countries at war, have heretofore been at the rate of about $4,000,000,000 per year. Even making all allowances for the diversion of capital from manufacturing industries to war loans and the results of unparalleled economies, it is apparent that the struggle is running far ahead of the normal rate of investment in times of peace, when business is going on and profits are being made by the belligerent nations. It is this disparity between saving power and direct and indirect expenditures which has given rise to the ever-present dread of an enormous liquidation of American securities.

There seems to be a persistent tendency to minimize and underestimate the foreign holdings of American securities. I have seen no newspaper or magazine which openly expresses doubt as to the extent of these foreign holdings, support its conclusions by reference to the painstaking official and unofficial studies of this subject made by foreign governments and by financial experts in times of peace. And yet every student of finance ought to be familiar with such a study as that made by Sir George Paish for our National Monetary Commission in 1909, if not with the original sources from which he drew his information. Five years ago. Sir George, in his scholarly study "The Trade Balance of the United States," declared:

The British chancellor of the exchequer stated in the House of Commons, on December 1st, that "America, I suppose, owes us nearly £1,000,000,000 in fixed and floating capital," and in a later explanation he declared that he had reference to the British capital invested in the United States and in no way had in mind current American indebtedness which had been the subject of the discussions between Sir George Paish and the representatives of the United States treasury. We must bear in mind, moreover, that the indirect effect of English holdings of securities of corporations on the North American continent may be very profound. The general manager of the Bank of Montreal, in his address to the stockholders, at the annual meeting held on December 7, declared that British investors had, for a considerable period, been placing on the average $25,000,000 per month in Canada, Such investments had ceased with the outbreak of the war, and as he remarked.