to the Co. without requiring borrow for the purposes of: Might make re-insurances (S: That if within any time before. produced by the board of direct amount of so or upwards, the o and shall cause the account in whic meeting which shall be held after s Two special gen. meetings m The progress of the Co. was the income from prems, was salaries had been considerably The Co continued to carry the Yudential. The successive secretaries Collier; and Mr. D. Macgill CONSOLIDATED LOAN, ANT provisionally regis, in 1845, in shares of 625 CONSOLIDATED SOCIETY 1 founded 1st Jan, 1771. It shares entitling them to an more than five shares. T proposed advantages, and f CONSOLIDATION OF ACTI brought by the same plainti action which might have be it they deem the proceeding order, to jo ( consoll should be made after app with private underwriters, and consequently, although detence identical, vet the nu mumber of subs, which it be It the underwriter deny his but after appearece applic several actions for a Judge's other detencats areeing to ocled & Consolidation Ru CONSOLS Couso represen the name is simply the shop Co Consols the Gov. unity for it. added, itself. The lowest price ever touched by Consols was in 1798, when, on 23rd , they were quoted at 474; in the previous year they had fallen to 47; and the ge price of 1797 was £52; being five-eighths less than the average of 1798. Those offices which were either bold enough or fortunate enough to invest their funds in Consols at this period, and could afford to hold, realized a very considerable profit. It is well known that the Globe, and other offices having large proprietary cap., invested Jargely in Consols early in the present century, and reaped a handsome reward. The highest price quoted in the preceding T. occurred in 1738, viz. £106. In eight different years during the last century they were on an average of the year above par. But on the other hand they fell in 1784 to £57-a difference of £49 in 46 years; but the fluctuation was not so gradual as these last-named figures might suggest. We can, however, only see one phase of the fluctuation in Consols, until we reach the close of the last century. The arrangement of the T. we commence at 1789 enables us to observe not only the comparative fluctuations of whole years against whole years, but of each year within itself. Thus, in 1792 the highest price reached was 97%; the lowest, 728-difference 24%, or more than 25 p.c. in a year! In 1817 the fluctuations of the year were 221; in 1825 they were 19! On many other occasions the fluctuations have been violent; as for instance in 1847-a period of profound peace. The highest price reached during the present century was in 1852, 11th Dec., 101%; the lowest in 1803, 28th July, 50-so that the difference between highest and lowest is more than c. p. c.! The question naturally arises, How far are Consols adapted to the investment of the funds of a L. office? The events of the last few years have drawn especial attention to the point; and yet the consideration of it is not new, as will presently appear. We propose to review some of the best authorities upon the question; and also to notice some points of recorded practice which have been overlooked in a remarkable manner. For the purpose of looking at all sides of the subject, we propose to notice the popular view of the "charming simplicity of the three per cents.' To this end we cannot do better than quote a leader from the Times: There is nothing in the world so negociable at all times and seasons, and under all circumstances, as the Consols. House and land, stock and share, mortgage and bill-everything has its ups and downs; but that which changes least is the three per cents. The commercial spirit loves their modest, faithful, constant character, their equal mind, their moderation in prosperity, their firmness in adversity, their help in time of need, their open, honest countenance, like the good wine that needs no bush. What occasion to advertise the praises of the three per cents., or explain their hidden virtue? Three golden sovereigns on the faith of the British Empire speak for themselves; they require no introduction, no letters of credit, no testimonials, no certificate of analysis by eminent professors, no special adaptation to your particular case, no logic, no rhetoric, no puff, no sermon-nothing whatever but the great fact of those three golden sovereigns, or notes infallibly conveying them. This is the poetry of the subject. Now let us look at the practice. In the hist. of the Equitable we find constant discussions as to the difficulties arising from the fluctuations in Gov. securities, and how they were to be remedied. Within a year after one of the valuations for surplus (that of 1829), Consols fell about 20, and but for the large reserves in hand, the So. would have been in fact insolvent in an actuarial point of view. Mr. Morgan, the Actuary, suggested that, with a view of avoiding such difficulties, some 'mean price" should be used for estimating their Gov. stock investments. If we remember rightly, on more recent occasions this So. has suffered considerably from investment in Consols. Mr. William Morgan, in the preface to the 5th ed. of