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In the first place however I beg to say that the suggestion that borrowing by Debentures is an "anti- quated system" is hardly correct. The system is of course an old one but it is not antiquated in the sense of being out of date or obsolete, and in many respects it has never been improved upon. It is strongly in favour with the Stock Exchange and with the Banks and Financial Houses in consequence of the facility with which Debentures are dealt with, and the system pussesses fror the point of view of the borrower the advantage when the Debentures are liquidated by drawings that the debt is discharged at the same rate of interest as the Securities themselves bear whereas in the case of an invested Sinking Fund, it may, and often does happen that the investments for the Sinking. Fund ave to he made at a lower rate of interest than the Luan itself bears. In the case of Borrowing by Debenture the stamp duty also is only 28/od per cent as compared with 12g/6d per cent in the case of Stuck.
5. It was however on wider grounds that the recommen” dations contained in our letter of the 26th of October were rade. Since the outbreak of the war in South Africa a complete change has come over the Stuck and Money Markets. Previously there was more money seeking investment than was provided for by the issue of 1st class securities and con- sequently every issue of the 1st class and many others of mich lower class were absorbed by the Stock Exchange and the investing public almost as quickly as they were issued. Since the outbreak of the war this condition of affairs has however altogether altered. The market has been swamped
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