

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

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

gain much useful infor- mation from his broker, although for sound advice
his banker is to be preferred.

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

An ingenious mode of practising on the cre- dulity of the public may be
noticed in some financial publications. An editorial notice or subsidised
paragraph will be inserted in the paper, extolling the merits and predicting
the certain success of some concern which it is desired to bolster up or to
foist upon the public. This is done in such a way that the reader is expected
to believe that it is the genuine ex- pression of a truthful opinion by the

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

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

At the present time the rage appears to have set in for forming limited
liability companies out of private industrial concerns or trading firms. Most
of these companies, we are told by an authority, "are brought out under the
same auspices" — that is they are started and floated by a skilled personage
known as a "promoter." The stereotyped prospectus must now be familiar to
most people, and the public respond freely to the invitation to subscribe for
shares, without consideration or inquiry. The prospectus is usually replete
with statistics, showing the suc- cess which has attended the business whilst
in private hands, and the enormous profits made; and one is apt to wonder
why they did not keep it to themselves, instead of inviting the public to
share in the gains. But there are good com- panies and bad companies, and
it is to be feared that the latter largely preponderate. A good company may
have a genuine reason for its existence, such as the desire of a last surviving
partner to retire from active life, or the growth of the business to such an
extent that more capital is required than could be obtained from a private
person, or upon some other equally valid ground. A bad company is often
the make-shift to save a decaying firm from insol- vency, or to dispose of a
business at a price quite out of proportion to its real value. The prospectus
affords no opportunity of discrimi- nating what is genuine and likely to
succeed from what is false and sure to fail. If, as it has been said, eighty per
cent. of companies floated sooner or later go to the wall, then, indeed,
inquiry and much circumspection are needed before entering upon a
speculation of the kind. It must be said, however, that many companies
formed from trading concerns have become well established and profitable,
and if permanency could be relied upon, they furnish a field for lucrative
investments. Those adventures which are unduly pressed upon the notice of
the public should be regarded with suspicion. If a thing is really good in
itself, it will not require much persuasion to commend itself; and if bad, no
purchased laudation will make it better. A subtle mode of advertising is just
now coming into vogue, which, though expensive, will for a time be

successful. There need be no reflection on the companies which adopt it,
though calcu- lated to beguile the innocent and confiding in- vestor. A leaf
or two introduced in some of our illustrated papers, in no wise differing in
the printing from the remainder of the publica- tion, and appearing as
though it formed part of the regular pabulum offered to the public. This leaf
or leaves contain well-executed pic- tures of the works and machinery and
other interesting objects connected with the industry of a company to which
it is desired to call attention, and a descriptive account is given of its
magnitude and success. To the casual reader all this would appear to be a
matter of public interest, offered to the public as part of the regular business
of the paper, but it is only an ingenious form of advertisement and has to be
paid for as such, but that is of no consequence if the effect is produced, of a
rise in the price of the shares. There are some companies whose shares are
quoted at such enormous premiums, and which pay such high dividends,
that the investor is sorely tempted to embark in similar undertakings,
apparently, that are brought be- fore the public. But these prosperous
concerns are in most cases first taken up by a syndicate — that is, a certain
limited number of persons behind the scenes — who finance and float the
company, and when success has been attained, the public are granted the
privilege of purchas- ing shares — but at such a price as the syndicate
choses to put upon them, and, not seldom, that is the highest they ever
attain. This is particu- larly the case with mining companies, the successful
ones having certainly only benefited the few. This syndicate system has
given rise to a bogus imitation, which, however, appears to have met with
but limited success. Circulars in lithographed writing, marked "private and
con- fidential," and implying a friendly interest in those addressed, are sent
to persons whose names are obtained in the manner already indi- cated. An
invitation is given them to join a syndicate about to be formed to float a
certain company, the profits arising from the operation being certain and
enormous. Again, if it be such an excellent and certain venture, why offer a

