Victorian London - Publications - Etiquette and Advice Manuals - Guide to the Unprotected in Every-day Matters relating to Property and Income, by a Banker's Daughter, 1874 - Chapter III - The Funds and Leading Securities

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THE following statement contains a list of Government and other Stock most frequently dealt in:

Dividends due
Three per Cent. Consols

  Jan 5.
  July 5.

New Three-and-a-half per Cent. Annuities
Two-and-a-half per Cent
India Five per Cent. Stock
Bank Stock

  April 5.
  Oct. 5.
Reduced Three per Cent. Annuities .
New Three per Cent. Annuities
Annuities for 30 years, ending 5th April, 1885
India Four per Cent. Stock
India Four per Cent. Transfer loan April 25.
Oct. 25.
East India Stock Jan 5.
July 5.
East India Bonds March 31.
Sept. 30.



Price of Stock or Public Funds.— Refer to the Daily Papers for the Price of the Stock required. Two prices, are often mentioned. The lowest at which people might have sold. The highest, at which they might have bought. There is little difference from day to day, unless some great political or commercial event has occurred.

"Consols" is an abbreviation of "Consolidated Three per Cent. Annuities." If the Consols are quoted at 92 1/8 to 1/4 it would mean that the public would sell £100. Stock at the rate of 921/8, that is, £92 2s. 6d., or buy at £92 5s. 0d.  Therefore at that price, £92 5s. 0d., it will buy £100 Stock, which always will produce 3 per Cent. to the holder of it; or, in other words, for each £92 5s. 0d., or whatever it may be, the purchaser can get £3 a-year for ever.
    Remember no transaction in the Stock Market [-71-]can be effected, but through the medium of a Broker, whether it be in Government Funds, Railways, or other Securities.

Investing in the Funds.— When you wish to invest any money in the Funds, or other Securities, either write to your Banker, who will employ his Broker, or employ your own Broker. Suppose you wish to buy £200 Stock, write thus:— 

     To the Manager of the — —  Bank,
or To Mr. A. B., Sharebroker, London.

 Please to buy in my name the sum of Two Hundred Pounds Three per Cent. Consols [or other security as the case may be] and procure a Power of Attorney for dividends only [when a Power is necessary].

Anne Baxter.

Or, if you wish to invest a specific amount of money, write:— 

    Please invest £200 in Three per Cent. Consols in my name.

    [-72-] The variation between the two instructions may make a great difference in the sum of money you have to pay. For example, the £200 may suffice to buy £225 of Three per Cent. Consols, whilst if you buy £200 of Three per Cent. Consols, you may only have to pay about £180.

    Dividends on Government Stock are the half-yearly payments of Interest thereon. They are paid regularly, but generally three or four days after they become due. The transfer books used to be shut four or five weeks previous to the payment of the dividends; but now notice is given of a certain day, when any new transfers will be ex-dividend, transfers of Stock going on as usual, but the transferees will not be entitled to a dividend; this change of plan is a very great convenience.
    You may receive your dividends at the Bank of England, if you go in person. If you cannot go, you obtain and sign a Power of Attorney for your Banker or Broker, or anyone you can trust, [-73-] to enable him to receive the dividends for you. In order to protect you from fraud, the Power of Attorney should be made out for dividends only. That is to say, it should authorize the person who is to act on your behalf, only to receive dividends, and not to sell the Stock. After a Power of Attorney has been obtained no new power for dividends is requisite, by reason of your increasing or lessening the amount of your holding, in the same description of Stock.
    With regard to the transmission of dividend warrants by post, notice has been issued by the Bank of England reminding the public that any holder of Stock in the Public Funds, residing within the United Kingdom, may have his dividend warrant sent to his address by post, on filling up and sending to the Chief Accountant a form of application, which may be obtained at the Bank, at any of its branches, or at any money-order office ; and that applications for the transmission of dividend warrants should be lodged at the Bank on or before the 1st of the month [-74-] preceding that in which the dividend is payable.
    When you purchase Government Stock, a receipt is signed by a clerk in the Transfer Office at the Bank of England, and countersigned by your Broker, and is termed a "Stock receipt." This will be sent to you. When you buy Stock, you must keep the Seller's receipt, at least until you have received one dividend upon it; it is then of less consequence, as the receipt of a dividend shows that the Stock belongs to you.

