American foreign investments

Foreword

"SEES LOANS ABROAD 12 BILLIONS BY 1926 "

This headline on the financial page of the New York Times, July i, 1925, occasions little interest on the part of the "man in the street.!' He may remark — "a big figure," and turn to the sporting section.

The item, however, covers a multitude of events and thousands of separate economic transactions ; and in the end it will certainly lead to significant political results. With the latter, however, this book is not concerned, as it is obviously not a work of interpretation or prophecy. It concerns itself exclusively with breaking up into understandable units the several billion dollars representing the present investment of United States citizens beyond the seas.

With the exception of the preliminary chapters, which sketch the important changes in American * foreign financing over a period of years, the main section of this book is an attempt to classify and present in outline form some of the facts relating to American foreign investments as they stand today. It does little more than suggest answers to such questions as : "Where and in what form is American money now invested abroad?" or "What corporations and banks are involved in the foreign investment transactions?"

It is clear that only a beginning has been made in answering these questions, for, among other reasons, certain difficulties stand in the way of completeness. For example there is the difficulty of tracing industrial investments in foreign countries. John B. Osborne, writing in the North American Review, July, 191 2, mentions this and gives an example of the manner in which

* With the permission of our Latin-American friends the word "American" will be used loosely in this book as an adjective meaning "of the United States."

v vi FOREWORD

ownership may be concealed and only accidentally made public: "The American ownership of the Sollstedt potash mine in Germany became known generally only when the validity of the American contract became a diplomatic question." x And Rufus S. Tucker, writing on our Canadian investments, comments on the same difficulty in tracing ownership titles in that country. Corporations may be organized under Canadian laws but with American capital and stockholders. Again, the American-owned property may be administered by local agents, or the bonds of the companies sold through American banks may have been bought in Canada.2 Consider also the number of British companies in which American capital is invested without any record appearing on either side of the Atlantic. It is quite possible for an American bank or corporation to send large instalments of capital abroad periodically until it has quietly taken over a British company without any public notice.

One should not forget also, in this connection, the number of companies formerly incorporated in the United States which may have transferred their registry to, say, Mexico or Chile in order to take advantage of the more favorable conditions granted by these governments to companies locally incorporated. After registering in the foreign country the company may operate thereafter under a foreign name and the size of its investment may be known only to itself and not even to the local government under which it has incorporated. Many companies, formerly operating in the border states, have transferred their registry to Mexico and are now under no obligation to report on their capital investment to any political administration on either side of the border.

Secondly, there is the difficulty of tracing bankers' loans. Total figures on the credits and short term loans extended by American banks to foreign corporations are usually guess-work. Credits may be extended to foreign corporations and sometimes even to governments without any notice appearing in the public prints. These private loans may be renewed again and again until possibly the public offering of a security, refunding the

2 U. S. Commerce Reports, Nov. 3, 1924, pp. 278-80.

FOREWORD vii

obligation, may bring it to light. To follow these short term loans would require one's presence on the inside of every large banking house in America, for the extent of such lending abroad is known only to the bankers themselves.

It is clear that many of the difficulties mentioned could be overcome by an official survey such as the Department of Commerce might undertake — a thoroughgoing study of American companies and their relations to the various outlets for our capital abroad. Certainly hundreds of corporations which have escaped the eye of this very limited investigation could be turned up by a government body empowered to "questionnaire" and subpoena the persons and corporations involved. However, until such a survey is undertaken, this volume may prove of value to those who for one reason or another are interested in tracing the American dollar to its place of investment abroad.

The writer has consulted certain manuscript material chiefly in the files of the United States Department of Commerce to which only occasional reference is made in the footnotes. However, he must mention particularly the revised manuscript of Investments in Latin America and the British West Indies, by Frederic M. Halsey, placed at his disposal by Mr. Halsey and Mr. Grosvernor M. Jones, Chief of the Bureau of Foreign and Domestic Commerce. Since the manuscript was consulted the Department has decided to issue it as a series of separate information bulletins beginning with one on Argentina. Hence no page references to the manuscript have been possible. Margaret Alexander Marsh has assisted greatly in the section devoted to Mexico, and Mr. Robert Menapace has given advice in the preparation of the table on page 20. Material on American interests in Central American countries prepared by W. Jett Lauck has been used in the sections dealing with those countries.