share to an entire stranger? These circulars are very speciously worded, and
there is an air of candour about them likely to allure. Anyone foolish
enough to subscribe would probably, after an interval, be informed that
owing to un- foreseen circumstances the adventure had turned out a failure,
and that all the money had gone in expenses. Successful gold mines have
yielded large fortunes to their proprietors, but it must be remembered that
mines have but a limited existence, and once they are worked out the
money invested in them is lost; for when they cease to yield ore there is
nothing more to be obtained from them. Promiscuous dealing in mine
shares is nothing more or less than gambling, or taking part in a lottery in
which the blanks are overwhelming and the prizes next to nothing. If an
enterprise has in it any degree of soundness or promise, there are plenty of
the knowing ones ready to step in and take all the advantages to be gained;
it is the des- perate ventures and unscrupulous swindles that the public are
mostly pressed to support — only to lose their money. It is to be hoped that
the dupes are at length awake to the pit-falls dug for them by the mining
company promoter and speculator, whose seductive paragraphs are
everywhere in evidence in the advertising sheets of the day.

A typical example — and not a fictitious one — of hundreds of knavish
concerns foisted on the public may be quoted. A certain company, of which
no prospectus has been issued, nor of which anything is publicly known,
appears in the mining lists. One day, a paragraph in a financial paper reports
that the agent for the mines, on the spot, has cabled that the promise of
success exceeds all expectations, that samples of ore, yielding three ounces
to the ton, have been found, and that the necessary machinery must be sent
out at once. This is followed up by an editorial leaderette (of course, paid
for), in which the writer expresses surprise that the shares of so promising
an enterprise should be at so low a price, and predicting a rapid advance
when the work is further developed. These notices effect their purpose to
the extent of rais- ing the quotations of the shares a few shillings, but this is

not enough for the promoter; a cir- cular is next issued, in the usual way, to
the effect that the directors have been fortunate enough to secure additional
property near their own, which furnishes wood and water, so essential to the
proper development of the mine, and including, moreover, alluvial pits
abounding in gold. An elaborate lithographed sketch of the property, with
mines at work and a steam-engine, accom- panies the circular, and the
whole presents an appearance of real business. The next move is the
statutory meeting of the shareholders, which, however, is very sparsely
attended, as the vic- tims are chiefly people residing in the country, who do
not care to incur the expense of a journey to London. The man who presides
at the meet- ing, an outside broker, begins a speech by apologising for the
absence of the chairman of the company (of whom the shareholders hear for
the first time), and then goes on to describe with tedious detail the technical
working of the mine, the stopes and veins, and bunches of gold that there
are, and the stamps, machinery, &c., that there are to be. He describes what
has been done in the alluvial pits, and the prospect of wealth to be drawn
therefrom as beyond the dreams of avarice, and winds up with warm con-
gratulation of the proprietors on the valuable property they possess.
Whether he has over- done his part or something prejudicial to the company
leaks out, the shares which had changed hands at 10s. gradually drop to 5s.
Then a circular goes the round in which some member of the ring of knaves
invites the public to join a syndicate to buy up five thousand of these shares
which he has, through peculiar circum- stances, been able to secure the
refusal of at 4s. a share. A special meeting of the shareholders is next called,
when it is announced that more capital is required, and that it will be
necessary to pay up the one shilling per share which still remains
outstanding. A last desperate effort to get rid of the shares at any price is
then resorted to before the call of one shilling per share becomes payable,
and some thousands are offered at one shilling and sixpence each. After the
time has expired for paying the call, a last circular is issued, intimating

briefly that the eminent engineer, who has originally given such a glowing
account of the mine, now reports that there is no present indication of gold
on the property, but that possibly some might be found if they dug deep
enough!

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

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

CHAPTER IX. LIFE INSURANCE.

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

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

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

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

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

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

—————————————————————————————
——————————————————————————————
—————- | PROPOSAL FOR LIFE ASSURANCE | |
——————————————————————————————
——————————————————————————————
———-| | | Full Name
_____________________________________________________ | | |
Profession or Occupation ______________________________________ | |
1. Life proposed to be Assured | Business Address
______________________________________________ | | | Residence
_____________________________________________________ | | |
Married or Single _____________________________________________ |
|
——————————————————————————————

