The Dominion MONDAY, JANUARY 22, 1923. INVESTMENT WITHIN THE EMPIRE

Dominion, Volume 16, Issue 107, 22 January 1923, Page 6

The Dominion MONDAY, JANUARY 22, 1923. INVESTMENT WITHIN THE EMPIRE

Encouraging indications are afforded from time to time that British business men and financiers are giving increased attention to various aspects of the’ problem of Empire development. A cablegram received towards the end of last week, for instance, reported a motion in which the Association of British Chambers of Commerce supported the principle of Empire settlement by close co-operation with the Dominions, “whereby the public bodies of Britain could take a direct interest in sending chosen groups from one district to selected areas in the Dominions.” These and other developments along the same general line are to be welcomed. At a broad view, however, British financial resources are not yet being concentrated to anything like the extent they might be upon such investments within the Empire as are profitable both to the Mother Country and the Dominions. Now, as before the war, much British capital is going to foreign countries. The present tendency, in spite of the emphasis that is being laid upon the importance of developing the Empire as a British family estate, apparently is to revert to pre-war standards where oversea investment is concerned. The facts are summed up by Lieut.-Colonel R. F. Cottrell in an article in the Nineteenth Century. — An examination of the figures relating to public issues of capital in the British Isles made during a few years preceding the wap shows that apart from private investments, a total of about £150,000,000 was invested overseas each year, although the amount varied considerably from year to vear Of this, a rough average of well over one-half went to foicign countries (mostly the United States and South America) well under a half went to our Oversea Empire, and of the total only about 5 per cent went to the Crown Colonies. The figures available since the war are of little value since tlie financial position of all the belligerents has created an abnormal situation, but, although in 1920 the proportion was well in favour of British Possessions, the amount invested in foreign countries has increased rapidly, until, in 1922, it nearly equals that invested in British Possessions. The pre-war position in regard io the oversea investment of British capital left a good deal to be desired, and as much must be said of the present position as far as it can be estimated. Before the war a great deal of British capital was going annually to the United States, while coincidently Americans were investing heavily in Canadian industries. The United States is not now borrowing from Britain, but last year nearly as much British capital publicly subscribed went to foreign countries as was invested within the Empire These proportions of British oversea investment evidently must bi» altered if justice is to be done to the development of the Empire. Discussing possible means of influencing in the right direction the trend of British investment, Lieut.-Colonel Cottrell makes an interesting suggestion. Failing an imitation of the French method of a special tax on foreign investments, he suggests “the best course would be to impose a heavier income tax on interest derived from all future foreign securities than that levied on interest derived from future British oversea investments, namely, new issues. Alternatively, this might be done for a period of years only.” In this way, he observes, capitalists in the United Kingdom would henceforth be deterred from lending so much of their money to foreign Governments and from becoming shareholders in foreign companies, and would be encouraged, to invest their savings, surplus to home requirements, yrithin the Empire. Whatever may be thought of this particular proposal, methodical efforts certainly should be made to approach the objects at which it aims. There is no doubt that the United Kingdom has much more to gain from financing development in the overseas Empire than from rendering a similar service to foreign countries. Any feasible means of imparting an increased impetus to the investment of British capital within the Empire has corresponding claims to consideration.