ESSAYS IN PERSUASION

PART

362

foreign investments to-day is estimated at about£4,000,000,000. This yields us an income atthe rate of about 6-| per cent. Half of this webring home and enjoy; the other half, namely,3|- per cent, we leave to accumulate abroad atcompound interest. Something of this sort hasnow been going on for about 250 years.

For I trace the beginnings of British foreigninvestment to the treasure which Drake stolefrom Spain in 1580. In that year he returnedto England bringing with him the prodigiousspoils of the Golden Hind. Queen Eliza-beth was a considerable shareholder in thesyndicate which had financed the expedition.Out of her share she paid off the whole of Eng-land’ s foreign debt, balanced her Budget, andfound herself with about £40,000 in hand.This she invested in the Levant Company—which prospered. Out of the profits of theLevant Company, the East India Company was founded; and the profits of this greatenterprise were the foundation of England’ssubsequent foreign investment. Now it hap-pens that £40,000 accumulating at 3I per centcompound interest approximately correspondsto the actual volume of England’s foreign in-vestments at various dates, and would actuallyamount to-day to the total of £4,000,000,000which I have already quoted as being whatour foreign investments now are. Thus, every£1 which Drake brought home in 1580 hasnow become £100,000. Such is the power ofcompound interest!