Why Consols 

 are Down. 



LoNDOy; Aug. I, 19 1 2. 

 Consols have fallen with a 

 most bewildering persist- 

 ence in the last few years, 

 antl now have reached a 

 point formerly thought impossible. This, 

 of course, has brought prospective disaster 

 upon the m^y who placed their small 

 savings in national bonds, with a sort of 

 belief that never could ,:;6'ioo be worth 

 less than ,£,'100. Their interest is all right, 

 but their capital is all wrong. There are 

 numerous causes apparent to all, and others 

 less clear, why Consols have gone down. 

 We are concerned with them rather as an 

 advertisement to the world of the country's 

 credit than in the more technically financial 

 aspect. Is there anything radically wrong 

 with the country, and if so, what is it ? 'i'o 

 us the answer seems quite simple, always 

 leaving aside the question of how far parry 

 jjolitics and political platforms mav momen- 

 tarily atlect the outward signs of national 

 credit. Originally, when distances were 

 greater and the Empire was smaller in 

 actual lounting size, the price of Consols 

 represented the guarantee of Great Britain, 

 and was only adversely affected by the risks 

 of this country, since it was this country 

 alone which decided on action or inaction. 

 In other words, it was rrui\' a national 



security. What do we find to-day? The 

 case is very different. The various parts of 

 the Empire, while tending politically to 

 draw together around the Mother Country, 

 are financially independent, borrowing on 

 their own credit, and spending the results 

 of their borrowing within their own fron- 

 tiers. Thus the effective guarantee behind 

 Consols has diminished very materiallv- 

 On the other hand, the risks affecting the 

 price of Consols have not diminished ; 

 they have increased considerably. Every 

 Dominion across the seas feels that it has 

 the right to decide world questions for 

 itself, and thus this country's credit has not 

 only to bear the- risks of decisions taken 

 in London, but of possibly purely local 

 decisions, without any direct interest to 

 (ireat Britain, taken in Ottawa or Mel- 

 bourne. Can we, then, wonder that the 

 price of Consols goes steadily down ? It 

 would be a miracle were it not so, and we 

 can also understand why British national 

 bonds have fallen in value proportionately 

 more than those of other countries. 



To-day we find that 

 Imperial Credit \ arious parts of the Empire 

 I • °\-< A ;ire paying less for their 



Imperial Needs. 1 y o 



borrowed money in this 

 countrv than is yielded by Consols at their 

 present price. Tliis is a startlini^ fact, and 



