Trade and the Flag 9 



colony to become bankrupt. The amount of power possessed by 

 the Colonial Office is not investigated by the ordinary investor 

 yet the sentiment of security remains. 26 A similar confidence is 

 to be found among the citizens of other advanced countries, espe- 

 cially Germany, France and the United States. Investments thus 

 tend to follow the flag and trade follows investments. Every 

 extension of purchasing power means a movement of goods in 

 some part of the world. The payment of interest or dividends, 

 or the repayment of loans means that a larger amount of goods 

 is being circulated. There are large investments in many of the 

 colonies and these investments go out in the form of railway 

 materials, telegraphic appliances, etc. Caldecott accounts for 

 England's large per capita colonial trade on the ground that 

 English capital has shown a preference for the colony and the 

 borrowing of capital determines the flow of trade. 27 



Trade also follows the citizen. Germany recognizes this fact 

 in encouraging emigration to the German settlements in southern 

 Brazil. While disclaiming any intention of conquering any of the 

 South American territory, Germany knows that the emigrant who 

 goes to join the thousands of prosperous German agriculturists 

 there will remain a purchaser of German goods longer than if he 

 settled among other nationalities. The descendants of these settlers 

 have, through generations, preserved their identity as Germans, 

 and, therefore, still show a preference for goods of German 



20 Caldecott, English Colonization and Empire, 188. 



27 Ibid., 188-189. Conant {United States in the Orient, 74) says: "The 

 development of a new country by means of railways, roads, and docks is 

 the forerunner of higher civilization, better wages, enlarged wants, and 

 increased consumption. The benefits of this larger market for goods 

 usually fall to the country which provides the capital for the primary devel- 

 opment, especially if it is that country also which, by its political control, 

 affords the guaranties of security and order." Professor Conant does not 

 give the reasoning by which he reaches the above conclusion and the writer 

 has been unable to discover any real foundation for it. Even if we agree 

 that the benefits of the larger market usually fall to the country making 

 the initial outlay, it is difficult to see where the commercial advantages 

 arising from political control come in. 



I8 5 



