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Our earlier paper ‘The money supply, economic management and the gilt-edged market’ (J.I.A.96, 1) introduced the money supply as being ‘of importance to investment, in general because of possible changes in the economic management in the United Kingdom, and in particular because of the possible implications for the gilt-edged market’. To a large extent these changes have come about; the Authorities are now placing greater emphasis than in 1969 on controlling the money supply and support for the gilt-edged market was withdrawn when the Bank of England published Competition and Credit Control in May 1971.2. The present paper is more fundamental for investment. The introduction to the earlier paper referred to our main research project into the uses of the financial statistics which were first published in 1962 as a result of the Radcliffe Committee Report. Changes in the management of the economy and the gilt-edged market were side issues, however important; the present paper describes some of the interim conclusions of the main project which is still continuing.

Mr. President, Sir, when I received the invitation to give this lecture I felt greatly honoured. I accepted for two reasons. First, for a Fellow of the Institute of Actuaries such an invitation from the Faculty is in the nature of a Royal Command. Secondly, the suggested subject is a natural extension of the field in which I have specialised so far in my professional life.

We unfortunately have a system under which Exchequer financing can, and does, lead to the creation of money quasi-automatically to the extent that the requirements of the Exchequer are not met by genuine savings or taxation. This is the outcome of a financing system perfected in two world wars, when the dangers inherent in the creation of money obviously took second place to other considerations. The utilization of this system in peace-time clearly calls for the utmost restraint.The Earl of Cromer as Governor of the Bank of England in a speech on 18 May 1966.The subject of the money supply suddenly became most topical in the Autumn of 1968. It is of importance to investment, in general because of possible changes in the economic management of the United Kingdom, and in particular because of the possible implications for the gilt-edged market.

This paper is primarily concerned with investment by life offices and pension funds in British Government stocks with lives of more than 5 years, although there are important implications for all classes of investors. Investing in British Government stocks over the post-war period has become a highly technical process. The advent of the electronic computer has opened up an entirely new field of statistical data thus making some of the old methods obsolete. The paper illustrates some of the new techniques developed by the author and his colleagues. Other actuaries have also been developing new approaches and it is hoped that they will contribute to a lively and constructive discussion.

The fluctuations in counts observed for the α decay of 241Am have been analyzed for a possible 1/f component. The data indicate that if 1/f fluctuations exist, the associated flicker floor is probably less than 2 × 10−9.

An experiment to detect the existence of 1/f fluctuations in ..cap alpha..-particle decay rates has been performed. No evidence for such fluctuations has been found.

A discrepancy between experiments to establish the existence of 1/f fluctuations in α decay is discussed. It is argued that the flicker floor reported for direct α counting cannot be due to fluctuations intrinsic to the decay process.