———————————————————————————| | 2. Age
next Birthday ________ years. Born at
_________________________________________________________ | |
on the ___________________________ day of _______________ in the
year 18_________ | | (Evidence to be produced.) | |
——————————————————————————————
———————————————————————————| | 3. Has
he resided out of Europe? | | | If so, where, and for what period? | | |
——————————————————————————————
———————————————————————————| | 4. Is
he, and has he always been, of sober and | | | temperate habits? | | |
——————————————————————————————
———————————————————————————| | 5. Has
he had any serious illness or disease | | | tending to shorten life? | | |
——————————————————————————————
———————————————————————————| | 6. Has
any near relative died of any hereditary| | | disease? | | |
——————————————————————————————
———————————————————————————| | 7. (1)
Has a proposal to effect an Assurance on| | | his life ever been declined?
|____________________________________________________________
_____| | (2) Or accepted at more than the ordinary | | | rate?
|____________________________________________________________
_____| | (3) If so, on how many occasions, and | | | when, and by what office
or offices? | | |
——————————————————————————————
———————————————————————————| | 8. Is
there any other circumstance which ought | | | to be communicated in order
to enable the | | | Company to judge fairly of the risk? | | |
——————————————————————————————

———————————————————————————| |If the |
Name
__________________________________________________________ |
|person has 9. (1) Who is his usual Medical Attendant? | Residence
_____________________________________________________ | |never |
Has known him ________________ years. | |required (2) When was he last
in professional atten- | Date of Attendance
____________________________________________ | |Medical | Ailment
_______________________________________________________ |
|attendance,
——————————————————————————————
———————————————————————————| |the
fact | 1st Friend. | 2nd Friend. | |should be | | (if necessary: see marginal note
to | |stated, and 10. Mention an intimate friend, who is not in- | | Question.) |
|reference terested in this Assurance, to be referred | Name
____________________ | ___________________________________ |
|given to to for information as to health and habits | Residence
_______________ | ___________________________________ | |TWO
friends, of life | Profession or | | |in answer to | Occupation ____________ |
___________________________________ | |Question 10. | Has known
him _____ years | Has known him _____ years. | |
——————————————————————————————
———————————————————————————| |If the |
Name
__________________________________________________________ |
|Proposal be 11. Name, &c., of the person in whose favour | Profession or
Occupation ______________________________________ | |upon the the
Assurance is to be effected? | Business Address
______________________________________________ | |person's own |
Residence

_____________________________________________________ | |life
these
——————————————————————————————
———————————————————————————|
|enquiries 12. Is the pecuniary interest in the Life to be | | |need not be
Assured, which is the object of this | | |answered. Assurance, to the full
amount thereof? | | |
——————————————————————————————
——————————————————————————————
———-| | Sum to be Assured £_____________________________ With or
without Profits? _____________________________________ | | Is the
Policy to be for Life? __________________ Are the premiums to be
payable Yearly? _______________________ | | I do hereby declare that the
above statements are true, and that this Proposal and Declaration shall be
the basis of | | the contract for effecting the above-mentioned Assurance,
which Assurance is also conditional on the accuracy, in all | | respects, of the
statement for the Medial Officer, made, or to be made, by the person whose
life is proposed for Assurance. | | Date
__________________________________ Signature of the Person in | |
whose favour the Assur-
_________________________________________________ | | Witness
_______________________________ ance is to be effected. | | Address and
Occupation ______________________________________ |
——————————————————————————————
——————————————————————————————
————-

The proposer has now to undergo one other formality, disagreeable no
doubt, but absolutely necessary, and that is the medical examination. This is
done by the medical officer of the com- pany who has to certify that the
proposer is free from any defect likely to shorten his natural life, and that he

is sound "in wind and limb." Defi- ciency in the number of the latter is,
however, not considered unsoundness, as a person with one arm, or one leg,
or one eye may be just as good a "life" and therefore equally eligible for
insurance with him who is perfect. All the en- quiries in the form are made
by the Office and the expenses (including the doctor's fee) paid by the
Company.

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

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

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

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

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

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

person aged fifty; and the outlay by the mother could be subsequently
repaid when the child was in a position to do so.

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

BONUSES.

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

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

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

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

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

Non-forfeitable Policies. — This plan provides for the continuance of
insurance upon the life of a policy holder should the insured from any cause

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

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

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

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

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

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

SURRENDERS.

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

or his policy did not carry profits, then the surrender value would be £82
10s. only.

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

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

FIRE INSURANCE.

