36 ON CAPITAL 



be a member of his company ; he may part with 

 his holding, he may sell it to some one else. 

 With the proceeds of the sale the shareholder 

 may do as he pleases : he may buy something 

 else, and that something may be abroad. Sup- 

 pose a shareholder of the British railway to 

 take these steps ; then, so far as we have 

 carried the process, though the capital of the 

 shareholder has partly gone abroad, British 

 national capital has remained untouched, for the 

 British railway is still where it was, carrying 

 on its work in the same way, having simply 

 exchanged one part-owner for another. 



Suppose now that the proceeds of the sale of 

 British railway stocks are used to purchase 

 shares of the Argentine railway. Then the 

 Argentine railway has likewise partly changed 

 owners ; but the railway itself is as before ; as 

 far as its railway is concerned, the national capital 

 of Argentina remains unaltered : a foreigner has 

 brought his own capital into the country, but the 

 total national capital of Argentina is not thereby 

 necessarily increased by one penny. 



British subjects hold enormous quantities of 

 foreign stocks and shares, and these are con- 

 stantly changing owners, the deals being mostly 

 carried out in the London Stock Exchange. 

 When a shareholder of a British railway parts 

 with his holding, he nearly always sells it to 

 a fellow-subject : when the shareholder, with the 

 proceeds, acquires a holding in a foreign railway, 

 such as a railway in Argentina, he buys that 

 holding, in ninety-nine cases out of a hundred, 



