Take the case of a speculator who applied for one million of the stock, and who obtained an allotment of £50,000, or 5 per cent of his application. The amount paid on application was £30,000. If he was wise enough to sell shortly after the issue he secured the return of his outlay and a profit of from 1 to 1 1/2 per cent; or from £500 to £750 in exchange for lying out of his money for only a few days. It must not be assumed, however, that "premium-hunters" are invariably successful. There are numerous instances where they have been mistaken in their forecasts, and where stocks or shares have not been fully applied for; in that case they have either to sell at a loss or nurse their holding in the hope that better times will arise. When, therefore, you see in a newspaper that an issue of shares or debenture stock has been applied for three or four times over, you will understand that it does not necessarily follow that the public are prepared to place in the investment three or four times the money actually required. In many cases it simply means that the stock is likely to be a popular one, and that speculators are prepared to swell the subscription list in order to make a small profit.

To return to the main subject - namely, the influences which have caused the present abnormally low price of Consols. After the successful issue of the new Consols in 1902 it was, as I have mentioned, thought that the price would appreciate. The lowest price in 1902 was 92 1/8, and there was a general impression that banks and other financial institutions had left an ample margin for all contingencies by valuing their holdings of Consols at 90. The price has, however, fallen instead of risen since then; and reached its lowest point last month, when it touched 86 5/8. The cause of the collapse seems to have been that the public generally did not appreciate the actual position of affairs. If the recent issues of Consols had been taken up by the investing public there would probably have been no collapse; but as a matter of fact there was a repetition of the speculation of 1896, to which I previously alluded as a cause of the maximum price. The Government issues of Consols and the War Loan were to a large extent taken up, not by the public but by financiers who hoped to unload them on the market at a profit when the price should rise. The price did not rise; and the tightness of money in the United States reacted on the financial position in this country, causing a marked depreciation in all classes of stocks; so that speculators, being unable to hold them longer, had to force them on the market at a time when it was depressed. I have been told that those who knew more thoroughly how the recent Government issues had been taken up were quite prepared for the result; but till recently the opinion was prevalent that an early improvement might be looked for. Probably now we are beginning to learn from experience, and to take a less sanguine view of the financial position. The recent accounts of Scottish banks show that bankers in this country think it is now advisable to value Consols at 85 instead of 90, and this seems wise; for though the speculative holdings have to a large extent been absorbed, it is understood that there is still a considerable amount to be put on the market when times improve. It seems likely, therefore, that there will be no material advance for some time, and that a considerable period must elapse before we see Consols again at par. Of course if there are no special circumstances to make new issues of Consols necessary, and if the Government resumes reducing the amount by the operation of the sinking fund, the smaller supply will inevitably cause an enhancement in price; but the process will probably be slow.

I have already incidentally referred to the 2f and the 2 1/2 per cent Annuities, and need not further take up your time with them; but will pass on to the next item in the Stock Exchange List, which is the National War Loan issued in March 1900 at 98 1/2, and repayable on 5th April 1910 at par. I merely refer to it in order to give a practical example of the calculation of the rate of interest on a security which can be purchased at a discount, and is repayable at a fixed date at par.

The price on 2nd December, when it was last ex dividend, was 97 1/2. Add thereto commission, 2s. 6d., which brings the total price payable by the purchaser up to £97,12s. 6d. The interest of £2, 15s. on an investment of £97, 12s. 6d. is equivalent to £2, 16s. 4d. per cent. The difference between the price paid and par (£100) is £2, 7s. 6d.; and this profit, which the holder will realise on its redemption in 6 1/4 years, if spread over that period of 6 1/4 years, will provide an addition to the interest at the rate of 7s. 8d. per cent per annum, - making the approximate return on the investment £3, 4s. per cent per annum. You will see that this is considerably greater than the return on Consols purchased at the same date; the cause of the difference arising partly from the fact that Consols being a larger stock are more marketable; partly from the preference of the public for a more permanent investment; and partly because the public in many cases do not appreciate the advantage of the profit they will receive at even a comparatively early-date.

I shall pass over the other items in the list of British funds till we come to India stock. The total public debt in India was on 31st March 1902-

Both classes of the debt are sold on the Stock Exchange in this country, although the larger portion of the rupee debt is held in India. I should mention that this rupee stock (or as it is generally called rupee paper) is one of the few exceptions in which the buyer has to pay to the seller - in addition to the market price - the interest accrued from the last payment of dividend to the day of purchase. The exchange value of the rupee has been maintained practically at Is. 4d. since January 1898; but before that date it varied according to the market value of silver - at one time having exceeded 2s., while ten years ago it fell below Is. 2d. The uncertainty caused by the fluctuating value of the exchange, and the consequent difficulty of carrying on business transactions between this country and India, induced the Government in 1898, after the matter had been carefully considered by a commission, to limit the coinage of rupees; and by making the British sovereign legal tender and equivalent to 15 rupees the rate of exchange was practically fixed on the basis of Is. 4d. per rupee. The Indian loans form a charge on the Indian exchequer only, as the Government of India cannot borrow without the authority of the home Government, which does not acknowledge responsibility for the Indian debts.