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

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

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

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

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

There are other offices which insure against loss by special
contingencies, such as damage to glass houses, and cattle, and garden
produce, by hailstorms; destruction of boilers by explosion, of plate glass,
and from accident or disease affecting cattle. There are companies, too,
which insure against accidents sustained by rail, road, or water,

guaranteeing a specified sum in case of death, and compensation in case of
injury. Also societies which take the place of sureties and guarantee an
insurer against loss or default by anyone in his employ; and companies
which undertake to make good any loss arising from burglary or larceny. In
all cases, of course, the liability of the office is limited to a certain declared
amount.

CHAPTER X. BUILDING SOCIETIES.

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

The same applies proportionately to a half share of £50 or to a quarter
share of £25. For example, as regards the whole share, a person paying 13s.
a month regularly to the society is entitled, at the end of ten years, to be
repaid a lump sum of £100, and any bonus added thereto which the profits
of the society may afford. If the term be fifteen years, then, to secure £100,
he will have to pay only 7s. 7d. every month, and if twenty-one years, then
a monthly payment of 4s. 7d. The terms vary in different societies, but those
quoted have been adopted by an exist- ing institution of repute. If the term
of ten years is selected, the depositor will have saved and paid to the society

(with added interest) £78 in all; if the term of fifteen years is chosen he will
have paid £68 5s. in all; and if twenty-one years be adopted, £57 15s. In
either case, at the end of the term he has selected, the depositor will be paid
back £100. Thus any one taking a share for £100, and keeping up the
instalments for twenty-one years, will in the end have paid only £57 15s. for
it — the difference being met by the interest paid by borrowers from the
society. The following table shows particulars of other terms and the
monthly subscription payable:-

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

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

SHOWING THE AMOUNT WITHDRAWABLE AT THE END OF
EACH YEAR FOR THE RESPECTIVE MONTHLY SUBSCRIPTIONS
STATED IN THE ABOVE TABLE.

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

——————————————————————————————
——————————————————————————————

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

0 0 | 91 13 6 | 85 11 11 | 78 15 5 | | 19th | — | — | — | — | — | — |100 0 0 |
92 16 4 | 85 9 2 | | 20th | — | — | — | — | — | — | — |100 0 0 | 92 9 8 | | 21st
| — | — | — | — | — | — | — | — |100 0 0 |
——————————————————————————————
————————————————————————-

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

BORROWERS.

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

—————————————————————— | Term of years. |
Monthly. | Quarterly. | |————————|——————|——————| |
| £ s. d. | £ s. d. | | 1 | 8 14 0 | 26 4 6 | | 2 | 4 10 0 | 13 11 4 | | 3 | 3 3 0 | 9 9 11 |
| 4 | 2 8 9 | 7 7 0 | | 5 | 2 0 3 | 6 1 4 | | 6 | 1 14 7 | 5 4 3 | | 7 | 1 10 6 | 4 12 0 | |

8 | 1 7 6 | 4 2 11 | | 9 | 1 5 2 | 3 15 11 | | 10 | 1 3 5 | 3 10 7 | | 11 | 1 1 11 | 3 6 1
| | 12 | 1 0 8 | 3 2 4 | | 13 | 0 19 8 | 2 19 4 | | 14 | 0 18 9 | 2 16 6 | | 15 | 0 18 0 |
2 14 3 | | 16 | 0 17 4 | 2 12 3 | | 17 | 0 16 9 | 2 10 6 | | 18 | 0 16 2 | 2 8 9 | | 19 |
0 15 8 | 2 7 3 | | 20 | 0 15 3 | 2 6 0 | | 21 | 0 14 11 | 2 5 0 |
——————————————————————

And in like proportion for larger or smaller loans.

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

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

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

The social and moral utility of societies estab- lished for the direct
purpose of aiding a man to become proprietor of his dwelling-house is obvi-
ous, and the above calculations seem to show that a society conducted on

the plan represented would earn an ample margin of profit for all
contingencies.

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

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

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

that some rumour or report influ- ences members and depositors to
withdraw their money, and eventually the coffers are empty and the end
arrives.

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

CHAPTER XI. THE POST OFFICE SAVINGS BANK.

