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Empire and Social Reform: British Overseas Investment and Domestic Politics, 1908–1914

Published online by Cambridge University Press:  11 February 2009

Avner Offer
Avner Offer
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University of York
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Extract

Two central developments in the economic history of Edwardian Britain are rarely considered in conjunction. Large flows of investment overseas between c. 1905 and 1914 have been regarded as a feature of ‘high imperialism’, or more innocuously, as a phase in the growth of an international economy. In domestic politics, the ‘New Liberal’ achievement of tax and welfare reforms has been viewed as a stage on the road to the ‘welfare state’, and as a bid for political survival. Was there any link between the export of capital and domestic politics? This article will describe how capital flows affected the choice, timing and scope of Liberal social and economic policies.

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Articles
Information
The Historical Journal , Volume 26 , Issue 1 , March 1983 , pp. 119 - 138
Copyright
Copyright © Cambridge University Press 1983

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References

1 Research was supported by a grant from the social science research council. I am grateful to Professor F. W. Paish for permission to quote from his father's unpublished memoirs and to the members of seminars at Cambridge, London, Oxford and Southampton for valuable comments.

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38 ‘A disquieting outlook’, BM (May, 1910), 663–8.

39 Paish, ‘Memoirs’, fo. 4.

40 See especially P.R.O. Treasury (T.) 171/20, 30, 43, 53, 67, 92; T. 172/117 and Asquith papers 24, fo. 124 ff.

41 The most rounded account is Sir George Paish, ‘The export of capital and the cost of living’, Statist supplement, 14 Feb. 1914.

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51 Precision would be misleading, but the main components of the national stock in 1913 may be estimated as follows: Reproducible capital stock (dwellings, other buildings, plant and machinery) - £8,500 million; furniture and durable goods (incl. books; at ten times annual expenditure) - £1,000 million; land-£1,300 million; overseas assets - £4,180 millions. All quantities except land taken from Feinstein, C. H., National income, expenditure and output of the United Kingdom (Cambridge, 1972),Google Scholar tables 24, 46, 50. George Paish estimated the ratio between home and foreign assets to be some 35:1 in 1914, with £4,000 millions invested abroad ([G. Paish], “The financial strength of Great Britain’, n.d. 1914, T. 171/92); Platt, D. C. M., ‘British portfolio investment overseas before 1870: some doubts’, Econ. Hist. Rev., xxxiii (1980), 14–16, would place the level of overseas assets much lower.Google Scholar

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59 Blumenfeld, R. D., R.D.B.'s diary 1887–1914 (London, 1930), 4 Feb. 1908, pp. 207–8;Google ScholarReitlinger, G., The economics of taste (3 vols., London 1961–70), 1, 167–9.Google Scholar

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61 Board of Inland Revenue, ‘General capital levy’, 19 May 1919, I.R. 63/86, fo. 276.

62 The same as municipal securities, but somewhat more than railway debentures. See A. W. Flux, ‘The yield of high-class investments’, Transactions of the Manchester Statistical Society (Feb. 1911), esp. p. 120; Stockbroker, ‘Depreciation’, pp. 228–30.

63 ‘Antibilious stock’ - J. Nasmyth, engineer: an autobiography, ed. S., Smiles (London, 1912 edn), P. 359.Google Scholar

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69 See BM and financial press in general, 1906–12, passim; Sir George Hervey (Comptroller national debt office) to Asquith, 2 Dec. 1907, P.R.O. N.D.O. 15/7, fo. 5; ‘Sir E. Holden on fall of consols’, Statist, 27 Jan. 1912; The Times, 5 Feb. 1912, 6e.

70 From a vast literature see, e.g. Sir Schuster, F., ‘Our gold reserves’, Journal of the Institute of Bankers, xxviii (Jan. 1907); T. 168/97; ‘Gold reserves - a plea for enlarging our gold base’, BM (Apr. 1908).Google Scholar

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72 This is the gist of the advice given by Sir G. Paish and B. P. Blackett in the spring of 1914, T. 171/53. See also J. M. Keynes to Blackett, 24june 1914, in Keynes, Collected writings, xvi, 5–6.

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84 T. 1/11391/3909; M. Nathan, ‘The avoidance of income tax by accumulation of interest abroad’, 19 Mar. 1912, I.R. 63/47, fos- 410–16ff.

85 Sir Felix Schuster to Asquith, 9 Dec. 1913, T. 171/61; Paish to Lloyd George, 21 Apr. 1914, T. 171/67. Paish had already urged this point two years earlier in his memo, of 19 July 1912, T. 171/20, p. 12.

86 Seel.R. 63/47, fos. 253–419; T. 171/61 (Inland Revenue memo., 31 Jan. 1914);T. 172/124 and T. 1/11654/15268 (overseas protests).

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