In the years before World War I, global financial markets experienced rapid growth, thanks to the lack of restrictions on cross-border investment flows and the invention of the telegraph. As a result, foreign-owned assets grew from 7% of world GDP in 1870 to 18% in 1914.
British investors were especially enthusiastic about international opportunities. One asset class that they particularly liked was American railway company securities. By the summer of 1914 they owned $3bn worth of railway shares and bonds ($348bn in 2019 prices).
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