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The article describes the types of collateral held by investment trusts as a basis for their own security issues and presents the theories underlying the use of the various types of investment trust securities. The author describes an investment trust as a financial institution dealing professionally in the investment of securities with due regard to diversification. He also discusses the two types of investment trusts in the U.S. which are distinguished by the type of collateral they hold, and the three theories of investing used to operate the trusts.

The article considers market trends in the financial services industry as of June 10, 1931. The key monetary feature of the week is a reduction in the average collateral required by banks for loans on securities. Also noted is the rally in stock prices during the week which was preceded by a record low for the depression. Bond prices have reportedly reflected the pessimism of investors over the business outlook.