4

enlarge  on  it  further,  but  we  will  confine
ourselves  to  the  question  of  the  two  classes
of  In,vestment  Risk  which  may  be  defined
as  follows  :—
1.  —Diminished  Capital.—This  disaster
cannot  be  repaired  out  of  income  except
with  great  difficulty,  and  in  any  event  such
a  calamity  must  result  in  impaired  capital
safety,  if  the  original  rate  of  income  is  to
be  maintained.
2.  —Diminished  Income.—This  minor
investment  inconvenience  can  always  be
rapidly  remedied  if  capital  still  retains,  or
has  improved  upon,  its  original  value.
In  other  words,  Capital  is  the  tree,
Income  is  the  fruit.  The  welfare  of  the  tree
must  always  be  the  first  consideration.  Investors ­
  will  do  well  to  permanently  fix  the
above  axioms  in  their  minds,  and  to  be  guided
by  them  in  all  investment  questions.
Having  fully  grasped  the  all-pervading
importance  of  capital,  our  readers  might  now
jump  to  the  hasty  conclusion  that  successful
investment  simply  resolves  itself  into  being
contented  with  a  very  moderate  income  and
investing  in  nothing  but  the  finest  securities.
Unfortunately,  however,  the  quality  of  the
investments  held  is  not  sufficient  in  itself  to
ensure  capital  safety.