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XXI.

CON SOLS I~ A GREAT WAR.!
How far is the present price of Consols due to special and transitory
causes, irrespective of the Government credit, and at what price could
a large amount of the stock be issued if a great emergency should
arise?

QUESTION like what is here proposed is ob·
A viously rather a speculative one. Noone can tell
beforehand what the circumstances of a great emergency ,
in which new borrowing by the English Government
may become necessary, will be. "Ve can conceive of a
possibility such as the sudden outbreak of war with a
great military power and the defeat of the English
fleet by such power. In the case of such an emergency
there will perhaps be no price or regular market for
securities at all. We have also to consider that the
general level of the rates of interest changes from time
to time i and possibly in the next few years the general
level for first-class securities, instead of being at a point
for 2! per cent. stocks between 90 and 100, exclusive
of Consols themselves, which are about 110, might be
such that the general level of even 3 per cent. stocks
would be under what 2!'S now are. I t is conceived,
. however, that the discussion of a question like the
above can proceed upon two assumptions-the first.
that there is a great emergency, but stopping short of
a great calamity and disaster such as one that would
threaten the very existence of the British Empire

1 This paper was prepared for the purpose of a discussion on the
question stated early in June. 1899. How far the price of Consols
has since changed in accordance with the anticipations of the paper
it will be for the reader to judge.
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