The herald., 1895-09-02
FOREIGN INVESTMENTS


frequently we see estimates OF the amount
of money paid by our people to foreign
investors in the shape Of interest and
5iTTiida 5aisTTiidaesnds The statistinian after compil-
ing his table finds himself worked up to
fever heat and has 70 cool himself by a
TRADE against the American who borrows
foreign gold. The statistician always
closes his little tale OF woe by showing
how much we could save as nation by
borrowing the money at home.
In theory he has a splendid argument
and one whicn causes many persons to
open their eyes and wonder what sort of
blooming idiots we are.
However. there is another side to this
foreign interest story. True 1t would be a
very clever trick to keep all interest and
dividend money among our own people
II we could, but ono point overlooked is
that our people are borrowers, not lend
ers. We're an attempt made to close all
foreign loans and replace the loans among
our own people the great demand for
funds would cause the rate of interest to
advance to ruinous rate. The man who
has money TO loan is sometimes consider
ed as vampire bit the one who
makes such allegation loses sight Of the
fact that the borrower is In the ''vam-
pire'' business himself. The average
American with a scheme on hand is TOO
often willing to pay almost any rate of
interest In order to get the money to carry
out his plans. II the borrower did not
feel that he had an opportunity to make
. sum of money equal to the amount of
the loan with interest added and some
thing over he would not bs.in the market
to secure loan. Foreign investors as a
rule are willing to accept lower rate OF
interest than is the American. 1t is quito
natural that the borrower should want to
get his money at the lowest possible rate,
and ii he can make a saving in the
fixed charges" of his enterprise it is
quite right that he should go to England,
If necessary, for the.losn.
There is still ano ther side to this tor
sign investment story. This country has
ever been going through the developm ent
process. In the early days it was the New
England men who needed funds with
which to develop the many industries
which have since made that section
famous. Later Chicago and the north
west were active seekers in the loan mar
ket. New England had in the meantime
made sufficient money not only. to pay off
the foreign loans, but to leave a surplus
on hand which it was quite willing
to loan Chicago and the western cities.
There was time when Chicago and the
northwest were practically owned by New
England and foreign capitalists. But
there came time when the middle west
mad made enough by the use of foreign
money to be in position to go into the
loan business itself.
Later the far west and Pacific coast
came into the loan market and to large
extent is there yet. Millions OF dollars
could be profitably invested here and
such investments would not only pay the
capitalist good return, but put the bor-
rover in position to earn greater in
come, to say nothing Of the development
and Improvement OF this country.
Despite the howl of the statistician
about our providing the means of support
to lot of foreign money loaners, the fact
remains that the more foreign money
that comes to the Pacific coast and the
quicker it gets here the sooner our coun-
trv will be developed and the sooner will
we be in a position to turn the tables and
assume the role of money lenders our
selves.