The chief method by which the National
Debt is reduced is described under the head of
Terminable Annuities.


STOCKS AND SHARES.

The stock of an institution or company is a
fixed sum forming the capital upon which the
concern is carried on, or it is the fixed sum bor-
rowed for certain purposes. Any quantity of
stock may be purchased, but shares, which
represent the capital of a company, can only be
purchased in whole numbers.

The nominal or face value of stocks and
shares by no means necessarily represents their
market value; in fact it is the exception that
they should do so. The market price is con-
tinually fluctuating. Thus, if the price of a
given stock is quoted in the lists and news-
papers at 110, it means that for every £100 of
such stock £10 additional has to be paid, and
the stock is said to be at 10 premium. If, on
the other hand, it is quoted at 90, it means that
£100 of such stock can be purchased for £90,
and the stock is said to stand at a discount of
10. The interest in either case is of course
calculated on the face value, that is, £100.