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.