ABSTRACT
The nature of pre-war international investment may be summed up in one sentence: apart from some loans for political and military purposes by France and Germany, the main body of investment was directed towards undeveloped primary producing countries, and the chief borrowers were those who could offer the highest returns. As a result of the war, this position underwent a considerable change. The United States became a net creditor on a large scale and the foreign investments of most European countries were greatly diminished. Apart from the flotation of public issues in America and direct advances from the United States Government, another source of credit for the belligerents was provided by sale of American and other securities which had been purchased before the war. Reckoned in terms of their pre-war value, French foreign investments fell by more than 55 per cent, and those of Great Britain by more than 25 per cent.
