Consols Settlement

Explained under "Consols for Account." This settlement consists of a "contango day," "making-up day," and "account day."

Construction Account

" Construction account " is treated as an asset; "capital account" as a liability.' Many corporations expend money and incur indebtedness which they charge to " construction account," with the idea of eventually issuing new capital in the way of stock or bonds, and, from the proceeds of such issue, replenish their cash for money expended or use the proceeds to pay the indebtedness incurred for the items charged to " construction account." (See also " Capital Account.")

1 " By 25 Geo. II. the balance of annuities granted by 8 Geo. I. was carried to a three per cent, stock, formed in 1731, and they were (in 1752) consolidated into one stock - the new stock is still called ' three per cent, consols.' The word consols is a contraction for consolidated." - " History and Principles of Banking" Gilbart.

Constructive Mileage

Allowance by a main line of railway to a branch or connecting line of a greater proportion of the earnings on freight originating on the smaller, and destined to some through point on the main line, than a mileage proportion of such earnings would give it. For example: the main line, 90 miles long, allows the branch line, ten miles long, earning at the rate of two miles for each mile the freight is actually carried by the branch. The branch would not receive one-tenth but two-elevenths of the earnings.


If a London broker makes a sale of a certain stock, deliverable at some future day - in practice upon the "Account-day" or "Pay-day" - and before such date requests a further delay in delivery, or borrows the stock elsewhere to make delivery - the necessity for which might arise from the stock being scarce or oversold - the charge which the purchaser makes for granting him the extension or the charge made by the lender of the stock, is called " backwardation," or "back." If, however, the situation is just the reverse and the purchaser of stock requests a delay in delivery, the charge made for such an accommodation is called a "contango." "Backwardation " is paid by the " bear " and " contango " by the " bull."

Contango Day

(Read last subject.) This is the day on which " contangos " are arranged. It is the first of the " Fortnightly Settling-days." Also called "Continuation Day/' "Making-up Day" and "Carrying-over Day." On this day the settling price is fixed by the London Stock Exchange, upon which all accounts are based and made up. The rate of interest, which is called " contango," is also fixed.