14 
of purchase. In that case only two out of the 
three cardinal points, contained in the rule we 
have just set out, were followed. The capital 
was evenly divided over three first-class 
stocks ; the prices of these stocks were identical 
in width of fluctuation ; hut they were all 
subject to the same market and trade in 
fluence ; in other words, they were all subject 
to the general investment conditions obtaining 
on the London Stock Exchange as well as to 
the general trade conditions ruling in Great 
Britain ; for all Trustee stocks are alike in 
this respect, that they are almost solely held 
in this country. This one defect was sufficient 
to nullify the rest of the precautions which the 
investor had taken. 
In this case the loss was due to the 
disregard of the same essential to sound 
investment as is neglected in all investments 
which consist exclusively of British stocks. 
And this same defect is responsible for all 
the losses which are made in investments of 
this type. 
Now, having detailed the dangers which 
assail capital, we will next consider the risks 
attendant upon the safety and regularity of 
income. Income is paid out of revenue. In 
the case of Government and Corporation stocks, 
revenue is derived from rates and taxes raised