solvency, and the loans stand to them in the same
relationship as the British Government Funds
do to this country. The debts are chiefly repre-
sented by bonds, the same as Colonial Govern-
ment Bonds, and with coupons attached, which,
whether payable in England or their own
country, are collected by bankers in the same
manner. Such European States as Germany,
France, Russia, Denmark, Sweden, and Italy,
always enjoy good credit, and they may be con-
sidered responsible for their financial engage-
ments. In the case of Italy, however, it must
be remembered that the Italian income-tax,
amounting to 20 per cent., is deducted from the
interest, which has also to bear the English
income-tax, whatever at the time it may be.

When investing in Colonial or Foreign bonds,
especial care is necessary in observing the con-
ditions of re-payment. Sometimes it is at the
option of the borrower, but usually at a certain
specified date. Neglect of this precaution may
lead to an investor purchasing at a premium,
and sooner than expected being paid off at par.

Some of these loans, too, are paid off by
annual instalments, lots being drawn to deter-
mine the bonds to be redeemed. If the bonds,
therefore, have been bought at a premium, there
is always the risk of their being drawn for pay-