STOCK EXCHANGE AN INTERNATIONAL MARKET 529
to pay foreign debts or to purchase foreign goods and services.”
 Useful as this ability is in peace times, it has frequently
 proved a decisive factor in war. Certainly in the
World War if Great Britain had not possessed many hundred
million dollars of American securities negotiable on the New
York Stock Exchange, it might have been impossible for her
to have made the vast purchases of foodstuffs and munitions
here which proved so vital to victory.
Income as well as principal of foreign securities also, of
course, conveys benefits upon the creditor nation. Such income
in fact represents the amount over earned domestic income
which a nation with foreign investments has at its disposal to
save or spend. Such foreign revenue (“unearned income” in
the jargon of our income tax collectors) enables the recipient
country to command imports of goods from other countries
in excess of its own exports of goods. Frequently this fact
has been taken advantage of by creditor nations; British investments
 in Argentine railways, for example, enabled Britain
to accumulate funds there for the purchase of Argentine wheat
and beef, and at the same time to assist in building up the great
new South American country. Sometimes, however, interest
and dividends accruing to a foreign creditor nation are saved
instead of spent, and this usually results in increasing the
negotiable wealth and “unearned income” of the creditor
country.
Lastly, foreign investments do much to extend abroad the
political and commercial influence of the lending nation, to
promote a wider and more sympathetic understanding of foreign
 countries and international problems, and to promote
peace.

The above benefits from foreign security investments, however,
 all postulate the existence and efficient operation of stock
exchanges, particularly in the creditor country, but also in
the debtor countries. In these respects, foreign securities are
~ "® See Appendix XVIII]