Explores the nature, scale, and direction of the massive flows of international capital to and from Europe in the inter‐war period. The authors present new data on the movements of international capital as measured by balance of payments statistics for each of the main lenders and borrowers in all parts of the world. These global estimates for all creditors and all debtors ought, in principle, to agree, but there was a substantial discrepancy between them, particularly in the 1930s. The authors suggest that one major explanation for this is the enormous flight of capital from Europe, evading exchange controls and other restrictions on the free movement of funds. On the basis of these new estimates, they discuss the reasons for, and effects of, the huge movements of long‐term and short‐term capital.