£1,600,000,000.

Lake Wakatip Mail, Issue 2902, 17 January 1911, Page 6

£1,600,000,000.

ENGLAND'S INCREASING FOR* EIGN INVESTMENTS. The exodus of capital from the United Kingdom is a phenomenon the existence of which can unfortunately no longer be disputed. The proof of it is supplied by statistics, official and semi-official, indicating the movements of wealth, by the prices of British securities, which have been steadily falling for a long period, by the opinion of financiers of experience and stockbrokers who know the trend of opinion among the investors, and by such symptoms as the want of employment, which is "a priori" to be expected in a State where capi' tal is moving abroad.

It is the scale of the movement that is disquieting. A gradual and steady investment abroad on a moderate scale is a feature in all highly-civilised communities. The foreign investments of Germany are estimated at £1,500,000,000, though this figure is probably largely in excess of the truth. The foreign investments of France are certainly in excess of £1,400,000,000, the figure given by M. Thery. The foreign investments of the United Kingdom are probably over £1,600,000,000. The best evidence as to THE MOVEMENT OF BRITISH CAPITAL

is contained in the figures published by the Inland Revenue authorities, which show every year the amount of income returned that is derived from Colonial or foreign investments. There are two important defects in this series of figures, which runs from 1883 to 1907 : that a certain amount of capital owned by foreigners is included, and that the statistics are not exhaustive. Still, such as they are, they are very significant. They prove that in the twenty-five years from 1883 to 1907 the British income derived from foreign or Colonial investments has risen from £31,890,000 to £79,587,000. If we suppose that the rate of interest on British capital thus invested abroad is about 5 per cent., which is probably near the actual truth, there will be £2O of foreign investments for each £1 of income, and BRITISH INVESTMENTS ABROAD, including some proportion owned by aliens, have risen from £ 620,000,000 to about £1,600,000,000, or at the annual rate of nearly £40,000,000. In 1906 and 1907 the income from British capital invested abroad rose £13,500,000. On the basis of £2O of capital for each £1 of income, this meant that £270,000,000 of British capital moved abroad in 1906 and 1907. Corroborative evidence as to the scale of this movement is supplied by an interview with LORD ROTHSCHILD in October of 1907, when that financier declared that in 1906 £150,000,000 of British capital had migrated, because of fears of Socialism. In the first nine months of last year the new issues in London of capital totalled £141,000,000. Of this sum £104,000,000 went into Colonial and foreign investments, and only £37,000,000 was invested in England.—London "Mail.