terms of the issue as given above. Others deign to give details
concerning the financial position of the borrowing Government, such as
its revenue and expenditure for a term of years, the amount of its
outstanding debt, and of its assets if any. If the credit of the
Kingdom of Ruritania is good, such a loan as here described would be,
or would have been before the war, an attractive issue, since the
investor would get a good rate of interest for his money, and would be
certain of getting par or £100, some day, for each bond for which he now
pays £97. This is ensured by the action of the Sinking Fund of 1 per
cent. cumulative, which works as follows. Each year, as long as the loan
is outstanding the Kingdom of Ruritania will have to put £165,000 in the
hands of the issuing houses, to be applied to interest and Sinking Fund.
In the first year interest at 4-1/2 per cent. will take £135,000 and
Sinking Fund (1 per cent. of £3,000,000) £30,000; this £30,000 will be
applied to the redemption of bonds to that value, which are drawn by
lot; so that next year the interest charge will be less and the amount
available for Sinking Fund will be greater; and each year the
comfortable effect of this process continues, until at last the whole
loan is redeemed and every investor will have got his money back and
something over. The effect of this obligation 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