thoughtful consideration. A levee which is so situated and constructed that it is apt to be easily washed away is by no means a good foundation for investment. Some of these issues have proven quite satisfactory; as a class they yield a high return upon the investment.

Level Premium. A premium determined at the time of taking out a life insurance policy, by which the rate of premium is fixed at the same amount per annum, based upon the age of the insured.

Liabilities. All debts or obligations of any kind to pay money, or its equivalent, are called "liabilities;" something owed.

Capital stock, accounts payable, funded and floating indebtedness, surplus, losses, etc., all appear under this heading.

Liability Insurance. This is a subject to be considered by the investor regarding certain classes of securities. A street railway may be earning enough to pay the interest on its bonds and also good dividends upon its stock; in other words, may be looked upon as a corporation in good financial standing. At the same time, a serious accident may occur, causing a loss of the lives of many passengers and the injury of many others, the blame for which may rest upon the railway company, necessitating large payments in the way of damages. It is possible that the amount of money required for this purpose may not only be equal to the earnings of the railway for a long time to come, but actually cause financial disaster to the company. There are companies which will insure a railway to a limited extent, against loss resulting from accident. The expense of such insurance, however, is so great that comparatively few companies can afford it. The majority of railroads are such large corporations that the loss resulting from any one accident would hardly be serious enough to embarrass the road, so that in this connection the investor, as a rule, need only consider the smaller road. In the latter case, therefore, in lack of the existence of liability insurance, the investor must take into consideration the physical condition, grades, curves, construction, etc., of the property. In such sections of the country where it is possible to build long stretches of road practically without curves and appreciable grades, the danger of accidents is slight. Bad curves

As a general proposition, unless there is special State legislation to the contrary, a claim for damages is subservient to a mortgage. This has been shown by a recent decision of the Supreme Court confirming a decision of the District Court in a Montana case; the Court holding that the section of the statutes of that State which provided that a personal injury claim had a prior right over a mortgage applies only to railroads of commerce and not street railroads, there having been special legislation in regard to the former; the case in question being a claim against the Great Falls Street Railway Co.

and hills, therefore, are very important things to consider in a street railway property, for not only do they count in considering the risk of an accident, but the cost of operation in such a country is far greater than in one with more favourable conditions.

Gas and electric light companies do not offer a great risk of accident to the public for which such companies can be held responsible; at least, the loss resulting from any one such accident would probably be a comparatively small matter, and the investor, as a rule, need not consider "liability insurance" in looking into that class of investment. As a matter of fact liability insurance" is quite generally carried by gas and electric light companies.

For liability in event of accident or damage in relation to vessel property, refer to "Steamship Company Bonds." Many corporations carry what is known as Employees Liability Insurance," which insures, in a very satisfactory way, against loss to the company on account of accident to its employees resulting from its own negligence. This class of insurance is not very expensive and is advisable.

Liability of Shareholders. Refer to "Double Liability" and "Non-assessable."

Lien. A claim against the property which the possessor may retain until the satisfaction of some demand or a debt due him. A mortgage is a "lien." "Liens," however, vary in their character. One may hold the first "lien" against a property which would be equal to holding the first mortgage; in other words, nobody has a prior claim against it. A second lien " would be equal to a second mortgage and so on. This word "lien" has been used in such ways as to confuse the investor. There was an issue of bonds brought out by one of our large railroad companies some years ago, which were called "prior liens," and many investors assumed that these were secured by a mortgage prior to any other, while, as a matter of fact, this was not the case, there having been another issue brought out previous to these, and there was also an issue which came after the "prior liens." The prior liens," so-called, did take precedence over some other obligation, but there was still an obligation preceding them. Many investors who bought these bonds without this understanding lost money thereby.

Life Annuity. A fixed sum of money payable yearly to and during the life of the person or persons entitled to receive the

same.

Life Insurance. Something about life insurance may not be amiss, although it is impossible to allow much space for the discussion of the kind of insurance most desirable or

what class of people ought to be insured, etc. The one point most necessary to be considered, however, is the company or companies in which to insure. Give this salient fact careful consideration, namely, do not be influenced too strongly by the rate of dividends earned by any one company and such like inducements brought to one's attention by the average insurance agent, but look into the plan which a company pursues in the investment of its funds, for upon their safe investment must the insured depend for the ultimate payment of his policy. Much has been publicly printed of late regarding the handling of investments on the part of large insurance companies with much truth, but these companies are solvent, and insurance in them is safer than ever before. It is always possible for any person contemplating insurance to obtain a list of the investments of companies under consideration, and, in lack of sufficient knowledge regarding them, to discuss the list with some competent financial advisor, who, at the same time, may be able to give desired information regarding the character of the men in control of the company.

