328 
INTERNATIONAL TRADE 
While doing so, it will tend to have an even greater excess of exports 
than before. When this process is completed and the foreign 
investments have been absorbed, a further turn will appear; the 
=xcess of exports will cease. And if thereafter the country, waxing 
richer and richer, begins itself to lend to others, it starts on the 
original round, but from the other end, the initial export of capital 
being marked by an excess of exports. The last series of changes 
and transitions, like those preceding, one would expect to find slow 
and gradual, drawn out over a generation or two. 
The remarkable thing is that the later transitions, involving the 
shift from an established borrower’s position to the position of 
an established lender, should be compressed within less than a 
single decade. No doubt, even without the forcing process of the 
war, some growth in this general direction would have set in. 
The borrowing days for the United States were nearing their end 
by 1914. By that time there were already substantial outgoing 
loans, mainly to Canada and to Central America. It is quite 
possible, too, that even without any war the reversal of the trans- 
actions on capital account would have proceeded more rapidly 
than previous experience could foreshadow. The pace of indus- 
trial change in the United States has repeatedly exceeded all 
expectations. But with every allowance for the possibility 
that the conditions were ripe for the beginning of the new cycle, 
it is extraordinary that the country’s position in the interna- 
tional capital market should have been so abruptly and completely 
revolutionized. 
The nature of the causes at work is not indeed difficult to discern. 
On the one hand, we have the vast destruction of capital in Europe, 
especially on the Continent; and not only this, but the ensuing 
sharp curtailment of the savable funds from which new capital 
could be derived. In the United States, on the other hand, the 
war had the effect of adding to its savable funds, and perhaps in 
even greater degree to its new savings. Great windfalls and great 
fortunes resulted from the war boom; while at the same time the 
habit of accumulation extended thru all classes of society as never 
before. The propaganda for the sale of Liberty bonds of small