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CONSOLS IN A GREAT WAR 193
time being artificial, the fall would probably be greater.
The artificial premium in fact would disappear, and
then the English Government securities would share
in the general fall which the outbreak of war occasions.

Before showing in detail the reasons for thinking
that at present the price of English Government securi-
ties is artificial, it will be expedient to discuss generally
what are the conditions of a natural market for securi-
ties of the best kind; that is, a first-rate market.
These conditions appear to be as follows: (I) There
must be a large quantity of the security itself; the
security, in fact, must be large enough for many people
to be interested in it, and for large dealings to take
place. (2) There must also be a large quantity of the
security relatively to the general business of the market.
It is a help to such a security if it is the leading
security in the market, because in that character it
attracts a great deal of speculative interest, and specu-
lative dealings take place accordingly in that security
almost to the exclusion of others. I t was noticed at
the time when English Government securities were
divided into two large classes, one Consols and the
other New and Reduced, that although these two
stocks were identical in every respect in their condi-
tions, yet the fact of the speculative dealings being in
Consols permanently raised the price about a half to
I per cent. above that of the New and Reduced stock,
which was identical in every respect except that of
being called by the same name. (3) There must be a
large quantity of the security in the hands of dealers
and other holders about the market who study the
security and are always ready to buy and sell. This
last condition almost follows of necessity from the
other two; in the case of the leading security in any
market, it could not be leading unless a considerable
amount of it was held from time to time by dealers,
both those persons known as dealers in the market
itself and others who are about the market, and are
II. o