To Scott Nearing the writer is specially indebted for first suggesting the need for a study of this kind and for criticism and suggestion at every stage of the work. An appropriation by the American Fund for Public Service, Inc., made the work possible and a committee of consultants appointed by the Fund made helpful suggestions after reading the initial report which formed the viii FOREWORD

basis of the present study. This committee included Thomas S. Adams, Harry Elmer Barnes, Roger N. Baldwin, Charles A. Beard, Raymond L. Buell, Edward Mead Earle, Morris L. Ernst, Lewis S. Gannett and James Weldon Johnson.

Miss Natalie Brown has been painstaking in preparing the bibliography, and Miss Marion Shields and her staff have given care in the typing and copying. The members of the staff of the Economics Division of the New York Public Library have been most generous with their help in many ways.

The substantial appendices collected and edited by Mr. Adrian Richt contain, for the careful reader, some valuable exhibits in American economic penetration abroad. They take one, as it were, behind the scenes of the tables on page 20 and show one some of the forces and incentives operating in the minds of the bankers and concessionaires who have dealt with our Latin- American neighbors during the past decade or so. To a number of unnamed friends in the banking world we are grateful for copies of these contracts and concessions, complete copies of which are now on file, in translation, at the office of the American Fund for Public Service, Inc., New York City. Students of the growing American Empire today — and a hundred years hence — may find them illuminating.

R. W. D.

New York, November 1, 1925.

Table Of Contents

PAGE

Foreword v

I. When the United States Was a Debtor Nation i

Index

I. Tables and Lists 413

II. Countries and Geographical Areas .»»..... 414

III. Corporations and Persons 415

I

WHEN THE UNITED STATES WAS A DEBTOR NATION

Only in comparatively recent years has the United States become a great creditor nation. Within less than a decade, she has become an outstanding investor in the external loans and internal loans of almost every foreign nation.

As a new and developing country, the United States needed and borrowed money from abroad to finance its industrial and governmental operations. A survey of American history during the nineteenth century shows that the United States was a debtor nation during the whole of that century, when foreign governments as well as foreign peoples were lending us money.

In 1843 a committee of the House of Representatives made a report in which it was estimated that the amount of state and city debt held outside of the United States was $150 million, practically all of which had been borrowed before 1839. Some $125 million of this amount had been invested in the United States during the period 1821 to 1837.1

In spite of the panic of 1837 which scared off European investors for several years, the value of American securities held by foreigners in 1854 was estimated by the Secretary of the Treasury at $222 million.2 By i860 the amount had risen to approximately $400 million, from which high point it declined as railroad and other securities held abroad were returned for sale in substantial amounts during the Civil War.

When the panic of 1873 broke, the total of American securities held in Europe had increased to $1,500 million, but it sank again as a result of the ensuing depression. With the developing railway boom and the period of rapid industrial

1 Review of Economic Statistics, v. 1, pp. 217-218. 8 Ibid., p. 220.

expansion, the amount increased to some two billion dollars in 1880. Of this amount $1,535 million was invested in American railway securities.3 The heavy import of capital during this period, it is estimated, raised the total of all American securities held abroad in 1890 to about three billion dollars. Subsequent withdrawals during the years following the 1893 panic reduced it to $2,200 million.

According to N. T. Bacon 4 approximately $3,300 million of European capital was invested here, chiefly in railroads, on January 1, 1899. On the same date America's entire investment in the obligations of other governments and foreign corporations did not amount to more than $500 million — $150 million of which was in Canada, $185 million in Mexico, $50 million in Cuba, $10 million in Europe, $55 million in other Latin American countries, $5 million in China and Japan and $45 million in life insurance company guarantee investments in Russia and elsewhere. This left the United States in debt to the outside world to the tune of about $2,800 million.

