Capital goes abroad because it is more wanted in other countries than in
the country of its origin, and consequently those who invest abroad are
able to do so to greater advantage. In countries like England and
France, where there have been for many centuries thrifty folk who have
saved part of their income, and placed their savings at the disposal of
industry, it is clear that industry is likely to be better supplied
with capital than in the new countries which have been more lately
peopled, and in which the store of accumulated goods is less adequate to
the industrial needs of the community. For we must always remember that
though we usually speak and think of capital as so much money it is
really goods and property. In England money consists chiefly of credit
in the books of banks, which can only be created because there is
property on which the banks can make advances, or because there is
property expressed in securities in which the banks can invest or
against which they can lend. Because our forefathers did not spend all
their incomes on their own personal comfort and amusement but put a
large part of them into railways and factories, and shipbuilding yards,
our country is now reasonably well supplied with the machinery of
production and the means of transport. Whether it might not be much
better so equipped is a question with which we are not at present
concerned. At least it may be said that it is more fully provided in
these respects than new countries like our colonies, America and
Argentina, or old countries like Russia and China in which industrial
development is a comparatively late growth, so that there has been less
time for the storing up, by saving, of the necessary machinery.

So it comes about that new countries are in greater need of capital than
old ones and consequently are ready to pay a higher rate of interest for
it to lenders or to tempt shareholders with a higher rate of profit. And
so the opportunity is given to investors in England to develop the