ABSTRACT
From the point of view of the average British or American investor, foreign investment has usually meant the purchase of securities which were publicly issued in London or New York on behalf of a foreign or colonial government, municipality, or private enterprise. The type of investment in which they take part to the greatest extent—the purchase of securities already issued on foreign stock exchanges—is very different from that which characterized most of the pre-war and much of the post-war international investment of Great Britain. It represents the purchase of existing securities rather than the provision of capital for new investment. Investment of this type is therefore more likely to add to the difficulties of maintaining exchange stability than to contribute to their solution and, unlike the more ‘primitive’ types of international investment, there is no presumption that it will serve to promote a more economical utilization of the world’s capital resources.
