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200 ECONOMIC INQUIRIES AND STUDIES
price of the best 2! per cent. Railway Debenture Stocks,
viz., 92, or, at most, something intermediate between
that and the 2! per cent. stocks of the London County
Council, or of the Indian Government, viz., 94 or 95.
An easy calculation would thus show that the probable
price of the best new issues at 2!- per cent. in the event
of a great war, allowing for a 15 per cent. fall, will be
something a little over 80, or, say, 85; the correspond-
ing price of the 3 per cent. is~e would be over par, but
there would, of course, be special difficulties in connec-
. tion with an issue of stock over par. These would also
be about the prices, I believe, at which the English
Government could borrow, assuming that the present
extra premium on Consols due to artificial causes is 5
or 10 per cent. A reduction of 10 per cent. from the
present price of Consols would bring them down to
about par, and from that a fall of IS per cent. would
give the price of 85. A good deal will, of course, de-
pend upon the exact amount of the present artificial
premium on Consols. But whatever we take it to
be, some allowance must be made pracJ;ically for the
existence of such a premium when business comes to
be done.
I t is of little use quoting expert authority in such
matters, for experts are not unlikely to differ; but a few
weeks ago I happened to obtain the opinion of a gentle-
man, since deceased, who would be universally recog-
nized in the City as one of the best authorities upon
such a point. As it happened, he had also considered
the matter very fully. His opinion Was that in the event
of a great war and of large issues of Consols by the
English Government at 2! per cent., the price would
probably be about 80, and the price for three per cents.
would be a little over 90. Other authorities seem in-
clined to think that the prices in the case supposed
would be higher than these; but I do not know of any
authority who was quite so well qualified as the friend
to whom I have referred, or who had so fully entered
into all the pros and cons of the subject.