Page:The Bank of England and the State, 1905.djvu/63

 facts show that special and exceptional reasons closed our most important markets, or at least greatly impeded our exports to them. We declined to lend our money to foreign countries, and thus prevented their purchases from us; by far the greatest part of our savings were invested at home, mostly in loans to local authorities, and that in itself led to a very important increase in our imports; it stimulated the building trade, the development of electrical works and undertakings, and a great:deal of the material had to be imported, if only for the reason that our factories at home were not in a position to supply the demand. Again and again one heard in those days of large and important orders for railway material, for engines, wagons, bridges, having had to be declined, and having to be placed abroad, simply because our manufacturers required a period of two years or more before they could execute them. If anyone in those days remarked, as I confess I did myself, that our exports were not as expansive as they might be, and that a great part of the business which then went to foreign countries might as well have been supplied at home, the invariable answer was that our manufacturers were so full of orders that they did not know where to turn. This applies mainly to the iron industry, but the textile industry also shows continuous progress from 1897 till 1901, in spite of the above-mentioned adverse circumstances.

The present year so far already indicates a distinct improvement, the first eleven months showing an increase in exports of £7,000,000, and that in spite of the Money Market still being under the influence of our huge war debt, a great part of which has not been funded, but remains as a floating debt largely held by foreigners. Considering the absence of the shipments of gold from South Africa, which before the war had reached nearly 17 millions, and which even now are only about half that amount, it is only surprising that the value of money was not more affected; but even now it can, I think, be said that on the whole our investments in foreign securities are again increasing and not decreasing. The condition of South Africa, which as yet is far from satisfactory, must gradually improve.

A large amount of capital invested there is still unproductive;