Dr. Price's Reversionary Payments (1792), speaking of the assets of certain tontine asso., says: When the expenses of management are also deducted, and allowance is made for the loss which is likely to be sustained by investing the subs. in the public funds, where the improvement of money is always uncertain, but particularly so at the very high price which they now bear, it is more than prob. that the shares will fall greatly below the sums which I have stated, and that the surviving members will have the satisfaction to find at the end of seven years that they have barely received their principal, after having endangered the loss of the greatest part of it by dying in the mean time. In the prosp. of the Australian, Colonial, and General L., founded 1839, and of which Mr. E. Ryley was Act., there occurs the following passage: If the directors were not deeply impressed with the absolute security of their proposed modes of investment [mortgages of the first class in Australia], this So. would not have existed; but if these modes be safe (and it is impossible to go beyond the point of perfect safety), then they are really vastly superior to the English funds, as well on account of their much higher rate of int., as because the amount of the principal is not subject to similar variation; whereas many English assurers have seen within their own time the public funds in which they knew their contributions to have been chiefly invested (taking the 3 p.c. Consols as the example of the whole) fall from 97 in 1792 to 47 in 1797; rise and fall between 474 in 1798, and 781 in 1802; again fall to 50 in 1803, and after enormous intermediate fluctuations, regain in 1824 their former price of 97. In 25 years, from 1805, there were five years in which the fluctuation in the price of stock was from 14 to 22 p.c., and eight in which it was from 9 to 13 p.c.; and in 37 years, to 1835, the average ann. fluctuation was about 10 p.c. on the price of stock, and 14 p.c. on the principal invested. It is therefore submitted that the slight commercial risk attending the Australasian investments referred to is not nearly equal to the political risk attached to the public funds (liable also to be powerfully affected by the vicissitudes of trade), more especially at eir present very high prices. In 1848 Mr. James Van Sommer, Sec. to the Managers of the Stock Exchange, pub. Tables Exhibiting the Various Fluctuations in 3 p.c. Consols in every Month during each Year from 1789 to 1847 inclusive, etc. From these we have drawn some of the materials f the preceding T. Those who desire to understand fully the risk attending dealings in Onsols should carefully study these T. VOL. II. to the Co. without requiring partnership accounts to be taken (66). The directors might borrow for the purposes of the Co. any sum up to half the subs. cap. of the Co. (70). Might make re-insurances (84). Then a clause not unusual in D. of Sett. : That if within any time before the next ann. gen. meeting there be discovered in any account, to be produced by the board of directors at any ann. gen. meeting, as aforesaid, any manifest error to the amount of £50 or upwards, the board of directors shall cause such error to be rectified without delay, and shall cause the account in which such error shall be rectified to be produced at the first gen. meeting which shall be held after such error shall have been discovered (92)." Two special gen. meetings might dissolve the Co. (123). The progress of the Co. was very slow. At the fourth ann. gen. meeting held in 1850 the income from prems. was only returned as £2841. Postages, directors' fees, and salaries had been considerably reduced. The Co. continued to carry on bus. down to 1865, when its connexions were trans. to the Prudential. The successive secretaries were Mr. T. G. Western; Mr. E. Thompson; Mr. Noah Collier; and Mr. D. Macgillivray. CONSOLIDATED LOAN, ANNUITY, AND GENERAL LIFE ASsu. Co.-This project was provisionally regis. in 1845, but proceeded no further. The proposed cap. was £500,000, in shares of £25. CONSOLIDATED SOCIETY FOR THE BENEFIT OF YOUTH AND AGE.-An annuity so. founded 1st Jan., 1771. It proposed to grant its members, on terms varying with age, shares entitling them to an annuity of £10 in respect of each share-no member to hold more than five shares. The rates of contribution were altogether inadequate to the proposed advantages, and the So. appears to have had a very brief career. CONSOLIDATION OF ACTIONS [CONSOLIDATION RULE].-If two or more actions be brought by the same plaintiff, at the same time, against the same defendant, for causes of action which might have been joined in the same action, the Court, or Judge at Chambers, if they deem the proceedings oppressive, will, in general, compel the plaintiff, by rule or order, to join (i.e. consolidate) them, and to pay the costs of the application, which should be made after appearance, and before declaration. Every subs. to a pol. made with private underwriters, being a separate contract, is the ground of a separate action; and consequently, although the facts be the same, the cause of action and the ground of defence identical, yet the number of actions brought upon the same pol. is necessarily the number of subs. which it bears-not one of them differing from another except in amount. If the underwriter deny his liability, then writs may be issued against all who underwrote; but after appearance application may be made on the part of the defendants in those several actions for a Judge's order to stay all except one, the plaintiff consenting, and the other defendants agreeing to be bound by the result of such one action. Such an order is called a "Consolidation Rule."