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.