In the period between the spring of 1904 and the autumn of the year following, some $535 million of Japanese loans was floated in the American and European markets. In March 1907 when $115 million of this was refunded half of the amount was carried by American financial houses.5

A summary of our foreign investment developments from then on is given by H. E. Fisk :

"Nine years later (1909) United States investments abroad are estimated to have reached a total of $2,000,000,000. Canada was then a debtor to the United States in the sum of $500,000,000 and Mexico for from $600,000,000 to $700,000,000 while our investments in Europe had reached the relatively high total of $350,000,000." 8

"By the close of 1913 we had invested outside of our own borders around, perhaps over, $2,500,000,000. This figure is higher than the accepted estimates, but we believe it to be a close approximation to the facts." 7

SU. S. National Monetary Commission, Publications, v. 20, p. 173. * Yale Review, v. 9, pp. 265-285. 6 Annalist, v. 16, p. 452. •Fisk, Inter-Ally Debts, p. 306. 1 Idem.

WHEN THE UNITED STATES WAS A DEBTOR NATION 3

The distribution of these foreign investments at the close of 19 1 3 according to the same authority is as follows: 8

(In

millions.)

$ 750

Cuba

1,050

Central America

South America

China and Japan

Philippine Islands

Granting that this estimate is not too liberal, and it is far higher than that given by other authorities, we still find the United States at the outbreak of the war a debtor to the world, for according to D. R. Crissinger, Comptroller of the Currency, foreign investors in 1914 owned from four to five billion dollars of American securities.9 This left us still in debt to foreign countries by at least $2,500 million to $3,000 million.

Thus we see the correctness of the statement by Bullock and his associates in their careful study, that "for the whole period 1 896-1914 the net flow of capital investment was decidedly into the United States." 10

9 Economic World, n. s. v. 24, p. 413.

10 Review of Economic Statistics, v. 1, p. 230.

II

A. The War Demand for Gold and Capital.

The war emergency turned the investment tide, directing British, French, Belgian and German surplus to the battlefields instead of to undeveloped foreign countries, and stimulating a demand for American goods and particularly for American credit which in the years between 191 5 and 1920 placed every important country of Europe in the debt of the United States, besides providing the surplus with which American business interests were able to make large investments in Latin America, Canada and elsewhere.

With the war, American securities held abroad were returned in a steady stream. It has been estimated that between 191 4 and 1 919 the value of returned securities was about $2,000 million. In other words two billion dollars' worth of American railway, government, municipal, corporate and other stocks and bonds held in Europe were now purchased by Americans.1 D. R. Crissinger places the figure even higher. He says: "Since the beginning of the war we have bought back by far the greater part of those securities — probably two-thirds of them," 2 in other words about $3 billion worth.

The war stimulated also an extraordinary export of new capital chiefly in the form of the so-called war loans. One estimate is that from August 1, 1914, to January 1, 1917, or even before America entered the war — approximately $2,325 million in foreign loans was floated in the United States, $1,900 million of this consisting of loans to the allied nations.3

1 Review of Economic Statistics, v. 1, p. 246.

2 Economic World, n. s. v. 24, p. 413. 8 Journal of Commerce, Jan. 2, 1917.

Not counting the $2 billion, and possibly more, of American securities returned and sold here, the actual export of capital during the war period is set down by Bullock and his associates at $8,839,600,000, distributed as follows : 4

Private Loans floated in United States $1,520,100,000

Direct Loans of United States Government to European Governments 7,319,500,000

Accordingly, in 19 19, this sum of nearly $9 billion constituted "the new lending of American capital to the outside world. The export of this vast sum, in four years and a half of war, places the United States second only to Great Britain in volume of foreign investment." 5

In 1919 alone, the first year after the war, $3,369 million of capital and credit were exported, $3,362 million of which consisted of loans made by the United States Government. These loans of our government to foreign governments were the prevailing form of capital export during the war and the years immediately following.

B. Export of Private Capital.

The total foreign government, state, municipal and corporate (railroads, public utility and industrial) loans outstanding in the United States on June 1, 1921, according to the figures of the Guaranty Trust Company of New York, amounted to $2,396,- 862,083. 6 This figure does not include foreign internal bonds and stocks or sterling or franc issues of foreign countries held in the United States on that date (see page 44). Nor does it embrace complete figures on issues sold partly in this country and partly in other countries.

