The same remark applies to French securities, although the difference is not so great. The Stock Exchange value of the franc is at the rate of 25 to the £1, whereas the actual exchange varies from about 25.10 to 25.35. In the case of Danish and other Scandinavian securities, where the bonds are issued in kroners, the London Stock Exchange calculate the price at 18 kroners to the £1, whereas the actual value ranges about 18.12 to 18.26. When it is stated that the interest is to be payable in sterling, and not at the exchange of the day, the Stock Exchange method works out correctly; but if otherwise, as will be seen in the above cases, the actual amount of stock purchased is in each case of less value than the nominal quotation would lead one to understand - not by a large sum perhaps, but by a sum which practically forms a premium of about 2 per cent in the case of Germany, and of something like 1 per cent for France and Scandinavia.

Another point to be kept in view in the case of foreign securities is the possibility of taxation. As a rule the interest on foreign loans issued in this country is payable free of any taxes which may be imposed by the borrowing country; but in many cases where the coupons are payable abroad the proceeds are liable to taxation. For instance, the coupons on Italian 3 per cent Railway Bonds are subject to an Italian income tax of 20 per cent, and a further tax not fixed in amount. Austrian coupons are subject to a deduction of 16 per cent for Austrian income tax. In the case of Russian securities, Russian tax is not deducted from interest on the loans quoted on the London Stock Exchange, but the interest on a large proportion of the Russian Government issues made on the Continent of Europe is subject to payment of Russian income tax.

The various Russian stocks stand at a price which give a return of 4 per cent, whereas, as you have already seen, the Government stocks of Great Britain, France, and Germany yield only about 3 per cent at present prices. The question of the future of Russia is a most interesting one. On the one hand we are told that it is already overburdened with debt; that a large portion of the charge for its present debt can only be met by further borrowing; and that a financial collapse must come whenever the credit of the country is exhausted. It is also predicted that a social upheaval is imminent; that the great mass of the people are tired of the tyranny of the bureaucracy, and of the corruption of the whole system of government; and that there is a danger of the nation breaking up. The favourable features are that the country has unlimited resources, and that a large proportion of the debt has been borrowed for railways, which eventually may prove a valuable asset. These railways have been built mainly for military purposes and without regard to trade routes, hence they do not pay in the meantime; but as the country develops they may in time become sufficiently productive to meet a considerable portion of the charge for interest on the railway debt. An additional point in favour of the credit of the Russian Government is sometimes advanced - that it paid punctually all the charges on its debts even during the Crimean and Turkish wars.

Another speciality of the foreign stocks, bonds, etc, is worth noting. Many of them are repayable by drawings; and in such cases the purchaser cannot tell at what date the whole or a portion of the investment may be thrown on his hands. It may be next year or it may be thirty years hence. When the bonds have been bought at a discount the holder gains rather than loses by getting them paid in full at an early date; but on the other hand, if, say, he had bought Argentine 6 per cent Funded Bonds last year at 103, and his bond should be drawn this year, he will receive only £100, and will lose £3 by the transaction. A holder of a large number of bonds redeemable by drawings is likely by the doctrine of chances to have the repayments of his capital scattered over the duration of the investment; but bonds subject to drawings which stand at a premium are not suitable for the ordinary investor. Irrespective of a disadvantage of this kind, however, it cannot be said that many of the securities in the list of foreign government securities are suitable for an ordinary investor, who wishes above all things to have his capital thoroughly secured, and to be able to count upon the interest on that capital coming in on the day it is due. The large investor is probably justified in running a certain amount of risk if he divides his investments over a number of different classes of security. The additional interest he receives in consequence of taking the risk is likely to make up for the possibility of a temporary default in one of his investments, provided they are carefully selected. He may reasonably enough say to himself," Gilt-edged securities in this country will yield me no more than 3 to 3 1/4 per cent. I can get 4 per cent on Egyptian bonds, 5 per cent on the best classes of Brazilian and Chinese bonds, and from 5 to 6 per cent on Argentine and Japanese bonds. Although none of these are first-class securities they are not all likely to go wrong at one time, and if even one of the five should default I will still have a larger income than if I had put the same money into gilt-edged home securities."