326

INTERNATIONAL TRADE

to be placed in the United States; not distress borrowings, or
short-time purchases on credit, but loans of the permanent sort,
designed for long-time investment. They were first made in
large amounts in 1922. A relaxation of the movement came in
1923, the year of the Ruhr occupation; thereafter it proceeded
at accelerating pace. The figures for these four years were:
1922 $637,000,000
1923 $363,000,000
1924 $795,000,000
1925 $920.000.000

Fe

As with every export of capital, the immediate effect was a
swelling of the debit side of the account. A considerable offset
on the other side arose because some loans of earlier date, chiefly
loans which had been contracted by foreigners during the war,
were repaid. And as part of the capital movement there
must be reckoned the purchases and sales of securities in the
open market. Transactions of this kind, as it happened, were
made in both directions during the years in question. As has
already been noted, the unsettled conditions of European countries
led to the so-called “flight of capital” from various parts of the
Continent, taking the form (in good part) of the purchase of American
 securities by uneasy property owners. On the other hand,
venturesome Americans bought European securities in the expectation
 of profit from a future rise in their prices, partly for speculative
 turns, partly with a view to long-continued holding with
invigorated management. The balance of the entire capital
movement thus fluctuated from year to year; in 1923 it was even
against the United States.! Comparing this capital movement
with the interest payments, it appears that while the country had
become a receiver of interest on its loans of the war and post-war
periods, the capital sums which it was sending out exceeded the
net sums due for interest.
This new situation of the United States is a curious phenomenon,
as surprising as any in this whole train of surprising events.

1 See footnote at the bottom of next page.