to redeem, of course,
makes the market in the loan very steady, because the chance of being
drawn at par in any year, and the certainty of being drawn if the
investor holds it long enough, ensures that the market price will be
strengthened by this consideration.

Such being the terms of the loan we may be justified in supposing--if
Ruritania has a clean record in its treatment of its creditors, and if
the issuing firm is one that can be relied on to do all that can be done
to safeguard their interests, that the loan is a complete success and is
fully subscribed for by the public. The underwriters will consequently
be relieved of all liability and will pocket their 2 per cent., which
they have earned by guaranteeing the success of the issue. If some
financial or political shock had occurred which made investors reluctant
to put money into anything at the time when the prospectus appeared or
suggested the likelihood that Ruritania might be involved in war, then
the underwriters would have had to take up the greater part of the loan
and pay for it out of their own pockets; and this is the risk for which
they are given their commission. Ruritania will have got its money less
the cost of underwriting, advertising, commissions, 1 per cent. stamp
payable to the British Government, and the profit of the issuing firm.
Some shipyard in the north will lay down a battleship and English
shareholders and workmen will benefit by the contract, and the investors
will have got well secured bonds paying them a good rate of interest and
likely to be easily saleable in the market if the holders want to turn
them into cash. The bonds will be large pieces of paper stating that
they are 4-1/2 per cent, bonds of the Kingdom of Ruritania for L20,
L100, L500 or L1000 as the case may be, and they will each have a sheet
of coupons attached, that is, small pieces to be cut off and presented
at the date of each interest payment; each one states the amount due
each half year and the date when it will have to be met.

Bonds are called bearer securities, that is to say, possession of them
entitles the bearer to receive payment of them when drawn and to collect
the coupons at their several dates. They are the usual form for the
debts of foreign Governments and municipalities, and of foreign railway
and industrial companies.

In England we chiefly affect what are called registered and inscribed
stocks--that is, if our Government or one of our municipal