I have mentioned these five classes of foreign bonds as being possibly the only securities that are worth considering, except those which yield from 3 to 3 1/2 per cent interest, and which may be called" gilt-edged," such as Danish, German, Prussian, French, and Swiss Government bonds. The five second-class bonds have been selected as being not of too speculative a character. Let us look into them separately. The Brazilian 5 per cent Funding Bonds are secured as a first charge upon the Rio de Janeiro customs revenue, with a further charge upon the customs revenue of the other ports should the Rio de Janeiro customs at any time prove insufficient. This charge undoubtedly increases the security of the bonds, and would make them a really good investment if we could trust the honesty and stability of the Brazilian Government. Egyptian securities, which yield about 4 per cent, are probably the best of the five; but their value depends on the continuance of British Government supervision. If that were assured for all time coming there would be no question of the value of the securities; but though it is likely that no change will take place, the contingency has to be taken into account. As to Argentine bonds, the position of the country is improving so rapidly and its resources are so great that if it does not get into trouble with neighbouring Powers there is no reason why its finances should not soon be in a stable condition. It is difficult in the present crisis to form an opinion as to Japanese securities. That country was able some years ago to borrow at 4 1/2 per cent; and if the political horizon had been clear, its credit would probably have been equally good to-day. There seems nothing to fear from want of stability in the government and of the country. The element of uncertainty is caused by the doubt whether it will be able to bear the financial strain of a war with a European Power. In the case of China the stability of its bonds depends, like Egypt, on the continuance of British or at least European control. The earlier loans are secured by the hypothecation of the Imperial Maritime Customs Revenue, and they rank in priority according to date. Some of the later loans have in addition security over the li-kin revenues of certain ports of China. The other gold loans (I say "gold" because some of the Chinese loans are on a silver basis) are therefore amply secured; and provided the maritime customs continue to be managed by Europeans, with an Englishman at the head, there will be no chance of the customs revenue being dishonestly diverted to other purposes. I do not think, however, that any of us would like to guarantee the continuance of the arrangement, although there is no reason to imagine it is likely soon to come to an end.

As I have already mentioned, the stocks in this class are not so likely to come prominently under your notice as some of the others - such as stocks of the British Government, of British municipalities, and of railways in this country and America; but, on the other hand, the different securities are well worth your study from an educational point of view alone. In order to obtain a proper idea of the value of the different bonds it is necessary to consider not only the present resources, but also the past history, financial and otherwise, of the borrowing country; so that the subject should form an excellent training both from a general and & professional point of view.