While the underwriting is going on the prospectus is being prepared by which the subscriptions of the public are invited, and in the meantime it will probably happen that the newspapers have had a hint that a Ruritanian loan is on the anvil, so that preliminary paragraphs may prepare an atmosphere of expectancy.  News of a forthcoming new issue is always a welcome item in the dull routine of a City article, and the journalists are only serving their public and their papers in being eager to chronicle it.  Lurid stories are still handed down by City tradition of how great City journalists acquired fortunes in days gone by, by being allotted blocks of new loans so that they might expand on their merits and then sell them at a big profit when they had created a public demand for them.  There seems to be no doubt that this kind of thing used to happen in the dark ages when finance and City journalism did a good deal of dirty business between them.  Now, the City columns of the great daily papers have for a very long time been free from any taint of this kind, and on the whole it may be said that finance is a very much cleaner affair than either law or politics.  It is true that swindles still happen in the City, but their number is trivial compared with the volume of the public’s money that is handled and invested.  It is only in the by-ways of finance and in the gutters of City journalism that the traps are laid for the greedy and gullible public, and if the public walks in, it has itself to blame.  A genuine investor who wants security and a safe return on his money can always get it.  Unfortunately the investor is almost always at the same time a speculator, and is apt to forget the distinction; and those who ask for a high rate of interest, absolute safety and a big rise in the prices of securities that they buy are only inviting disaster by the greed that wants the unattainable and the gullibility that deludes them into thinking they can have it.

To return to our Ruritanian loan, which we left being underwritten.  The prospectus duly comes out and is advertised in the papers and sown broadcast over the country through the post.  It offers L1,500,000 (part of L3,000,000 of which half is reserved for issue in Paris), 4-1/2 per cent. bonds of the Kingdom of Ruritania, with interest payable on April 1st and October 1st, redeemable by a cumulative Sinking Fund of 1 per cent., operating by annual drawings at par, the price of issue being 97, payable as to 5 per cent. on application, 15 per cent. on allotment and the balance in instalments extending over four months.  Coupons and drawn bonds are payable in sterling at the countinghouse of the issuing firm.  The extent of the other information given varies considerably.  Some firms rely so far on their own prestige and the credit of those on whose account they offer loans, that they state little more than the bare terms of the issue as given above.  Others deign to give details concerning the financial position of the borrowing