-Arnould, etc. CONSOLS.-Consols represent the largest portion of the funded debt of the British Empire. The name is simply the short title of the Three per cent. Consolidated Annuities. each £100 Consols the Gov. guarantees to pay an annuity of 3 p.c. p.a. for ever, and the nation is security for it. The dividends on Consols are paid half-yearly in Jan. and July by the Bank of England on behalf of the Gov. On Consols, as now understood, had their origin in 1751, when an Act of Parl. was passed consolidating several separate stocks bearing an ann. rate of 3 p.c. int. into one general stock. At the time when the consolidation took place, the aggregate amount of the stocks blended together amounted to £9,137,821; but by the funding of additional loans and parts of loans in this stock, it amounted in 1817 to the immense sum of £816,311,940-the highest amount ever reached. The Act referred to is the 25 Geo. II. c. 27 (1752)-An Act for Converting the several Annu. therein mentioned into several Joint-stocks of Annuities, Transferable at the Bank of England, to be charged on the Sinking Fund; and also for Consolidating several other Annu. therein mentioned into Several Joint-stocks of Annu., Transferable at the South Sea House. The only clause to which we need draw attention is that relating to the power of redemption, not from any likelihood of its coming into operation, but rather because its existence is generally ignored. XXIV. Provided also, and it is hereby enacted by the authority aforesaid, That at any time, upon one year's notice, to be printed in the Lond. Gazette, and affixed upon the Royal Exchange in Lond., and upon repayment by Parl., according to such notice, of the said several and respective sums, or any part thereof, for which the said several and respective annu. or any of them shall be payable, by payments of not less than £500,000 at one time, in such manner as shall be directed by any future Act or Acts of Parl. in that behalf; and also upon full payment of all arrearages of the same annu.; then, and not till then, so much of the said several and respective annu. as shall be attending on the said principal sums so paid off shall cease, determine, and be understood to be redeemed; and that any vote or resolution of the House of Commons, signed by the Speaker in writing, to be inserted in the said Lond. Gazette, and affixed on the Royal Exchange in Lond. as aforesaid, shall be deemed and adjudged to be sufficient notice within the words and meaning of this Act. Under the operations of the Sinking Fund, instituted by Mr. Pitt, on the advice of Dr. Price, and under the authority of Parl. (26 Geo. III. c. 31), in 1786, down to its virtual extinction in 1832, various amounts of the funded debt were redeemed, but whether under the operation of this clause does not appear. We propose to present to our readers a more complete T. on the subject of Consols than has been previously compiled, the considerations involved being of great practical importance to ins. offices. The following T. will show the average price of National Securities from 1731 down to 1751, when Consols were created, and from that date down to 1788; the highest, lowest, and mean price of Consols from 1789 down to 1870; the rate of int. realized upon such investments during the entire period; the influence of peace and war; the ann. and decennial range of fluctuation in price; and the amount of the Funded Debt during the larger portion of the entire period. The dates of the highest and lowest prices will furnish some instructive points of obs. The part which the month of January plays is very remarkable : [The prices in the above T. from 1731 down to 1789 are as given in an unpublished work by the late Mr. Griffith Davies (who we assume had satisfied himself that he was quoting prices of 3 p.c. stock or annu.); those from 1789 to 1848 are taken mainly from Van Sommer's Tables. The later figures (since 1848) from a Parl. return pub. in June, 1870, the plan of which, however, is so clumsy that whole years are omitted. This will apply to the items where date of month is omitted-these items have been obtained from other sources. We have checked these returns with other authorities, where practicable, and find some slight disagreement; but on the whole the details will be found accurate. For the general arrangement we are responsible.] The fluctuations shown are very remarkable. They are not entirely dependent upon Peace or War; still less are they dependent upon the amount of the debt, funded and 90 о 90 17 6 £ s. d. Annual Decennial Average yielded. £ s. d. 4 2 9 Amount of 4896 19 4 17 498 I 545,803,318 614,789,091 18 4 9 5 0 752,857,236 4 16 4 2 816,311,940 3 17 4 4 35 4 8 4 794,980,480 |