    A Power of Attorney relating to Stock is a stamped letter or document, authorizing one Person, on behalf of another to sell, transfer, or deliver Stock of any kind, or to receive dividends. The expense varies according to what it is wanted for. In most Almanacs you wil1 find the different prices mentioned.
    To obtain such a Power of Attorney, apply to [-75-] your Banker or Broker, who will procure and send it you. You must sign the document with your name in full, or the usual way in which you write your signature, and there must be two witnesses to your signature. These also must sign their names in full or their usual signatures, and add the places of their abode, quality or occupation. If females witness the execution, they must add "spinster," or "widow," or " wife of" stating their husband's address and profession, as the case may be. A husband and his wife are not competent to sign together as two witnesses. No person under age can be a witness, nor can the husband or wife of the person signing the Power.
    When parties attend at the Bank, and receive their own dividends, or execute their own Transfers for the disposal of Stock, no Power of Attorney is required.
    A Banker or Broker cannot act for any of his customers in the sale of Stock, without a Power of Attorney.

[-76-] For Selling our Stock. — The most convenient plan, especially for Ladies, is to apply to their Banker, and for him to employ his Broker; or to write direct to their own Broker.
    Suppose you want to sell out Stock to produce £1,200, you can write thus:

Messrs. — & Co.

    I desire to sell as much of my Three per Cent. Stock [or New Three per Cents. as the case may be] as will produce Twelve hundred Pounds. Please procure a Power of Attorney to sell sufficient Stock to realize that amount only, and cause the sale to be made.

Ellen Layton.

April 3, 1867.

    N.B. Remember, whenever a fresh sale takes place, a fresh Power of Attorney is required, unless you are willing to run the risk of giving [-77-] your Banker, or others, a Power of Attorney for the whole sum you have in the same description of Stock. (Not a wise plan.)

    In about two days afterwards, a printed letter will come, directed to you at your address thus:

"Bank of England.

— Date.

    "Application has been made for a Power of Attorney for a Transfer of Consols standing in your Name.
"A reply to this Communication is only required in case the Application has not been sanctioned by you.

                "Signed A.B.
"Chief Accountant."

    This letter is sent to prevent fraud, and if you have authorized a sale, you need not take any notice of it. If, however, you receive such a [-78-] letter, when no authority to sell has been given, you should communicate immediately with your Solicitor and Banker.
    Suppose the Consols have been sold (say) at 93½ you will receive from the Broker a paper like this:

London, 21, Threadneedle Street.

1st January, 1867.

        Sold for (Here the Banker's or Broker's name will be put.)

£1,280 Consols 93½ . . . . . . £1,201 : 12 : 0
Commission . . . . . . . . . . .
1 : 12 : 0
£1,200 : 0 : 0

John Scott,


To A.B.     

Stock and Share Broker

A Personal Attendance in case of Buying Government Stock — In buying into the Government Stock, [-79-] many people (if in London) like to go themselves to the Bank of England. If you prefer to do so, then, after the Broker has given you the Purchase Memorandum, usually called a Stock-receipt, you must go with him to the Transfer Office in the Bank of England, and see that the amount of Stock purchased, is entered in the Bank books in your name. You must also sign your name in the Transfer books, by which means the clerks will know your signature. The signing your name is called "Accepting Stock." The Bank authorities prefer purchasers doing this personally, as it prevents fraud.

    Personal Attendance in cases of Selling Government Stock.— In selling Government Stock, write down legibly for your Broker, your name, address, and quality, exactly in the same way as it was entered in the Bank books, when you bought the Stock. You must refer to the same address as, "late of , ," if you have removed elsewhere.

[-80-] The Broker will undertake to see that the Transfer is all right. He will give you a plain account of how much Stock he has sold, and what you have to receive. It is the Broker's duty to see that all is done properly; and, if necessary, to identify you as having been the possessor of that amount of Stock. As already pointed out, personal attendance is not necessary either in buying or selling Stock.

