AMERICAN MONEY

Hokitika Guardian, 20 August 1931, Page 7

AMERICAN MONEY

WHERE IT IS INVESTED. CANADA FIRST, GERMANY NEXT. SAN FRANCISCO, July 10. . Interest first stirred by the Canadian tariff and brought to a new heat by the war debt moratorium plan has made it necessary for the United States to engage in a serious appraisal of the extent of its financial concern in the well-being of the world at large. Reduced to a basis of dollars and cents, the immediate stake o'f the people of the United States in world prosperity outside the boundaries of the country, amounts to almost sixteen billion dollars. This represents American dollars that have been sent abroad by individuals and groups, as distinguished from Government - obligations. • *

This question first attracted .widespread attention because of the claim that the present American tariff law had inspired retaliatory tariffs in Canada, and that the policy of the United States as a result was forcing American dollars into fortdgn channels. The debt moratorium proposal, in turn, has been followed by repeated assertions that the i hicf interest of the United States Government lies in protecting investments of Americans abroad, and that it was necessary to save. Germany to save American dollars.

These points of view have been largely based on superficial grounds, Amencan investments ill Canada are more than twice as large as those in any other country, while those in Germany rank second. Cuba ranking third, is the only other country which has received more than a billion American dollars, There is a natural impulse on the part of any Government to protect such large interests of its citizens, but it is equally clear that the 'present American concern over intern ational finances involves larger issues than the pi’ospects of profit of loss for a relatively small group o individuals.

INVESTMENTS IN CANADA.

American investments in Canada total close bn four billion dollars, divided approximately as 'follows :Dominion, provincial, and municipal bonds, 1,890,000,000 dollars; manufacturing, 800,000,000 dollars; mining 420,000,000 dollars; utilities, 29000,000, dollars; railways, 265,000,000 dollars; oil distribution, 60,000,000 dollars American attention to thee sums is largely centred on the item for manufacturing. The sum allocated to bonds is recognised as sound investment.

There is a great 'force of public opinion which contends that articles manufactured through the use df American dollars should be manufactured in the United' States/ Thus 'one politician' Has just said: “The penalty we pay for the American high tariff is to see 76 independent American factories set np on Canadian soil and 600 branch factories, all to employ Canadian labour and in the years o'f development ahead to supply Canadian boys and girls with executive positions that normally would present opportunities to American youth.”

No recognition is -given by persons holding such views to the possibility that Canada adopted her own Tariff policy with the thought in mind that concerns aniifneturing for Canadian markets would have to employ Canadians regardless where they got their dollars.

The figure for investments in manufacturing includes 278,000,000 dollars in the pulp and paper industry ‘another ease of money go'in gto the point where resources He,

GERMAN BONDS. The preponderance of America’s 1,511,000,000 dollar investment in Germany is for bonds. A sum o'f 1,255,000,000 dollars acquired after the Dawes Plan in 1924 and the signing of the Locarno pact in 1925, renewed confidence in Germany’s internal financing. Only 90,000,000 dollars was put into manufacturing. More than half of the billion dollars in Cuba. 574,000,000 dollars represents America’s share in the sugar industry, through agriculture, while there is only a negligible sum in manufacturing. The flow o'f American dollars has also taken 909,000,000 dollars to Mexico, 790 millions to rgentina, 639 millions to Great Britain, 708 millions to Chile, 542 millions to Brazil,, 484 millions to France, 416 millions to Italy, 40l millions to Japan and 418 millions to Australia. In vi tuallv all ccuntri s except} Canada the investments are overwhelmingly in bonds, or in such industries as will provide products for the American market, rather than for the c-untry in which they are produced. The entire American investment in manufacturing outside of Canada, in fact is but 80,000,000 dollars more than the total for the Dominion a't standing at 920,000,000.