Most Viewed Automatic Re-investment Of Dividends
Canals And Docks
American Railways
Bonuses
British Government Funds
Banks
Foreign Government Stocks
Borrowers
Colonial Government Securities
Dividends
Least Viewed
Surrenders
Insurance Companies
The Stock Exchange
Loans - The Interest On Which Is Guaran-teed By The British Government
Mortgages
Loans To Corporations And Counties Of The United Kingdom
Table Of Interest On Investments Sample
Terminable Annuities
Railways
Government Annuities
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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.
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