A Trustee can transfer Stock to another Trustee, or to the person for whom he is Trustee, on his becoming absolutely entitled to it, without selling it. 
    On a mere transfer of Stock, Brokers charge 1/16 per cent., but on sale or purchase, 1/8 per cent.

    Advantages of investing in Government Stock.— The convenience of investing money in Government Stock is great, because small savings can be readily invested. If you buy in at £80, you will get 3¾ per cent, for your money; if at £85 : 15 : 0, [-81-] 3½ per cent.; if at £92 : 5 : 0, 3¼ per cent.; and if at £100, 3 per cent. It is advisable to keep your papers securely, and undeen by improper persons, to prevent fraud.

    Stock Loan.In lending money to a friend, when you have yourself to sell Stock, in order to obtain the money you wish to lend, you may make an agreement that it shall be a Stock Loan; viz, that the same quantity of Stock shall be replaced that you have had to sell out, in order to raise the money. You will thus be quite independent of the rise and fall of the Stock; otherwise, if the Stock is low, when you lend your money, and high, when your friend returns it, you will be a loser by your kindness.

    To ascertain the Value of Stock.— The price of £100 Stock is sometimes above, but generally below, £100; if above, it is called above par; if below, below par.
Rule to ascertain the value of Stocks or Shares [-82-] Multiply by the price per cent., and divide the product by £100.

    What is the value of £345 of Stock at the price of 81 per cent.?

    It is equal to (81x345)/100 Pounds. The calculation may be made as follows:— 


100) 27945  (£279 and £45/100;

but £45 equals 45 x 20 shilling or 900s.,

therefore £45/100 is the same as 900s/100, or 9s.

Hence the value required is £279 9s.

    If the price had been 81 3/8ths we should be obliged to add to the above 3/8ths of £345/100; 


or 3/8  x (345 x 20)/100 shillings  = 207/8 s.

= nearly 26s. or £1 6s.

£279 9s
      1 6    
and the required value would be    £280 15s.

    Exchequer Bills are Bills issued by the Government on loans for twelve months. They are issued annually, at which time the rate of interest is fixed. They are generally for sums of £100, £200, £500, and £1,000. They have the advantage of being easily converted into money at any time, and of bearing interest up to the day they are either bought or sold. Government calls in the Bills at the end of the year (due notice is always given), when the holder has the option of receiving either a new Bill, or his £too with interest. Holders must not neglect to present the Bills on the day appointed, either themselves or through their Banker, otherwise  [-84-] they will be deprived of the interest till the next opportunity of obtaining new Bills. Exchequer Bills for small amounts are dearer, in proportion, than those for large amounts. You can purchase them through your Broker, and if you have no Broker your Banker will employ his Broker to do it for you.

Stratford-on-Avon, Nov. 8th, 1873.

Gentlemen, — Please to instruct your Brokers to invest for me the sum of £— in Exchequer Bills.

    Yours faithfully,
                            E. F.

To Messrs. —

    Bankers, Stratford-on-A von.



When you want to purchase, write to your Banker or Broker, stating the Railway Company, the description of the Shares or Stock, and the [-85-] amount of money you desire to invest. He will send you a statement of all the expenses attending the entire transaction, such as the quantity of Shares or Stock, commission, transfer-fee, stamps, &c. Send him a Cheque for the amount at the date stated on the purchase-note. The Broker, having the money, will complete the purchase, and send you the transfer paper or papers, for you to sign in the presence of a Witness. Return them to him as soon as you can, that he may have them registered at the Railway Company's Office. When this is done, the Broker will supply you with vouchers, in proof of the Shares having been so registered in your name. Most of the Railway Companies have converted their Ordinary Shares into Stock (a Share or a certain number of Shares being converted into £100 Stock). In this case, one document only is necessary for the whole amount.

    If you want to sell any of your Railway Shares or Stock, write to your Banker or Broker, stating [-86-]  what Railway Company, and the number and description of the Shares, or amount of Stock. 

