Why Gold Goes Abroad

One of the reasons why gold goes abroad when we have a balance of trade in our favor seems to be generally overlooked . For manyyears prior to 1890, English capital carne here in large quantities for investrnent in railroad and other enterprises. Siuce that time, partly owing to the fact that the railroad field has been filled and partly to the fact that the decline of prices under a gold standard has made investment unprofitable, this stream of capital has stopped. When it stopped we noticed what we failed to notice before - that we were sending a large siira abroad annually in payment of interest and dividends upon foreign investments.