APPENDIX.
POPULAR FINANCIAL BOOKLET XXI.
(The subjoined Article was written for the issue of the
Financial Review of Reviews of April, 1907).
WORLD'TRADE AND THE GEOGRAPHICAL
DISTRIBUTION OF CAPITAL.
Geographical Distribution of Capital has been put forward by the
author of “Investment, an Exact Science,” as the only known means for
ensuring capital safety and stability. The principle of Geographical
Distribution of Capital is based upon the fact that whilst the trade of
any one country is subject to trade cycles, the trade of the world is
immune from such trade cycles : and that, therefore, whilst the investments
of any one particular country suffer from bad trade in that
country, the investment trade over the surface of the world cannot on
average so suffer. In this article Mr. John Holt Schooling, F.S.S.,
author of the “British Trade Year Book,” etc., makes an independent
investigation of this subject. His analysis is, of course, authoritative,
and his results confirm the accuracy of the argument put forth in
“Investment, an Exact Science.” The subject of capital safety and
stability is one of such vast importance that Mr. Schooling’s article
should be read by all investors who have not yet adopted the system of
Geographical Distribution of Capital, and have therefore, so far, failed
to achieve capital safety and stability.
The idea of the Geographical Distribution of
Capital is based upon the main principle that
safe and profitable investment of capital, as
distinct from speculative finance, depends upon
the sagacious distribution of the investment of
capital in different parts of the world. It has
already been ably shown that the investment of
capital in various securities of one country
exposes the capital invested to considerable and
unsuspected speculative risk. That speculative
risk arises because the state of trade in this or
in that country is the predominant factor that