    Debenture Bonds, especially Railway Bonds, are generally issued for an agreed period, which terminates usually in three, five, or seven years, at a fixed rate of interest. It is a convenient kind of investment. The holder of the Bond has generally the option of renewing it, on the same, or other agreed terms. The Secretary of the Company will always write to you some weeks before the Bond becomes due, asking, whether you will renew on certain terms stated in his letter, or whether you desire to have it paid. If you are willing to renew it at the expiration of the term (even though it may bear a different rate of interest) no new stamp will be required. To the Debenture Bond are generally attached Coupons, or Interest Warrants, which are small pieces of paper a few inches in length: one has to be cut off every half-year, on a day named therein, and sent to your Bankers. Some Com-[-87-]panies require a Draft or Receipt Stamp on the back of the Coupon, and some do not. This will be arranged for you by your Bankers. They will procure from their London Bankers, the sum marked on the Coupon, after deducting the Income-tax.
    You can write thus

To — Bank.
Gentlemen , — Please send the enclosed to be cashed, and place the amount to my credit. Have the goodness to acknowledge its receipt.
                                                                                 Yours, A. B.

    Some people leave their Debenture Bonds, with the Coupons attached, in their Banker's hands, to cut off and present when severally due; but it is better to retain the Bond, and send the detached Coupons only to your Banker.

    Broker not essential.— The investing of money in Railway Companies' Bonds or Debentures, does [-88-] not necessarily require the assistance of a Broker. You can write direct to the Secretary of the Company, or you can make the arrangement through your Attorney. For instance, if you have two thousand pounds to invest, write thus

To the Secretary of the — Railway Company.

    Sir, — I have two thousand pounds which I wish to lend on Mortgage to your Company. I request you to inform me  for how many years you will take the money, and what rate of interest you will allow.
                                                                             Yours, A. B.
My address is —

    Then, if you are satisfied, you can write 

    Sir, — I have received your letter of the The two thousand pounds has this day been paid by my Bankers, to the credit of your account at — Bank.
                                                                             Yours, A. B.

    N.B. The Banker will give a receipt, pending the delivery of the Bond by the Company.

[-89-]  For renewing a Bond

Sir, — Please to in form me whether, and upon what terms, you are willing to renew my Bond of two thousand pounds in your Company.
                                                                             Yours, A. B.

Then, if you are satisfied with his reply, write

    Sir,— I am willing that the Bond for £shall continue on the terms mentioned in your letter, viz. [here state the terms]. I will send the Bond before the present term expires.
                                                     I am, Sir,
                                                                            Yours, A. B.

    N.B. When you send the Bond, register it, and write, "Please send an acknowledgment by return of Post of the arrival of the Bond."

    [-90-]  If you do not wish the Bond renewed, write

    Sir,— The Bond of your Company for £—, which I now hold, will be presented for payment when it becomes due.
                                                     I am, Sir,
                                                                         Yours, A. B.

    Please acknowledge the receipt of this letter.

    Just before the expiration of the term, write 

    Sir,— Your Company's Bond for two thousand pounds will be at my Bankers, Messrs.—, in London, who have instructions to give it up, upon your paying the amount due thereon.
                                                                         Yours, A. B.

    Before sending the Bond to your Bankers to present for payment, write the following receipt on the back of it.

Day of — 18

Received this day the within-named principal sum of £—, together with all interest due thereon.


    [-91-]  Or

    Received the — day of —, 18, from the Company of Proprietors of the — , four hundred pounds, in discharge of the principal sum secured by the within-written Bond of Mortgage.


Leamington, April 5th, 1867.

    Gentlemen,— Please to give instructions to your London Bankers to give up this Bond on the L Waterworks, to the Company's Bankers (Messrs. Gosling & Sharpe) on May 1st, 1866, upon their paying them the principal money with interest from the — day of  —.


    Debenture Stock.— This is created by Railway and other Companies, in extinguishment of their mortgage or debenture debt. It ranks in point of security, immediately before the Guaranteed and Preference Stocks, and is perpetual; that is, the principal is not to be paid back by the [-92-] Company, but can be sold in the Market like other Shares or Stock. The interest is generally payable half-yearly. A recent act of Parliament enables Trustees who are authorized to lend money on Debentures, to take Debenture stock.