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

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

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

Any person opening an account, that is, de- positing money with a Post
Office Savings Bank, will receive a book in which the amount is entered,
and the signature of the Postmaster and stamp of the office affixed to the

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

Any sum from one shilling upwards (but excluding pence) may be
deposited, subject to certain limits. These limits are £50 a year, that is, no
more than £50 will be received on deposit in any one year, but any
withdrawals during the year may be re-deposited once, and once only. No
more than £200 in all can be held on behalf of a depositor. The reason for
these limits apparently is that the bank was created for the encouragement
of saving habits in, and providing a secure place for, the money of thrifty
people of small means, and not for investment of the capital of the wealthy.
Interest at £2 10s. per cent. per annum, which is at the rate of sixpence a
year, or one halfpenny a month, for each com- plete pound, is allowed on
ordinary deposits and added to the principal; but when, by the addi- tion of
interest or from any other cause, the deposit is raised to above £200, interest
is allowed on £200 only, and the excess over that sum, when it amounts to
£5, is applied to the purchase of Government Stock, unless the de- positor
desires otherwise. When a person has £200 to the credit of his deposit
account, he cannot make any further addition thereto, but the Post Office
will invest this sum, or any part of it, for the depositor in Government
Stock, and he can then continue paying in money to his account as before

until the sum again reaches £200. No more than £200 Government Stock
can be purchased in any one year, and the total amount of stock standing in
a depositor's ac- count at any one time must not exceed £500. The dividends
or interest on any Government Stock is credited periodically to the holder's
ordinary deposit account. When a depositor wishes to withdraw the whole
or any part of his money, he has to fill up and forward to the Savings Bank
Department in London, a notice of withdrawal, and a form for the purpose
may be obtained at any Post Office Savings Bank. He will then receive by
post a warrant, on pre- sentation of which, at any branch Post Office he may
have selected, payment will be made. Pay- ment by a warrant may be made
to another person on behalf of the depositor, provided the latter signs a form
of authority for the purpose, which form may be obtained at any Post Office
Savings Bank.

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

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

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

To any person who has paid the funeral
expenses of the depositor;

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

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

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

APPENDIX

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

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

—————————————————————————————
—————— |Price| | | | | | | | | per | 3 | 4 | 4 1/2 | 5 | 5 1/2 | 6 | 7 | |£100.| pr.
ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| pr. ct.| |——-|————|————|
————|————|————|————|————| | £ | £ s. d.| £ s. d.| £ s.
d.| £ s. d.| £ s. d.| £ s. d.| £ s. d.| | 125 | 2 8 0| 3 4 0| 3 12 0| 4 0 0| 4 8 0| 4 16
0| 5 12 0| | 120 | 2 10 0| 3 6 8| 3 15 0| 4 3 4| 4 11 8| 5 0 0| 5 16 8| | 115 | 2 12
2| 3 9 7| 3 18 3| 4 7 0| 4 15 8| 5 4 4| 6 1 9| | 110 | 2 14 6| 3 12 9| 4 1 9| 4 10
11| 5 0 0| 5 9 0| 6 7 3| | 105 | 2 17 2| 3 6 2| 4 5 9| 4 15 3| 5 4 9| 5 14 4| 6 13 4|
| 98 | 3 1 3| 4 1 8| 4 12 10| 5 2 0| 5 12 2| 6 2 6| 7 2 10| | 96 | 3 2 6| 4 3 4| 4 13
9| 5 4 2| 5 14 4| 6 5 0| 7 5 10| | 94 | 3 3 9| 4 5 0| 4 15 7| 5 6 4| 5 17 0| 6 7 6| 7
8 10| | 92 | 3 5 3| 4 7 0| 4 17 10| 5 8 9| 5 19 7| 6 10 6| 7 12 3| | 90 | 3 6 8| 4 8
10| 5 0 0| 5 11 1| 6 2 3| 6 13 4| 7 15 7| | 88 | 3 8 3| 4 10 10| 5 2 4| 5 13 7| 6 5
0| 6 16 6| 7 19 0| | 86 | 3 9 9| 4 13 0| 5 4 7| 5 16 3| 6 7 11| 6 19 6| 8 2 9| | 84 |
3 11 6| 4 15 4| 5 7 3| 5 19 1| 6 11 0| 7 3 0| 8 6 9| | 82 | 3 13 1| 4 17 6| 5 9 7| 6
2 0| 6 14 2| 7 6 3| 8 10 7| | 80 | 3 15 0| 5 0 0| 5 7 6| 6 5 0| 6 17 6| 7 10 0| 8 15
0| | 78 | 3 17 6| 5 2 10| 5 15 8| 6 8 7| 7 1 6| 7 14 3| 9 0 0| | 76 | 3 18 10| 5 5 2|
5 18 4| 6 11 6| 7 4 7| 7 17 8| 9 3 11| | 74 | 4 1 0| 5 8 0| 6 1 6| 6 15 0| 7 8 6| 8 2
0| 9 9 0| | 72 | 4 3 4| 5 11 1| 6 5 0| 6 18 11| 7 12 9| 8 6 8| 9 14 5| | 70 | 4 5 9| 5
14 3| 6 8 7| 7 2 10| 7 17 6| 8 14 3|10 0 0| | 68 | 4 8 1| 5 17 6| 6 12 2| 7 7 0| 8 1
9| 8 16 3|10 5 9| | 66 | 4 10 0| 6 0 0| 6 15 0| 7 10 0| 8 5 0| 9 0 0|10 10 0| | 64 |
4 13 9| 6 5 0| 7 0 8| 7 16 3| 8 11 10| 9 7 6|10 18 9| | 62 | 4 16 9| 6 9 0| 7 5 1| 8
1 3| 8 17 4| 9 13 6|11 5 9| | 60 | 5 0 0| 6 13 4| 7 10 0| 8 6 8| 9 3 4|10 0 0|11 13
4| | 58 | 5 3 5| 6 17 10| 7 15 1| 8 12 4| 9 9 7|10 6 10|12 1 4| | 56 | 5 7 1| 7 2

