One of the main lures used by the IO to attract timid investors to Indian government loans was yield, the annual dividend paid, which was determined by each issue's interest rate, the price paid for the debentures/stock at issue and various other factors. From 1880 to the First World War, the annual yields of Indian loans, as calculated by the formula interest rate/price x 100, were lower than those of the securities floated by the Crown Agents for the Crown colonies and by the Australian dominions, and far smaller than foreign government issues. The Indian government thus paid relatively less for the money that it borrowed than its counterparts, though, as will be seen, the saving was not as great as first appears. After the First World War, however, yields were higher than those offered by the Crown Agents, and, in some years, greater than Australian loans, though still far below those provided to subscribers of foreign securities (Figure 3).

To further investigate the mysteries of yield, this chapter will examine the prices demanded by the IO for its debentures/stock and the interest rates and ‘extras’ paid to subscribers. It will then examine the type of assets issued before tracing the fall in the popularity of Indian government loans and their eventual repatriation.