COMPETITIVE CONDITIONS IN INTERNATIONAL TRADE. 67
COURSE AND AMOUNT OF FOREIGN INVESTMENTS.

It is impossible to determine exactly the interest of citizens of any
country in property outside its borders. Estimates have been attempted
 chiefly on three bases: Security issues, income-tax returns,
and sums annually receivable and payable on account of exports, imports,
 services, and interest.
If the sum of incomes actually derived from abroad could be determined,
 capitalization of this income would give a fair estimate of
the amount of property owned abroad. The returns of income from
such sources are, however, probably even more defective than those
of domestic income, because concealment is probably easier. Moreover,
 not all the income which is returned, and which has a foreign
origin, is tabulated as foreign. For instance, in Great Britain interest
on loans abroad owned by banks and insurance companies in the
United Kingdom, is confounded with domestic income. So are the
returns from mines, gas and water works, plantations, etc., abroad,
when the seat of direction and management is in the United Kingdom.

The estimate by tabulation of security issues is perhaps even more
defective. It depends primarily on stock-exchange listings or on
issues of securities by banks and financial houses. By this means
can be determined the amount of public loans, and of shares and
bonds of the larger corporations offered on the London or the. Paris
market. No doubt, these items cover the bulk of foreign investments.
State and municipal bonds and railroads were the first great fields
of foreign investment, and these with various public utilities—tramways,
 gas works, water-power and electric developments—still offer
the large opportunities. But there is a considerable residuum of investments
 that may ce distinguished as private: Personal land purchases,
 unincorporated businesses,®small corporations that offer no
securities in the market. On the other hand, of securities offered in
London, no one can tell how many are bought by Englishmen and
how many by Frenchmen, Germans, or Dutchmen.
It is questionable whether better results can be obtained through
the method applied by Bowley, based on exports, imports, interest,
freight, and other sources of income and outgo. This method gives,
subject to its inevitable errors, the amount invested in any year, and,
by taking a sufficient series of years, the total investment existing.’
Bowley himself remarks: “ More reliance may be placed on the
relative rates of increase than on the actual figures. The total can
hardly be estimated accurately within 25 per cent.”

1 Report of the Commissioners of Inland Revenue quoted by Sir G. Paish, in Journal
 of the Royal Statistical Society, September, 1908, p. 469.
2 Arthur L. Bowley, England's Foreign Trade in the Nineteenth Century, revised edi-Hon
 1905. pp. 76. 77 note. 79 note.