The Birmingham age-herald., 1913-08-21
English Expert Estimates
Last Years Savings at
Five Billions
WILL SOON BECOME
NATION OF LENDERS
America Now Owes Five Billions
Abroad But Could Soon Pay 1t
Off With Proper Care
of Finances
BY HOLLAND

BY HOLLAND
New York, August 20-{Speeial. lit
often happens that American men of large
affairs return from summer excursions TO
Europe with broader understanding of
what the United States as a whole is do
ing and with a clearer vista of the fu-
ture than they possessed when they de-
parted for Europe. They are brought into
contact with men of large affairs. espe-
cially in London, who look upon it as IN
evitable, if they are to be successful. that
they keep watchful eye upon conditions
that prevail the world over
1t has been noticed that the men of
finance of the Atlantic coast have in re-
cent years extended their vista so that
It covers the entire country, and among
these men of affairs are some very broad
minded business statesmen.
No one could talk with Theodore n.
Vail, for instance, for an hour without
getting new point of view respecting the
inconceivably great resources yet unde-
veloped which are awaiting only capital
and energy so that they may be converted
into new wealth. Mr.. Vail is convinced
that this country has really only begun TO
seize the opportunities for material ad-
vancement which are to be found every
where. When James Stllman returns
from Europe he speaks earnestly even en-
Enthusiastically, of the comprehension which
the great men of affairs in London and
many of those in Paris have of the growth
in the near future.
This is view which is taken by Sir
George Paish in a recent issue of the
London Statist which is devoted to con-
sderation of American railway affairs
Sir George asserts that the magnitude OF
the American harvests In 1912 and the rel
atively great magnitude of the exporta-
tions of these harvests made 1t possible
for the United States greatly to decrease
its demands for outside capital. In other
words these crops and the marketing of
so much of them as was done last year in
other countries than our own created sup
plies of a new wealth in such amounts
that the United States found 1t unneces-
sary to ask for as much foreign capital as
we have done in recent years. We did, il
is true, find a market across the sea for
some of our securities but they were for
the most part obligations which had only
a short time to run. Sir George says
that on balance the American people for
the year 1912 borrowed nothing. This must
mean that the European capital, including
that of Great Britain, now invested in the
securities of the United States in amount
as estimated by Sir George of So, 900, 900, 900,
was not increased in the year 1872 1t cer-
tainly is not likely to be increased in the
year 1918. We may. therefore, be able
gradually to reduce this Indebtedness.
The Agricultural Exports
Some of those who have read the admir-
able review of the American position
which appeared a few days ago in the
London Statist speak with some astonsh-
ment of the fact that apparently this re-
view has overlooked not merely the magni-
tude In money vale of our expectations of
commodities. especially
steel and iron products, but also seems not
to know that the increase in this exporta-
tion within the past four or five years is
accounted as a remarkable phenomenon of
worlds trade in the history of interna-
tional commerce reports. The expectation
of our manufactured commodities is in
money value in excess of the expectation
of agricultural products, and yet the Lon
don Statist simply refers to the magnitude
of American crops and the amount of crop
expectations as the reason why the United
States in the. year 1912 was for the first
time not borrower of European capital,
that of Great Britain, except
upon short time obligations.
Our Increase in Wealth
If the people of the United States prac-
ticed economy similar to that which the
people of France and the rest of the conti-
nent of Europe have learned so well how
to utilize our increase in new wealth each
year, according to the London statement,
would be of magnificent proportions. AS
1t is the savings of this nation are esti-
mated by Sir George as approximately
s., ,00O, 100000 a year. AS his estimate is
that the United States owes Europe about
s., 600 100000 of fixed obligations, it is fair to
assume that if we put ourselves to the
task we could pay off this enormous obl-
which In these days we are securing.
At the date commonly fixed upon as that
Of the beginning of the new era of pros
perity In the United States consequent
upon the resumption of specie payment in
1879 and the recovery from much of the
devastation and dead loss occasoned by
the civil war, the annual increase in the
as about 81. 500 900, 900. And a considerable
part of that. Sir George asserts, came
from foreign countries.
Now, 30 years later. our farmers and
and producers of all kinds
are each year creating absolutely new
wealth estimated at not less than 5000
100000. Sir Georges view is that not more
than per cent OF this new wealth is OBJ
tanned from foreign countries
How Was It Done?
This net sum of 81, ,000, ,000, ,O000 tells a story
Of the energy, industry and fundamental
from a business point of view,
Of the American pc )ple. The Industrial
expansion of the United States in all III
rections has been within the past 80 years
and especially with the past Is. unparal-
eled in the worlds history. On the whole,
It has made credit stable and 1t has i'm
parted unshakable confidence in the credit
which lies behind high-grade American
securities of all kinds. Sir George says
that there is a large quantity of American
securities in which capital can be safely
invested. He speaks In terms which sug-
sest enthusiasm of a condition which has
enabled the United States to obtain at
home supplies of new capital In excess
Of the opportunities of any other country,
and he calls attention to the fact that for
sign capital now sought for is obtained by
the United States in insifinicant propor-
tions. In fact he goes SO far as to say
that an absolute stoppage of the supply
Of foreign capital for the United States
might cause this country to grow little
pWpr would mn how an iv<r fIye