This obligation of nearly two and one half billion dollars was distributed among some twenty-six different countries and ranged in amount from a public utility investment in Australia of

* Review of Economic Statistics, v. 1, p. 248.

5 Idem.

6 U. S. Federal Reserve Bulletin, v. 7, p. 942.

$1,250,000 to the $696,681,790 worth of securities of Canada (including Newfoundland) then outstanding in the American market and held by citizens of the United States.7

During the five years following the war (see table below) the peak period for the issuance of this form of obligation was reached in 1922. The Department of Commerce says: "A truly phenomenal activity prevailed during the first half of 1922 in issues for foreign Governments and for foreign industrial enterprises. To a greater extent than ever before it appeared that the American investor was interesting himself in financing oversea developments.'' 8 The year 1923, on the other hand, shows a considerable decrease in the amounts issued, which is attributed by Grosvenor M. Jones, Chief of the Finance Division of the Bureau of Foreign and Domestic Commerce, to unsettled European conditions, the unusual number of issues of domestic bonds in 1923, the fact that the funds of small investors had been largely absorbed by the extraordinary purchases of foreign bonds in 1921 and 1922, and the reduction in yield of the bonds issued in 1923. 9

The figures in the following table represent both new capital and refunded loans, the latter constituting in some years as much as one- fourth of the total : 10

Securities issued by Foreign Countries and U. S. Possessions in

the American Market, 1919-1923, including Government,

State and Municipal as well as Corporate Loans.

(In thousands.'

U. s.

Government

Possessions

Corporate

'19

$564,559

$11,700

$105,448

$681,707

'20

376,609

16,277

228,625

621,512

'21

478,305

27,145

169,867

675,317

'22

50,373

220,077

897,208

'23

291,908

8,186

98,123

398,217

7 Idem.

8U. S. Commerce Year Book, 1922, p. 434.

9 Bankers Magazine, v. 107, pp. 10-11.

10 U. S. Federal Reserve Bulletin, v. 10, p. 93.

C. Record Foreign Borrowing in 1924.

The year 1924 established a new record in foreign financing. According to the United States Department of Commerce foreign capital flotations publicly offered here during 1924 amounted to $1,209,786,484. Of this amount $332,268,000 was for refunding purposes, the balance, $877,518,484, constituting nominal new capital subscribed to publicly-offered foreign loans both governmental and corporate.11

When it is remembered that the total nominal foreign capital flotations during the previous year, 1923, amounted to only $538,315,500 it will be seen that the year 1924 witnessed a more than 100 per cent increase in capital subscribed for foreign dollar securities. It should be noted that the Department of Commerce figure for 1923 is much higher than that given in the table above from the Federal Reserve Bulletin. This is explained by the fact that capital flotations of American corporations with major interests abroad are not included in the Federal Reserve tabulations.

The bulk of this money was loaned by Americans to foreign governments, states and municipalities or to corporations backed by government agencies, "for of the $878,000,000 of new loans floated $775,000,000, or 88 per cent, were Governmentguaranteed, whereas in 1923 the corresponding percentage was only slightly over 60 per cent . . . but there were other important investments in foreign industrial enterprises not represented in the list of bonds publicly offered." 12

The largest loans of the year were the Japanese loan of $125 million, the Dawes Plan loan to Germany of $110 million, the $100 million exchange stabilization loan to France, $90 million to the Canadian Government, $50 million to Belgium and $40 million to the Netherlands.13

The distribution of the publicly-offered loans listed by the

11 U. S. Trade Information Bulletin, no. 340, p. 20. "Ibid., p. 14. 13 Ibid., p. 16.

Department of Commerce for 1924 is represented in the following table :14

Government

and Municipal Corporate

These figures as we have noted do not include the unusual mass of short term credits, bankers' loans to foreign industries, and direct industrial investments made in foreign territory by American capital during the year (see below, page 13). Exclusive of this class of credits, to be discussed later, the 1924 record of foreign capital flotations as presented by the Department of Commerce is as follows : 15

FOREIGN CAPITAL FLOTATIONS PUBLICLY OFFERED IN THE UNITED STATES DURING 1924

Foreign Governments, Provinces, and Municipalities

(Including corporate issues guaranteed by governmental agencies.)