10| 8 0 8| 8 18 6| 9 16 4|10 14 3|12 10 0| | 54 | 5 11 9| 7 8 0| 8 6 9| 9 5 0|10 4
3|11 2 0|12 19 0| | 52 | 5 15 3| 7 13 6| 8 12 10| 9 12 3|10 11 4|11 10 6|13 9 0| |
50 | 6 0 0| 8 0 0| 9 0 0|10 0 0|11 0 0|12 0 0|14 0 9| | 48 | 6_15_ 0| 8 6 8| 9 7
6|10 12 6|11 9 0|12 5 0|14 11 8| | 46 | 6 10 4| 8 13 10| 9 15 0|10 17 4|11 19
0|13 0 0|15 4 2| | 44 | 6 16 1| 9 1 10|10 4 6|11 1 9|12 10 0|13 12 9|15 18 2| |
42 | 7 2 9| 9 10 2|10 19 3|11 18 0|13 2 0|14 5 3|16 13 4| | 40 | 7 10 0|10 0
0|11 5 0|12 10 0|13 15 0|15 0 0|17 10 0| | 36 | 8 6 8|11 2 2|12 10 0|13 17 9|15
5 0|16 13 4|19 15 7| | 32 | 9 7 6|12 10 0|14 1 3|15 12 6|17 3 9|18 15 0|21 17
6| | 30 |10 0 0|13 6 8|15 0 0|16 13 4|18 6 8|20 0 0|23 6 8| | 26 |11 10 0|15 7
9|17 6 3|19 5 0|21 3 6|23 1 6|26 18 6| | 20 |15 0 0|20 0 0|22 10 0|25 0 0|27 10
0|30 0 0|35 0 0| | 15 |20 0 0|26 13 4|30 0 0|33 6 8|36 13 4|40 0 0|46 0 0| | 10
|30 0 0|40 0 0|45 0 0|50 0 0|55 0 0|60 0 0|70 0 0|
——————————————————————————————
—————

EXAMPLES OF BUSINESS COMMUNICATIONS.

CORRESPONDENCE.

(Sending Money by Post.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

Sir,
Please place the amount of the enclosed cheques and
notes to the credit of my account and acknowledge receipt

to
Yours faithfully
JANE SMITH.

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

(Requiring Money.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Acknowledging Receipt.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Transfer to Deposit Account)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

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

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Request for Passport and Circular Notes.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Ordering Letter of Credit to Remit.)

Address___________________
Date___________________

The Manager,
Blankshire Bank.

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

N.B. — Remittances in this way can be sent to almost every
town in the civilised world.

(Remitting in this Country.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Lodging Securities at Bank.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

(Order to Receive Dividends.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

JANE SMITH.
Blanktown.

(Ordering Investments.)

Address___________________
Date___________________
The Manager,
Blankshire Bank.

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

Or

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

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

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