Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-10-17
BY CHARLES M. PEPPER.

BY CHARLES M. PEPPER.
m NGLAND'S resources in foreign
In lands are getting to be one of
1T. the underlying questions of tho
Il great war. They are vast. The
Income from them undoubtedly Is a
source Of strength to the allies
1t used to be said that the Bank of
England was Britain's chief resource
1t Is still so in one sense. 1t holds the
ultimate cash reserve of the British
empire. 1t is the mechanism through
which the government operates in p1ac-
ing government loans, in obtaining cash
advances as they may be needed and in
mobilizing the finances of the nation
for war purposes.
This historic institution during the
last twelve months has seen some
cherished traditions destroyed. 1t has
been the means of financial operations
on behalf of the government which are
startling innovations on the practices
of two and a half centuries.
Conservatism. as once understood. has
been given a new Interpretation. but
none of these innovations on old theor-
les and practice has been private OPP
erations. The British empire is back
of them. and the new departures are
not therefore considered as dangerous.
In the war emergency the .'Old Lady Of
Threadneedle Street" has shown vigor
and vitality such as have renewed the
venerable institution's youth.
1t has been said that the Bank OF
England is less a factor in foreign in
vestments than in the domestic In
vestments. But the capital OF the peo-
pie of England which is invested
abroad passes through so many sources
that the function of single institu-
ton in apportioning 1t cannot always
be clearly shown. Yet the Bank OF
England is back of the foreign invest
ments as we'll as of the home invest
ments of the United Kingdom.
English authorities, among them Sir
George Paish. who came to the United
States with the first finance commits
sion, have estimated that the wealth
of the United Kingdom is now between
$50, 900, 900. 900 and SIS, 900, 100000. When
Waterloo was fought it was estimated
at 1880, 100000.
This enormous increase in national
wealth sometimes is cited to show
how much better England is prepared
to fight the present war to finish
than she was when she engaged in the
Napoleonic wars. There are some flaws
in the analogy that is drawn, but their
discovery may be left to those who are
particularly interested in analyzing the
economic and financial side OF the
world struggle.
England's position is unique in the
large amount of her capital which is
invested abroad as compared with that
of the other belligerents. The economic
strategy of mobilizing these invest
ments is as important as the strategy
which governs the movements OF the
armies of the allies.
1t is estimated that the income of
the people of the United Kingdom in
creased from $3.50. 100000 at the Wa
terloo period to s12,00o,00o,o00 at the
period when the Zeppelins are raining
bombs on London and aiming unsuc-
cessfully at the Bank of England
A calculation which seems to be rea.
sonably accurate is that $1,000, 100000
of this income is in the form of divi-
dends and interest on investments
abroad. These Investments are calcu-
lated at $4,000, 100000 out of the to-
tai national wealth of $4,000, 100000.
The British government at the out
break of hostilities restricted subscrip-
lions to new securities outside the
British empire, but the restriction was
not absolute. The purpose was to keep
at home any surplus capital available
for investment and to make it easier
to float government loans.
| An exception to the restriction was
made in the case of the Argentine Re
| public, because of the very large Brit
ish Investments there and the need
of Strengthening them. The Argentine
000, 900 was divided equally between
England and the United States. Some
difficulty was experienced in filling the
British quota
The investments of the United King
dom abroad usually are divided into
colonial and foreign. The distinction Is
maintained not only as matter of
convenience, but also for reasons of
imperial policy.
Colonial loans are encouraged as a
means Of binding the widely separated
parts of the empire more closely to the
mother country. Since Englands colo
MES are in every corner of the world,
English capital in the form of loans.
sometimes of a government character
and sometimes for private enterprises.
is also to be found in every corner of
the world.
In 1913, which was a peace year and
therefore normal. the United Kingdom
made investments abroad to the
amount of approximately ss61,ooo,o0o,