THE WORK OF THE STOCK EXCHANGE
bonds of political subdivisions resemble national government
bonds in their basic characteristics.

Government Securities.— While sufficient space is lacking
here for any adequate exposition of the technical features of
government securities, nevertheless a few essential points may
briefly be enumerated. There is considerable difference among
present-day government securities as to the coin in which they
are repayable. While in most cases the coin of the issuing nation
 is specified, with some “external loans’ the standard coin
of some other nation where the bonds have been mainly sold
may be designated. Some government securities which have
had an international distribution provide for repayment in the
coin of any one of several different countries. Also the practice
 in respect to the redemption or maturity date varies widely—contrasting
 with some temporary government obligations
extending only a few months, are the classic British Consols
or French rentes which, having rio specified maturity date, are
in theory irredeemable. Some government securities possess
sinking fund provisions whereby a certain sum must be periodically
 set aside for retiring and paying off the issue at its
maturity.
Almost all government securities, however, are fundamentally
 based upon taxation, and their value must therefore
depend upon the honor and prospective financial future of their
respective governmental organizations. In the abstract, the
obligation of a government, whether a nation or only a city,
may constitute a claim against all the wealth of its inhabitants,
but practically no way is provided for the holder of a government
 bond in default to attempt to enforce any such claim.

Evolution of the Stock Corporation.—We now come to
the other type of security-creating organization—the private
business stock corporation. As in the case of governments,
something of the historical background of the stock corporation
 must be known before its present-day economic signifi-