I had not anticipated, when I prepared the syllabus of the lectures, that so much time would have been taken up with the classes of investment already dealt with, otherwise I should not have included Commercial and Industrial Securities; for it seems to me that a full lecture would be required to treat the subject even superficially. In the remaining time at my disposal I can only make a few general remarks on the subject; and, as you will doubtless understand, these remarks are confined to the comparatively few items in the list that may be considered investments, and are not merely speculative securities. The list is, on the whole, of a much wider character than any of the others, and if dealt with thoroughly would open questions of more general interest than any of the other classes. It contains companies connected with all kinds of industries and enterprises, from the most important to the most unimportant, - companies for distributing penny-in-the-slot machines, for making soap and matches, companies owning theatres and menageries, butchers' and grocers' shops, hotels and tea-rooms. On the other hand, it includes the large combinations formed for the manufacture of chemicals, or thread, or electric apparatus, or machinery. The majority, as I have mentioned, are outside the scope of our inquiry, and I can only attempt to direct your attention to one or two of the points to be kept in view in arriving at some judgment as to the few that remain for consideration.

The general rule may, I think, be given to the investor in the first place, to invest only in debenture stock. It might be thought that preference shares are as good as debenture stock when the articles of association provide that no debenture stock should be issued, and such a proposition you are likely to hear advanced; but for one reason alone the position is quite different. In the event of default preference shareholders have no power to take possession of the property, whereas in the case of debenture stock the assets are generally vested in trustees for the stockholders, who could act if the debenture obligations are not punctually met.

In the second place, the investor should carefully scrutinise the prospectuses of the companies he has in view, and should avoid those where a statement of profits merely, and no valuation of the company's assets, is given. The average annual profits may be four, or five, or even ten times greater than the sum required to pay the debenture interest, but that information alone is not sufficient proof that the company's obligation will be good in all time coming; for the profits may depend upon the 'personnel of the management, or on the state of trade in the country; and in a joint stock company equally with other organisations you cannot be sure that the future management will be as successful as the past or the present, or that a particular trade may not come to grief. You should therefore have a valuation before you; and this leads up to the third point, which is, that the security of which you propose to take a part should be well within the value of the property belonging to the company. It strikes one as rather an anomaly that limited liability companies should be able to borrow larger sums than individuals and at cheaper rates, but there is no doubt such is the case. Many lenders who would never think of advancing money to a private firm on security of manufactories or warehouses, and who would require the usual margin of one-third if they lent on the best property, will lend on manufactories or warehouses, and be satisfied with the smallest possible margin (or with no margin at all), when their security takes the form of debenture stock.

In the fourth place, the nature of the valuation should be carefully scrutinised. It is not wise to trust to a valuation of the business as a going concern. Most of you will doubtless have known of many companies which at one time were most prosperous, but from one cause or another had eventually to be wound up, and where the costly machinery and other assets that had been entered in the balance-sheets at large sums were sold by the liquidator for "an old song." Of course if you adopt a principle of this kind you will place no value, whatever on such items as patent rights or goodwill, which we find so often used to swell the value of businesses turned into limited liability companies. In fact if the rules I have mentioned were generally adhered to by investors who wish really good security, I fear that many of the debenture stocks of commercial and industrial companies at present held in high repute would stand at a much lower price than they do to-day. There is no doubt that a large portion of the public think that they are getting a gilt-edged investment when they subscribe for the debenture stock of a company doing a prosperous business, and ignore the possibility of adverse circumstances.

If we ask ourselves the reason of the high estimation in which a good many commercial securities in this country are held I think we shall find that it is to a considerable extent due to a lack of what might be called financial perspective on the part of the public. I am sure many of you will be able to recall examples of successfully managed businesses in your own city being turned into limited liability companies, where all the classes of debenture stock are greedily taken up. The premises where the business has prospered in the past are known to every one. Most people are confident that there is no chance of the collapse of the business, and even if such an unlikely event should take place, they will lose nothing as they will have the property to fall back upon. They forget that the management of the business or its character may change, and that it may even be wiped out altogether by foreign or other competition, and that property sold at a forced sale realises very much less than any estimate made in a time of prosperity. In short, the favourable features of securities at our own doors are apt to bulk largely in our eyes, while really good investments out of our own country are neglected.

In these four lectures I have been able to take up only a few of the classes of investment in the Share List, and I leave the suggestion to your Committee that the large blanks which I have left might be judiciously filled up at some future time by the delivery of a second course of lectures.

It is, however, right before closing that I should mention what one might call the text-books of the investor on the Stock Exchange. The most important and most useful is the volume to which I have several times alluded - namely, 'The Stock Exchange Official Intelligence,' which is published by authority of the Committee of the London Stock Exchange, and is edited by the Secretary of the Share and Loan Department. Similar information, but perhaps not quite so full, is furnished in the 'Stock Exchange Year-Book.' A large number of financial newspapers are published daily and weekly, which give information on financial matters. Some are reliable, - such as ' The Economist' and 'The Statist,' - and some are not.

I have already mentioned that while you should take the skilled advice of a stockbroker you should also study the investment for yourselves, and only accept those where your judgment, after careful inquiry, confirms his opinion. From the text-books I have mentioned you can obtain the information required for the purpose of forming your judgment. It has been my aim in these lectures to indicate one or two of the general principles to be employed in the study and selection of investments, rather than to furnish you with details of the various classes of security.