BY THE SAME AUTHOR . OUR MONEY AND THE STATE, SECOND IMPRESSION. 3s. net. STOCKS AND SHARES. FIFTH IMPRESSION. 6s. net. MONEY CHANGING: an Introduction to Foreign Exchange, THIRD EDITION. 6s. net. THE MEANING OF MONEY. FIFTEENTH IMPRESSION. 6s. net. POVERTY AND WASTE. 6s. net. WAR AND LOMBARD STREET. THIRD EDITION. 3s. 6d. net. INTERNATIONAL FINANCE. 6s, net....

"While man cannot live by bread alone. he cannot go on living, even a good life if he really falls short of bread." PROF. J.L. MYERS. First Edition     May , 1916. Reprinted         June , 1918....

Responsibility for the appearance of this book—but not for its contents—lies with the Council for the Study of International Relations, which asked me to write one "explaining what the City really does, why it is the centre of the world's Money Market," etc. In trying to do so, I had to go over a good deal of ground that I had covered in earlier efforts to throw light on the machinery of money and the Stock Exchange; and the task was done amid many distractions, for which readers must make as ki

Finance, in the sense in which it will be used in this book, means the machinery of money dealing. That is, the machinery by which money which you and I save is put together and lent out to people who want to borrow it. Finance becomes international when our money is lent to borrowers in other countries, or when people in England, who want to start an enterprise, get some or all of the money that they need, in order to do so, from lenders oversea. The biggest borrowers of money, in most countrie

Capital, then, is wealth invested in industry, finance is the machinery by which this process of investment is carried out, and international finance is the machinery by which the wealth of one country is invested in another. Let us consider the case of a doctor in a provincial town who is making an annual income of about £800 a year, living on £600 of it and saving £200. Instead of spending this quarter of his income on immediate enjoyments, such as wine and cigars, and journeys to London, he i

So far we have only considered what happens to the money of those who save as long as it is left in the hands of their bankers, and we have seen that it is only likely to be employed internationally, if invested by bankers in bills of exchange which form a comparatively small part of their assets. It is true that bankers also invest money in securities, and that some of these are foreign, but here again the proportion invested abroad is so small that we may be reasonably sure that any money left

We have seen that finance becomes international when capital goes abroad, by being lent by investors in one country to borrowers in another, or by being invested in enterprises formed to carry on some kind of business abroad. We have next to consider why capital goes abroad and whether it is a good or a bad thing, for it to do so. Capital goes abroad because it is more wanted in other countries than in the country of its origin, and consequently those who invest abroad are able to do so to great

When once we have recognized how close is the connection between finance and trade, we have gone a long way towards seeing the greatness of the service that finance renders to mankind, whether it works at home or abroad. At home we owe our factories and our railways and all the marvellous equipment of our power to make things that are wanted, to the quiet, prosaic, and often rather mean and timorous people who have saved money for a rainy day, and put it into industry instead of into satisfying

No one who writes of the evils of international finance runs any risk of being "gravelled for lack of matter." The theme is one that has been copiously developed, in a variety of keys by all sorts and conditions of composers. Since Philip the Second of Spain published his views on "financiering and unhallowed practices with bills of exchange," and illustrated them by repudiating his debts, there has been a chorus of opinion singing the same tune with variations, and describing the financier as a

So far we have considered the working of International Finance chiefly from the point of view of its effects upon the prosperity and comfort of mankind as a whole and on this country, as the greatest trader, carrier, and financier of the world. We have seen that the benefit that it works is wrought chiefly through specialization, that is, through the production of the good things of the earth in the lands best fitted, by climate or otherwise, to grow and make them. By lending money to other land

Apart from the political measures which may be found necessary for the regulation, after the war, of International Finance, it remains to consider what can be done to amend the evils from which it suffers, and likewise what, if anything, can be done to strengthen our financial weapon, and sharpen its edge to help us in the difficult fight that will follow the present war, however it may end. It has been shown in a previous chapter that the real weaknesses in the system of International Finance a