But we see that he bought at parity, and that in 1896 Consols touched 114. Had he sold at 110 during that year, his £20,000 in Consols would have realised £22,000. He, however, owed his banker £18,000, so there remained £4000 to his credit. As his own capital in the speculation was £2000 he would have exactly doubled it, and nine-and-a-half per cent. per annum upon £2000 in Consols for close upon two years, with a bonus of £2000 at the finish, is painfully reminiscent of those financial dreams which so very seldom materialise; yet huge blocks of Consols were actually bought during this period of two per cent., and dealt with in the manner aforesaid. Of course, the results were not always so satisfactory as those given in the above illustrations, and no doubt many such ventures ended in a loss, for prizes of this description are for the lucky few; though it is usual to dwell upon them to the mortification of the mutable many. The snatching of profits in this fashion requires skill and considerable patience, and those persons who receive specious pamphlets telling them how money is to be made in a marvellously short space of time by an infallible system may appreciate the plausibility of my illustrations, but yet should remember that they may find the results of similar speculations in Consols very disappointing. The demand for Government securities created by these speculative operations is one of the causes which drive up the price of Consols during periods of cheap money, but it is not by any means the only cause. When the Bank rate advances, and capital can be employed more advantageously in the London short loan market, this period soon comes to an end, and consequent sales depress the Consol market. Very many of the better class securities such as Colonial Government stocks, Foreign Government securities, and so on, yield from three to five per cent., and when the Bank of England rate is at from two to two and a half, though the margin demanded upon such stocks is wider than that required upon Consols, the difference between the interest received in the shape of dividends and that paid as the price of a loan often makes speculative dealings in them decidedly profitable. As the Bank rate increases, and the speculator's profit margin consequently narrows, the tendency is for stocks and shares so "carried" to fall in value. The holders or gamblers then begin to sell, and as the increased supply of such securities is certain not to be met by an enhanced demand on the part of investors, prices must fall. Seeing the better class securities declining in value, those investors who had previously held aloof are tempted to come in, and the greater the reaction, the stronger is the inducement to buy; consequently, the lower prices recede the larger becomes the number of purchasers, until demand overtakes supply and prices again begin to move upwards.