"Life insurance" is nothing more nor less than depositing one's money in a savings bank, to which is attached the gambling feature of the company that the insured will live beyond a certain period, and the policy holder accepting the wager, and betting that he will not. If there were any way of ascertaining the absolute certainty of living beyond the estimate placed by the insurance companies, "straight life insurance" would be useless. For the privilege of betting that you will not live beyond a certain time, and upon the winning of which bet your estate collects the amount of the wager, you are asked to pay an excessive charge. The cost of life insurance, at this time of writing- 1906 is far greater than it should be, and is necessitated particularly by the cost of soliciting life insurance through the medium of agents. If all agency work could be done away with the cost would be much lessened. Some persons consider that it is against public policy to solicit life insurance, but it is the result of undue competition in business. One of the old life insurance companies in England never has had an agent, and is to-day a prosperous company. It is very likely true, as the insurance people claim, that the rates of that company are no lower than obtainable elsewhere, because the new business secured is not great enough to give it the benefit of a large influx of new lives. That would change, nevertheless, if all companies did away with the agency feature. However, it would be somewhat of a radical revolution to expect such a change in the conduct of this business, and it is fair to say that the very large majority of life insurance companies in America are sound, and that a policy taken in the same, even at the

present excessive cost, is not only safe, but, for a great many people, very desirable. In this connection it may be stated that a recent law has been passed in New York State which compels companies doing business therein to limit their expense account. This will correct, to quite an extent, the excessive cost referred to.

It is not the object here to discourage life insurance; far from it. Rather to encourage it; but there are many instances when it is unadvisable, or at least unnecessary, and possibly a better investment of one's funds might be made.

While the cheapest kind of companies to insure in are the assessment and fraternal insurance" companies, they have not proved the most satisfactory, as is set forth under the subject in quotations. The cheapest kind of insurance is term insurance," so called; that is, the insured receives the face of his policy only in case of death before the expiration of the agreed time; for, in this class, the only expenses which the companies need to figure into the premiums are those resulting from death losses and managerial expenses. But, as policies of this kind are usually taken out to cover some particular risk, they are not commonly of long duration. For the benefit of one's family, a term insurance" policy with renewable features is an inexpensive and desirable form. The "level premium " plan is the best for a man upon a salary or with a certain yearly income, and in which there is little likelihood of any increase. It is more expensive than term insurance" at the start, but not so later on.

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"Endowment insurance" is well worth consideration for those who can afford the increased cost; as it not only carries the feature of the payment of its face value in case of death, but returns the same sum at the end of the endowment period. To that extent it is much like a savings bank. "Endowment insurance encourages an enforced saving, and, when the policies have been properly selected, has proved very beneficial in many cases.

From the standpoint of an investment alone life insurance is absolutely valueless. Savings banks pay better rates of interest. There must be other reasons for insuring than the investment feature to make it worth the while. The interest earned may be a secondary consideration, but must never be a first.

Too great weight should not be attached to inducements frequently advanced by the agent, such as the amount of money which his company will loan upon a policy; its "cash surrender value," etc. The value of such privileges depends entirely upon the person, whether or no he is likely to abuse the same. Some men actually need the incentive which the lack of these privileges would compel in order to encourage

the savings necessary to meet premium payments. Looking at it from the standpoint of one's family, an insurance policy which neither permits one to borrow nor obtain a cash surrender value" upon it, is probably, in many instances, the most desirable.

Lift Prices. "Prices were lifted; " forced up unnaturally. Limelight. In the light of a searching public investigation. Limit. A price which a broker must not go beyond in executing an order for his customer. "His limit to buy was 63." The broker had no right to fill the order at a price in excess of 63. The word "limit" might also be used in restricting the amount to be purchased or sold.

Limited (or Limited Company). Limited liability. "Limited" signifies that by law the shareholders are exempt from personal liability beyond the amount already invested. (See "Double Liability.")

Limited Legal Tender. (First read "Legal Tender.") Money which has "legal tender" qualities only to a certain amount. Example: Our twenty-five cent silver pieces may be used in the settlement of a debt up to $10; i. e. they are "legal tender" only to the amount of $10 in any one payment.

Limited Partnership. Burdick, in his "Essentials of Business Law," says that the idea of a "limited partnership" was borrowed from the French, and first introduced in this country in 1822 by the Legislature of New York.

Such partnership must consist of at least one member fully liable for all debts of the firm and who is likewise a manager of the business. In addition there are one or more special partners" taking no active management of the business, and who are limited for the indebtedness of the firm up to only the amount contributed to capital.

Limping Standard. A country which at one time employed the double standard of gold and silver, but has suspended the free coinage of silver in order to keep its silver coins at par with gold, is considered to have a "limping standard" (Etalon Boiteaux), because silver limps along behind gold without being subject to free coinage. Countries which are not practically upon the "gold standard" are not usually classified as under the "limping standard." If their coins are not at par with gold, they are treated as on the silver standard."

"1

stock;" "line"

Line. "He carries a good line of here meaning special kind. "Line" is also used to denote a certain amount of securities carried more or less continually

I am indebted to Mr. Charles A. Conant for assistance in framing this definition.