colonies came to London to borrow money for a railway, it said in effect to English investors, “Your railways at home have covered your country with such a network that there are no more profitable lines to be built.  The return that you get from investing in them is not too attractive in view of all the trade risks to which they are subject.  Do not put your money into them, but lend it to us.  We will take it and build a railway in a country which wants them, and, whether the railway pays or no, you will be creditors of a Colonial Government with the whole wealth of the colony pledged to pay you interest and pay back your money when the loan falls due for repayment.”  For in Australia the railways have all been built by the Colonial Governments, partly because they wished, by pledging their collective credit, to get the money as cheaply as possible, and keep the profits from them in their own hands, and partly probably because they did not wish the management of their railways to be in the hands of London boards.  In Argentina, on the other hand, the chief railways have been built, not by the Government but by English companies, shareholders in which have taken all the risks of the enterprise, and have thereby secured handsome profits to themselves, tempered with periods of bad traffic and poor returns.

For many years there was a good deal of prejudice in England against investing abroad, especially among the more sleepy classes of investors who had made their money in home trade, and liked to keep it there when they invested it.  As traders, we learnt a world-wide outlook many centuries before we did so as investors.  To send a ship with a cargo of English goods to a far off country to be exchanged into its products was a risk that our enterprising forefathers took readily.  The ship took in its return cargo and came home, bringing its sheaves with it in a reasonable time, though the Antonios of the period sometimes had awkward moments if their ships were delayed by bad weather, and they were liable on a bond to Shylock.  But it was quite another matter to lend money in a distant country when communication was slow and difficult, and social and political conditions had not gained the stability that is needed before contracts can be entered into extending over many years.  International moneylending took place, of course, in the middle ages, and everybody knows Motley’s great description of the consternation that shook Europe when Philip the Second repudiated his debts “to put an end to such financiering and unhallowed practices with bills of exchange."[3] But though there were moneylenders in those days who obliged foreign potentates with loans, the business was in the hands of expert professional specialists, and there was no medieval counterpart of the country doctor whom we have imagined to be developing industry all over the world by placing his savings in foreign countries.  There could be no investing public until there were large classes that had accumulated wealth by saving,