Total Securities Nominal Interest Due

Capital Europe:

Lower Austrian Hydro Electric Power

Co. (guaranteed by Province of Lower

Czechoslovak Republic 9,250,000 8 1925

Carlsbad, Czechoslovakia 1,500,000 8 1954

Industrial Mortgage Bank of Finland,

Finnish guaranteed (municipal loan) . . . 7,000,000 6.5 1954

Paris-Orleans Railway Co 10,000,000 7 1954

Paris-Lyons-Mediterranean Railway Co. 2,200,000 . .

French National Mail Steamship Line .. 10,000,000 7 1949

German Government 1 10,000,000 7 1940

Greek Government 1 1,000,000 7 1964

Kingdom of Hungary 7,500.000 7.5 1944

15 Idem.

FOREIGN CAPITAL FLOTATIONS PUBLICLY OFFERED IN THE UNITED STATES DURING 1924— continued

Foreign Governments, Provinces, and Municipalities (continued)

Securities Nominal Interest Due

Capital Europe (continued) :

Kingdom of the Netherlands 40,000,000 6 1954

City of Rotterdam 6,000,000 6 1964

Kingdom of Norway 25,000,000 6 1944

City of Christiania 2,000,000 6 1954

Christiania tramways (guaranteed by the

Kingdom of the Serbs, Croats, and

Swedish Government 30,000,000 5.5 1954

Government of Switzerland 30,000,000 5.5 1946

Government of the Argentine $40,000,000 6 1957

City of Buenos Aires 8,490,000 6.5 1955

Province of Buenos Aires 2,000,000 5.5 Apr. 1925

Republic of Bolivia 2,000,000 8 1947

City of Bogota (Colombia) 6,000,000 8 1945

Municipality of Medellin (Colombia) .. 3,000,000 8 1948

Dominican Republic 2,500,000 5.5 Sept. 1926

Government of Mexico x . . ....

Republic of Peru 7,000,000 8 1944

Dominion of Canada 90,000,000 4 1925

Canadian National Railways 20,000,000 4 July 1927

Province of Alberta 2,500,000 5 1939

City of Calgary, Alberta 697,000 5.5 1954 io AMERICAN FOREIGN INVESTMENTS

FOREIGN CAPITAL FLOTATIONS PUBLICLY OFFERED IN THE UNITED STATES DURING 1924— continued

Foreign Governments, Provinces, and Municipalities (continued)

Total Securities Nominal Interest Due

Capital Canada and Newfoundland (continued) :

Province of British Columbia 2,000,000 5 1949

City of Prince Rupert, British Columbia 155,000 6 1926-1929

City of Burnaby, British Columbia 250,000 5.5 1929

City of Victoria 665,000 5 ....

Province of Manitoba 2,600,000 5 1944

Greater Winnipeg water district 2,060,000 5 1929

Province of New Brunswick 800,000 5 1934

Province of Nova Scotia $1,500,000 5 1934

Province of Ontario 5,000,000 3 4.5 1944

City of Toronto (harbor commissioners) 3,000,000 2 4.5 1953

Montreal Metropolitan Commission 2,612,000 2 5 1951

Government of Newfoundland 3,500,000 5.5 1944

Asia:

Industrial Bank of Japan 22,000,000 6 1927

Philippine Government 1,500,000 4.5 1952

Total Governments, Provinces and

Municipalities 1,059,887,984 ii

FOREIGN CAPITAL FLOTATIONS PUBLICLY OFFERED IN THE UNITED STATES DURING 1924— continued

Corporate

Total Securities Nominal Interest Due

Capital Europe:

International Power and Securities Co.

(Union d'Electricite of Paris) 4,000,000 6.5 1954

International Match Corporation 15,750,000 .. ....

