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 if the Government is at any time able to borrow at a rate of interest lower than the one which it is paying on the stock. The fact that it is able so to borrow necessarily means that stock prices are relatively high and the yield to the buyer is consequently low, so that the investor will have his money thrown back at him at a time when it is difficult for him to reinvest to his own satisfaction.

A large number of creditor securities has lately been issued with this option in favour of the borrower—stocks with a life of thirty years or so with an option to the debtor to redeem at any time aftenafter [sic] ten years from the date of issue. Obviously such stocks are not so pleasant to hold as those which are definitely redeemable either at the end of thirty years or at the end of ten years. In the first case the investor has the certainty of a comfortable rate of interest for a long time; in the second the short life of the security helps to keep its price steady. With a ten-thirty year stock the borrower is made comfortable at the expense of the investor, who stands to lose whether the ruling rate of interest rises or falls.

With regard to all creditor securities that are redeemable at a date it is important that the debtor should not only engage to repay but to make annual provision during the life of the