FLOW OF DOLLARS

Hokitika Guardian, 29 August 1931, Page 6

FLOW OF DOLLARS

AMERICA’S FOREIGN - INVESTMENTS ENORMOUS INTERESTS SANI 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 a.t large. Reduced to a basis of dollars, the immediate stake of the people of the United States in world prosperity, outside the boundaries of the country, amounts to almost sixteen billion dollars that have been sent abroad uy individuals and groups, distinguished front’ 1 ' •governmental obligations, and from prospects of future trade.

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 foreign channels.

The debt moratorium proposal in turn has been followed by repeated assertions that the chief 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 sound, but super, ficial grounds. American investments in 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 mor c than a billion American dollars. There is a natural impulse on the part of any Government to protect such large interests of its citizens, hut it is equally clear that tile present American concern over international finances involves larger isues than the prospects of profit or loss for a relatively small group of individuals.

j INVESTMENTS IN CANADA

J While there lias been some, tendency toward an understanding in the United States of the way in which dollars sent to foreign countries relate to domestic prosperity there has been 1 a corresponding comprehension of the reasons which have brought about ' American investments of close to four billion dollars in. Canada. The total, 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, 290,000,000 dollars. Railways, 265,000,000 dollars. Oil distribution, 60,000.000 dollars American attention to these sums is

largely centred on the item for inn mi

1 factoring. The sum allocated to bonds ' is recognised as a- sound investment. ksOtherj. forms of outkv .obvu usly result from ]>lan to utilise resources of the ! Dominion, and the only way to do this is to take the dollars to the points where the resources lie. | There is a great force of public, opinion- in the United States, however, which contends that- articles manufactured through the use of American dollars should be manufactured in the United States. Indicative of this view.

Nellie Taylor Ross, former Governor of Wyoming and executive vice-chair-man of the Democratic National Committee, has just said: The penalty we pay for the American high tariff is to see 76 independent American factories set up on Canadian soil and 600 branch factories, all to employ Canadian labour, and in the years of development ahead to supply Canadian hoys and girls executive positions that normally would present opportunities to American youth. | SPECIAL CONDITIONS. No reoogniaion is given by persons holding such views to the possibility that Canada adopted her own tariff policy with the thought in mind that [concerns nvanufacuring for Canadian I markets would have to employ Canai dians, regardless where they got their dollars. • The figure for investments in manufacturing includes 278,000,000 dollars in the pulp and paper industry, another case of money going to the point where resources lie. Throughout the whole list of American investments abroad, however, it is apparent that the totals have been set in response to a ; special condition within a given country. Canadian policies sent many dollars to tliat country to he used in manufacturing, whereas only a relatively small amount has gon e to other countries for that purpose. The preponderance of America’s 1,511,000,000 dollars invested in Germany is for bonds, a sum of 1,255,000,000 dollars, acquired after the Dawes Plan in 1924 and signing of the Locarno Pact in 1925 renewed confidence in Germany’s internal financing. Only 90,000,000 dollars was put into manufacturing. *

Afore than half of the billion dollars in Cuba, , §74,000,000 dollars, represents America’ s.,fhare in the sugar industry, through agriculture, while there' is only a negligible sum in manufacturing. < The flow of American dollars has also taken 900,000.000 dollars to Mexico, 790 millions to Argentina. 639 millions to Great Britain. 708 millions to Chile, 542 millions to. Brazil. 484 millions to France, 416. millions to Italy, 451 millions to Japan, and 418 millions to Australia. Tn virtually all countreis except Canada the investments are overwhelmingly in bonds, or in such industries as

will provide products for tile American market, rather than for the country in which they are produced. The entire American investment in manufacturing;, outside of Canada, in fact,'is hut 80,000,000 dollars, more than the total for the Dominion, standing at 920,000,000 dollars.