Andes Copper Co. (Chile) , amount paid up 10,000,000

Antilla Sugar Co. (Cuba) 6,000,000

Cespedes Sugar Co. (Cuba) 3,000,000

Cuban Dominican Sugar Co 15,000,000

Sugar Estates of Oriente (Inc.) 2,000,000

Ferrer Sugar Co. of Cuba 1,500,000

Cuban Northern Railways 4,500,000

International Railways of Central America-Guatemala 1,000,000

Venezuelan Petroleum Corporation 1,202,500

Montreal Tramways and Power (Ltd.) 8,000,000 2

Asbestos Mines (Ltd.) 1,000,000

Wood and English (Ltd.) British Columbia 1,000,000

St. Regis Paper Co. of Canada 1,500,000

Duke Price Power Co 12,000,000

Canadian Pacific Railway 10,000,000

Winnipeg Electric Railway 6,000,000 2

St. Maurice Paper Co 2,600,000

Cosmos Imperial Mills 1,000,000 2

King Edward Hotel Co 1,000,000

Montreal Tramways Co 3,266,000

7-5

7-5

7-5 8

7-5 6

6.5

1925-1932

6-5

1929-1934

....

5.5

6-5

....

FOREIGN CAPITAL FLOTATIONS PUBLICLY OFFERED IN THE UNITED STATES DURING 1924— continued

Corporate (continued)

Total Securities * Nominal Interest Due

Capital Asia:

Great Consolidated Electric Power Co.

Manila Electric Railway Co 500,000 7 1942

Total Corporate 149,898,500

1 A $50 million Mexican Government loan was offered by a Texas banker, October, 1924. The Government has officially announced that the loan contract with this banker has been cancelled because he failed to secure the amounts called for within the time limit.

2 Partly sold in Canada. It is added to the total in order to partly offset old domestic issues that were sold in the United States in 1924 (such as two City of Toronto loans).

3 Represents estimated amount of $20 million issue sold in United States.

4 Represents portion of $150 million loan sold in the United States; remainder, or $25 million, was disposed of in the Netherlands.

5 Preferred stock.

Additional short-term loans to foreign governments, states and municipalities during 1924, are given by Moody.16 The following table covers this class of loans to foreign governments and cities, other than Canadian. Most of these were handled privately by American banking houses.

Berlin, 1 year note 7s $ 3,000,000

Cologne, 1 year note 7s 2,000,000

French Credit National 6s of 1922 8,500,000

Nicaragua (coffee crop financing) 2,000,000

Salvador, 7s ( Series C) 250,000

10 Moody's Governments and Municipals, 1925, p. xx.

Then we have a much longer list of similar loans made by American bankers to foreign corporations which are not included in the Department of Commerce tables. These include some stocks and bonds of American corporations whose business is partly conducted abroad, bankers' short term credits and other privately placed securities. A wide diversity of foreign corporations and native companies operating abroad is represented in the following list.17

Additional Corporate Foreign Flotations 1924:

American Maracaibo Co. (Venezuela) $50,000,000

American Engineering and Automotive Products Corporation of France (stock) 500,000

American and Continental Corporation 10,000,000

Austrian Credit Institute 500,000

Atlantic Refining Co. of Italy 100,000

Badische Anilin Loan 1,000,000

Bavarian Mortgage and Exchange Bank 8s, 1974 240,000

Bavarian Mortgage Credit Institute 8s, 1984 6,300,000

Botany Consolidated Mills (Germany) 1,920,000

Cuba Telephone 7% preferred ( stock) 4,000,000

Czechoslovak Textile Industry Loan 6,000,000

Diesel Gas Engine Works of Cologne (stock) 225,000

Deutsche Bank (stock) 10,000,000

Equitable Acceptance Corporation (stock) 1,000,000

Finland Export Credit 6.000,000

Ford Motor Co. of Sweden (stock) 268,000

Ford Motor Co. of Holland (stock) 400,000

Ford Motor Co. of Australia (stock) 5.000,000

German Dye Trust Loan * 2,500,000

German Railways 7s 10,000,000

German Potash Loan , » . . . 6,000,000

German Sugar Loan 7-7 3^s ' 4,000,000

Gelsenkirchen Mining Loan , 2,500,000

International Power 63/2S, 1954 4,000,000

International Match, preferred stock (to refund bonds) .... 15,750,000

International Tel. and Tel. (Spain) 2,000,000

Lago Petroleum ( stock) 5,300,000

Lower Austrian Discount Bank (stock) 400,000

Montecatini Co. (stock) (Italy) 250,000

Midi Railway Loan (France) 3,000,000

North German Lloyd Loan . '. 1,500,000

17 Ibid., pp. xxi-xxii.

Additional Corporate Foreign Flotations 1924 (continued) :

