shares or stock, though in some
cases, such as bank and insurance shares, there is a further reserve
liability which is left for the protection of the companies' customers.

In the eighteenth century a great outburst of gambling in the East
Indian and South Sea companies, and a horde of less notorious concerns
was a short-lived episode which must have helped for a very long time to
strengthen the natural prejudice that investors feel in favour of
putting their money into enterprise at home; and it was still further
strengthened by the disastrous results of another great plague of bad
foreign securities that smote London just after the war that ended at
Waterloo. This prejudice survived up to within living memory, and I have
heard myself old-fashioned stockbrokers maintain that, after all, there
was no investment like Home Rails, because investors could always go and
look at their property, which could not run away. Gradually, however,
the habit of foreign investment grew, under the influence of the higher
rates of interest and profit offered by new countries, the greater
political stability that was developed in them, and political
apprehensions at home. In fact it grew so fast and so lustily that there
came a time, not many years ago, when investments at home were under a
cloud, and many clients, when asking their brokers where and how to
place their savings, stipulated that they must be put somewhere abroad.

This was at a time when Mr. Lloyd George's financial measures were
arousing resentment and fear among the investing classes, and when
preachers of the Tariff Reform creed were laying so much stress on our
"dying industries" that they were frightening those who trusted them
into the belief that the sun was setting on our industrial greatness.
The effect of this belief was to bring down the prices of home
securities, and to raise those of other countries, as investors changed
from the former into the latter.

So the theory that we were industrially and financially doomed got
another argument from its own effects, and its missionaries were able to
point to the fall in Consols and the relative steadiness of foreign and
colonial securities which their own preaching had brought about, as
fresh evidence of its truth. At the same time fear of Socialistic
legislation at home had the humorous result of making British investors
fear to touch Consols, but rush eagerly to buy the securities of
Colonial Governments which had