STOCK EXCHANGE AN INTERNATIONAL MARKET 529 
to pay foreign debts or to purchase foreign goods and ser- 
vices.” Useful as this ability is in peace times, it has fre- 
quently 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 in- 
vestments 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 for- 
eign countries and international problems, and to promote 
peace. 
The above benefits from foreign security investments, how- 
ever, 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]