National City Bank (France) 1,500,000

Patino Mines Enterprise Cons 30,000,000

Pantepec Petroleum ( stock) 3,000,000

Paris-Lyons-Mediterranean Railway 534s, 1925 2,200,000

Pine Products Co. (stock) 500,000

Peru (purchase of Nitrate Lands) 3,500,000

Rhine-Main-Danube 8s 2,500,000

Ruhr Coal Syndicate Credit 2,500,000

Rhenish-Westphalian Syndicate Credit Co. "Jug" 5,000,000

Tidewater Lumber Co. (stock) . . 600,000

Serbo-American Iron Foundry and Match Co. "Jug" 50,000

United Coffee Mills and Warehouse Co. of Guatemala. ...... 300,000

U. S. and Foreign Corporation 6% preferred stock 25,000,000

U. S. and Foreign Corporation 6% second preferred stock. . . 5,000,000

Verde Estate, Ltd 350,000

Venezuela Gul f Oil 50,000

* Another loan not mentioned here was the German Gold Rediscount Bank Loan for $25 million.

The addition of these various short time credits, bankers' loans, corporation stocks and other forms of temporary investment brings the Moody total for all foreign corporation flotations, exclusive of Canadian, up to $463,110,000.

The Moody figure for all foreign financing in 1924 thus runs higher than that of the Department of Commerce because of the larger number of short term and private investment units included, particularly in the corporate field.

The totals arrived at after these additions are as follows :18

Foreign Capital Flotations in the United States 1924 :

Foreign Gov'ts Foreign Corpora- Canadian Gov't U.S. Posses-

and Municipals tions including and Municipals sions

Canadian

making a grand total of $1,633,081,000 for the year instead of the $1,209,786,484 figure reached by the Department of Commerce tabulators with a less inclusive list of flotations.

18 Ibid., p. xviii,

The Foreign Securities Investor 19 presents in tabular form the 1924 foreign financing using approximately the Moody figure. As totalled, the seven tables follow :

1. Bond and Note Issues of Governments $ 882,331,000

2. Loans and Credits to Foreign States and Cities (ex-

clusive of Canada) 47,990,000

3. Loans and Credits, except Stock Issues, of For-

eign Corporations 353,295,000

4. Stock Issues of Foreign Corporations 145,390,000

5. Canadian Provincial and City Offerings 63,077,382

6. Securities of Canadian Corporations 137,814,000

7. Loans to United States Possessions 5,192,000

19 Foreign Securities Investor, Jan. 7, 1925, pp. 4~7«

Ill

UNITED STATES GOVERNMENT LOANS TO FOREIGN

GOVERNMENTS

The largest single unit in the total export of United States capital consists of governmental loans to foreign governments during the war and later during the "reconstruction" period. This tremendous item is now referred to as "Our Twelve Billion Dollars" and is familiar to Americans under that title.

These obligations owing the United States Government by the European and other foreign governments are made up of the following elements :

a. The war credits advanced by the United States to foreign governments.

b. The obligations assumed by foreign governments which bought materials from the United States after the cessation of hostilities.

c. Interest accrued on these obligations.

Under date of May 16, 1925, the United States Treasury put the totals of these obligations at over $12 billion. The table showing the wide distribution of these loans follows :

Statement showing Principal Amount of Obligations of Foreign Governments held by the United States Treasury, Interest Accrued and Unpaid thereon up to and including the last Interest Period prior to May 16, 1924; and Payments heretofore made on Account of Principal and Interest :

Principal Amount Total Indebted- Payments on Payments on

Country of Obligations ness {with Account of Account of

Now Held Accrued Principal Interest Interest)

U. S. GOVERNMENT LOANS TO FOREIGN GOVERNMENTS 17 Foreign Government Obligations held by the U. S. Treasury (continued) :

Jugoslavia . .