turns on a paltry and unpopular estimate of pounds shillings and pence. A political blunder might be lightly survived by Mr. Gladstone, but an economical mistake might be a serious calamity to an investor of moderate means. If the Nationalist party are disinclined to protect rights in land, and are not particularly cordial towards their best local industries, such as the linen manufacture, an intending investor naturally distrusts the lawabiding instincts of the new régime. Not even Mr. Gladstone's eloquence can persuade him that capricious legislation can make rich and strong a people endowed with a poor soil, if such legislation encourages thriftless habits or lawless instincts. The sources of national wealth lie deeper. The severance of the last link which binds Ireland to England is a good phrase, and has a fine free ring about it. No doubt it tickles the ear of the Nationalist, who has not been overthrifty in the past and would like to shirk work in the future. But the colder-blooded business man will note that, when this last link is severed, capital and credit will go down in the general crash. He will be apt to reflect that, while absolute independence is intrinsically a noble thing, its permanent beauty is largely dependent on environment. Of course freedom attended by prosperity commands the admiration of the civilized world. But freedom associated with famine makes at best a gloomy picture. A particular form of government is like the bubble on the champagne. It is the vintage that determines the bubble, and not the bubble the vintage. The governing body will represent, with some rough approximation to accuracy, the character and qualities of the constituencies which confer power. If constituencies exhibit characteristics which fail to inspire faith in their just, temperate, and law-abiding instincts,

the confidence of the investor will be proportionately discounted. "If," he will ask, "they do these things in a green tree, what shall be done in the dry?" He will regulate his investments accordingly.

Then, again, as regards the European outlook, it may well be that a firm foreign policy will eventually secure peace. But, if the past be any guide to the future, it is impossible to dismiss all apprehension under this head. It is enough for the present purpose to indicate that a European war is, in the last degree, unfavourable to confident and liberal investment in European securities, outside the British Empire.

As regards English land and the industries directly appurtenant thereto, it would of course be absurd to dogmatize. But it is still worth noting that-next to serious calamities involving wholesale destruction of material assets-nothing tends so directly to depress property, and to chill legitimate investment in its development, as uncertainty affecting existing rights. England's well-wishers cordially hope that English land may recover its prestige and profit. But would any prudent lawyer, in the face of State socialism and foreign competition, recommend his clients as landowners to expend their means lavishly on the development of their freeholds? Would he not rather advise them to invest their capital in more remunerative and more readily convertible securities, and to become tenants of whatever land they require? If there be any truth in this view, it is probable that, in the course of the next few years, we shall see large accumulations of unemployed money seeking such investment as may combine reasonable security with fairly remunerative interest. The question arises, where is a suitable sphere of investment to be found?

The feasibility of judicious investment in America has of late been the subject of warm discussion in European circles; and grave issues have been raised by the partisans of incompatible theories. There are many who think that, whenever Europe invests capital in America, it will of necessity follow that America will make the profit, and that Europe will have to be content with the experience. There are others who think that the existing Constitution of America affords a substantial security for vested interests. They hold that written provisions, which [amongst other things] forbid the impairment of a contract and are subject to interpretation by the Supreme Court of the United States, are more trustworthy safeguards to vested interests, than the personal discretion of any advanced reformer. They would rather risk their money on provisions, which cannot be repealed except by a very deliberate verdict of a whole nation, than on impulses referable to the personal career of any individual statesman, who may have acquired the power of over-riding-but does not, in the last resort, adequately represent the convictions of educated people. They consider that, as it is in times of internal peace that prosperity goes forward "by leaps and bounds," invested money has, on the whole, a better prospect in America than else"where. It is not the purpose of these notes to determine the comparative merits of such conflicting views. Their purpose is simply to submit some conclusions gathered from many years of residence in the Country, and many years of intimate acquaintance with the inside history and conditions of current, and especially railroad, investment. By persons well informed on this subject such notes may rightly be regarded as ancient history expressed in an unattractive form. But all are not experts in foreign

business. There remain the uninitiated, who-by lack of time or the pressure of other engagements-have been constrained to invest in American securities, without forming any critical judgment of their own on any specific sphere of investment. To such the present notes may perhaps furnish suggestions tending to guide the judgment in the protection of existing, and the choice of future, investments. Roughly stated, the vital questions for a European investor in American securities are something like the following: Are the losses and disasters of the past properly referable to conditions inherent in American securities, as such, or have they resulted in great part from exceptional misfortune, or the contributory negligence of the investor; and, if so, to what extent? Was it or was it not, in the past, competent to investors to discern the signs of the times, with a nearer approach to correctness than they ever in fact achieved? Is it competent to them in the future, by the observance of a few simple indications, to avoid the graver class of mistake? Obviously, life is not long enough for an exhaustive examination of every proposed investment. But, if serious error is to be avoided, are there any landmarks intelligible to the casual observer which may suffice -if not to indicate reasonably safe routes-to warn the traveller against dangerous pitfalls? To the mind of the seafarer the lighthouse is not as exhaustive as an ocean chart. But nevertheless it fulfils a useful purpose. It appeals to the eye of the unwary, and marks the existence of a dangerous reef, though it makes no pretensions to map out safe channels. It seems to the writer that the chance of doing something in this direction might justify a modest effort. In this view of the subject, the scope the present notes is strictly limited, and their object is

of

the reverse of ambitious. An endeavour has been made to subserve the convenience of the reader by the addition of a comprehensive index.

The total capital invested in American railroads represents an enormous sum. Its precise dimensions cannot be determined with absolute exactness, because there exists a wide difference, in the first place, between the amount nominally and the amount actually expended in construction; and, in the second, between the nominal value of securities and the price actually paid for them by their holders. But, allowing a wide margin for elements of uncertainty, it may be taken as fairly established that the total investment approximates to thirteen hundred millions sterling, and that of this the larger part is foreign.

In days when it is the custom for financiers to think in millions, it can scarcely be matter for surprise to find investments of enormous amount treated in a somewhat airy fashion. But, if the true significance of seven or eight hundred millions sterling be thoroughly grasped, it will be seen that a sum of this magnitude is a feature of real importance in the commercial and social history of the day. It forms an appreciable element in any exhaustive estimate of national wealth. It represents the sinews of a vast aggregate of productive enterprise, and the "hoarded selfdenial of tens of thousands of investors. Now this huge investment is made up of securities varying widely in character and quality. Some of them are sound and productive; but very many possess a modest present and a doubtful future value. During periods of so-called “inflation," the constructive impulse far out-ran the indications of demand. The cart was put before the horse, and railroads were built in advance of any real need of them, by

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