¹ For example, Report to the President on Foreign Economic Policies (the Gray report, Washington, 1950), 61 Google Scholar: “Traditionally, the important means of financing the net imports of underdeveloped countries has been foreign private investment.” Or, again, a publication of the Department of State (no. 3719), Point Four: “Foreign investment played a significant part in the rapid development of the United States. It can play a decisive part in the accelerated development of other areas. It is important, therefore, that appropriate measures to encourage the international flow of investment capital be developed.…” Or, an address (mimeo.) by R. M. Bissell, Jr., before the National Planning Association, New York, Dec. 3, 1951: “Those areas underdeveloped in 1851 got developed at quite an amazing rate in the 70 years that followed that date. They got developed without the benefit of the kind of public activities I have been concerned with for the last few years.”

² Data from United Nations, Department of Economic Affairs, International Capital Movements during the Inter-War Period (New York, 1949), 2.Google Scholar

³ Ibid., 81.

⁴ United Nations, International Capital Movements, 3.Google Scholar

⁵ Jenks, L. H., Migration of British Capital to 1875 (New York, 1938), 134 ff.Google Scholar

⁶ Hobson, C. K., Export of Capital (London, 1914), 80.Google Scholar

⁷ Ibid., 131.

⁸ The literature is voluminous; for a description of the market at the time vide Bagehot, W., Lombard Street (London, 1920)Google Scholar; Clapham, J., Bank of England, II (New York, 1945)Google Scholar; Palgrave, R. H. I., Bank Rate and the Money Market in England, France, Germany, Holland and Belgium, 1844–1900 (London, 1903).Google Scholar

⁹ It has been pointed out (see for example Singer, H. W. in the American Economic Review, vol. XL, no. 2, 05, 1950, 473–85Google Scholar) that direct investment which involves capital and entrepreneurial ability from the investing country is essentially off-shore domestic investment activity in its effects on the two localities concerned.

¹⁰ Hobson, , Export of Capital, 147.Google Scholar

¹¹ Statist, supplement, 02, 1914, vi.Google Scholar

¹² See, for example, Hobson, , Export of Capital, 115 Google Scholar, for a general statement; also Ripley, W. Z., Railroads: Rates and Regulation (New York, 1927), 35 ff.Google Scholar, for the United States; Williams, J. H., Argentine International Trade under Inconvertible Paper Money, 1880–1900 (Cambridge, 1920)Google Scholar, passim, for Argentina; Shann, E., Economic History of Australia, (Cambridge, 1930), 287 ff.Google Scholar, for Australia; Glazebrook, G. P. de T., A History of Transportation in Canada (Toronto, 1938)Google Scholar, passim, for Canada; and Jenks, Migration of British Capital, passim, for other examples.

¹³ Mackenzie, J. A. P., “Investment of French Capital Abroad,” Journal of the Royal Statistical Society, 12, 1903, 730.Google Scholar

¹⁴ Hobson, , Export of Capital, 111 Google Scholar, quoting Gilbart, J. W., History, Principles and Practice of Banking, I.Google Scholar

¹⁵ Railroads: Rates and Regulation, 37.

¹⁶ Railroads: Finance and Organization (New York, 1915), 5.Google Scholar

¹⁷ Jenks, , Migration of British Capital, 263.Google Scholar

¹⁸ Ibid., 236.

¹⁹ For a complete account of the Argentine boom and collapse, the reader is referred to J. H. Williams, Argentine International Trade, from which the data in this section are derived.

²⁰ Ibid., 54.

²¹ For an excellent summary of the sources and data relating to Australian borrowing in this period the reader is referred to Fitzpatrick, B., British Empire in Australia, 1834–1939 (Melbourne, 1941).Google Scholar A complete series of annual balance of payments estimates, including capital imports, 1871 to 1930, is given by Wilson, R. in Capital Imports, and the Terms of Trade (Melbourne, 1931).Google Scholar For the pre-1900 period when the separate states had not yet been confederated, the reader is referred to Coghlan, T. A., Labour and Industry in Australia (Oxford, 1918).Google Scholar

²² E. Shann, Economic History of Australia (Cambridge, 1930), 293.Google Scholar

²³ Ibid., 297 and Paish, Statist, supplement, Feb., 1914, iv. The railroad net in 1870 amounted to only 1,000 miles.

²⁴ The ease with which colonial governments floated loans, and banks and finance companies sold stock and acquired deposits in London in 1888 and after is partially explained by the Goschen conversion of the British national debt early in 1888, when British 3 per cent securities were compulsorily converted first to 2¾ per cent, then to 2½ per cent consols. By comparison, Australian (also Argentine, Canadian, and United States railroad securities—vide supra, infra) offered attractively high rates.

²⁵ Fitzpatrick, British Empire in Australia, 161.

²⁶ Wilson, , Capital Imports, 7, 31.Google Scholar

²⁷ Fitzpatrick, , British Empire in Australia, 137, 171–2.Google Scholar

²⁸ The data in the following section that relate to the period 1900–13 are from Viner, J., Canada's Balance of International Indebtedness, 1900–1913 (Cambridge, 1924)Google Scholar; those relating to earlier years were compiled by the author under a research grant from the National Bureau of Economic Research.

²⁹ The par value of Canadian public borrowing was nearly $260 million, which is probably the more appropriate comparison with the Australian figure. The latter is from Wilson, , Capital Imports, 108.Google Scholar

³⁰ Viner, , Canada's Balance, 304.Google Scholar

³¹ Skelton, O. D., Economic History of Canada, 1867–1912 (Toronto, 1913).Google Scholar

³² For a description of the period, see Canada, Royal Commission on Dominion Provincial Relations, Report (Ottawa, 1940)Google Scholar; Innis, H. A., Problems of Staple Production (Toronto, 1933)Google Scholar; Britnell, G. E., The Wheat Economy (Toronto, 1939)Google Scholar; Glazebrook, G. P. de T., A History of Transportation in Canada (Toronto, 1938)Google Scholar; Morton, A. S. and Martin, C., History of Prairie Settlement and “Dominion Lands” Policy (Toronto, 1938).Google Scholar

³³ Vide Singer, 473–85.Google Scholar

³⁴ Computed from International Monetary Fund, International Financial Statistics, 01, 1952.Google Scholar