The Gazette 1912-13

103

MARCH, 1913]

The Gazette of the Incorporated Law Society of Ireland.

4. Buenos Ayres and Pacific Rly. 5% (1912) Deb. Stock, at 106 4 5. Argentine Gt. Western Rly. 5% Deb. Stock, at 111 ... .'.. 4 10 AVERAGE—£4 16s. 9d. per cent. 14 4 In each of the three foregoing groups it is assumed that an equal sum is invested in each security named. Some cautious investors might possibly make the following criticism on the fore going lists. They include :-— (a) Irredeemable stocks likely to decline in capital value. (b) Redeemable stocks the present price of which is par, so there is no margin for appreciation in capital The importance of investment of Capital Moneys in definite Redeemable Securities without option, within certain dates, cannot be over estimated. The course of low yielding perpetual securities during the last 20 years has clearly established the tendency to heavy decline in capital value. The following table will give a few examples of the decline in gilt-edged securities between the years 1901 and the present time :—

EXAMPLE B. Showing an Average Return of £4 9s. Id. per cent. Return per cent. 1. Argentine Govt. 4% Bonds, 1908, at 84 ... ' ... ... £4 15 2 2. Brazil Govt. 4% 1910 Loan, at 82 ... ... ... ... 4 17 6 3. Chesapeake and Ohio Rly. 4i% 20-year Convertible Gold Bonds, at 95 ... ... ... 4 14 8 4. Minneapolis. St. Paul and Sault Ste. Marie Rly 4% 1st Mort gage Gold Bonds,' at 100 ... 4 0 0 5. Prussian 3i% Consols, at 87 ... 4 0 5 AVERAGE—£4 9s. 7d. per cent. EXAMPLE C. Showing an Average Return of £4 16s. lOd. •per cent. \. Chilian Govt. 5% 1896 Loan, at 100... ... ... ... £"5 0 0 2. Chinese Imperial Rly. 5% Gold Loan, at 97 ... ... ... 5 3 1 3. Brazilian Govt. Rlys. Rescission 4% Bonds, at 83 ... ... 4 16 4

1901

1913 Mid. Feb. Prices £ s. d. 74 10 0 76 10 0 66 10 0 97 0 0 86 0 0 81 0 0 76 0 0 102 0 0 70 0 0 77 0 0

I

Average Price f s. d. 94 13

Capital Loss £ s. d.

Consols, 2i% Indian 3% (1948) London County, 2i% Liverpool, 3|-% ... Canada 3%, 1938 ... German Imperial. 3% Caledonian Rlv. 4% Debs. Gt. Northern 3% Debs. ... ... British Columbia 3% (1941) ... ... ... ... ... ... ...

... ... ... ... ... ... ... ... ...

... ... ... ... ... ... ... ... ...

... ... ... ... ... ... ... ... ... ...

9 3 6 0 0 3 6 0 0 0

20

3

9 3 6 0 0 3 6 0 0 0

100 117

1

23 11

8617

20 20 11 12 33 24 26

7 5 6 7 5 0 5

5

100 15

14 15

92 88

6 7 5 0 5

; ' i

135 100 103

London & Nth. Western 3% Debentures

£1018 16

3 £812 10

0

i£206

6

3

AN AVERAGE Loss OF OVER 20 PER CENT.

Even in this List there are two definitely redeemable securities. These are included to show that they are also subject to temporary decline, owing to the remoteness of the due date ; but these stocks will improve as

they approach maturity, and ultimately, of course, the capital value will be paid off at par, so that there will be no final loss on the investment. In the 'case of irredeemable securities there