The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1916-01-28
Foreign Investment Is
Commercial Preparedness
Says President Farrell

49,.
than heretofore. II II be handicapped
by the scarcity and d~earness Of
money. 10 will be stimulated by the
pressure OF dire necessity. II the
greatly increased burden of taxation
and higher cost OF living forces wage
conditions into closer relation with our
own, there will also be the stimulus OF
the struggle 20 regain a lost position
that will spur employers and employees
10 the making Of sacrifices u~ndreamed
OF before. The war has taught our
peple many things in the domain OF
economic fact to which they did not
formerly give sufficient heed. Not the
least valuable OF these lessons is the
realization Of how strongly entrenched
are our competitors in markets that
some OF US though lay open for our
occupancy. When the curtailment of
European investments in South Ameri-
a republics brought their develop
ment 10 a standstill in reducing their
purchasing power We had an object
lesson in the conditions precedent TO
the development OF foreign trade
Mr.. Farrell pointed out that an In
vestment Of over $4,000. 600. 900 OF Brit
ish capital in Latin-America had been
sent TO Latin-America in the form Of
goods Of British manufacture. that the
interest deriver from British foreign
Investments which total $4,000. OOO.-
600 in value. not only Offset the United
Kingdoms excessive imports over ex-
ports. but retained and strengthened
he British hold on neutral markets
throughout the world. The advantages
OF foreign investment Of United States
capital. he said. were evident in
American trade predominance in Can
ada. where about $500 200. 900 Of
American capital has been invested in
branches Of American factories. min
Ing. timber and agricultural enter
ptises. all tending 10 develop Canadian
resources and expanding Canadian de
man for American products which
were imported into Canada in 1897 to
the value OF only S57, goo. 600. In lesser
degree American investment OF United
States capital had stimulated export
trade in Mexico. the Central American
and Caribbean republics. He added:
1t is the export OF manufactured
merchandise. the increased volume OF
which must be largely dependent on
the readiness Of our people to invest
in foreign securities. These manufac-
lures fall naturally into two groups.
The first comprises general mcrchan.
disc sold 10 dealers and consumed by
individuals whose choice is regulated
only by a desire 10 obtain satisfactory
goods at q low price. The second con-
sists Of materials for construction
machinery and equipment required for
The development o. extensive enter
prises. Tn demand for these follows
The possession Of borrowed capital for
construction Of railways. tramWays.
port works. power plants. lumber mills.
plantations. packing establishments
and irrigation projects. mines, fac
tories and mills"
The scale on which such enter
prises are projected is constantly
growing. Millions are borrowed
where thousands were sufficient a
quarter OF q century ago Frequently
The loan contracts n arrangements
for tho supply of materials are com
bined in g. single transaction. assuring
fEc supply Of materials 20 the country
which provides the funds. Thus. rail
ways financed In London will be con
strucred by British engineers under
specifications drawn 20 favor british
%rTodducts and eventually British roll
Ing stock will De operated on British
rails By British officials. and a British
character impaired 10 tho demands
arising from the constructive activities
stimulated along the riaht Of way.
Railway enterprises promoted by Ger.
man capital have similarly served Ger
man commerce spheres Of CONNER
cial influence have thus been created
20 the advantage 81 AN interests anili-
ated directly or remotely with the
original loan.
What is true Of railroad construc.
fiou g. true Of most other enterprise
based on foreign investments. a rar-
tial exception may occur in tho case
~ loans 20 governments who. boo tho
matter 0f constructive enterprises are
not usually required to favor specified
material In tho case Of China. even
this exception does not hold good. but
IN most other countries government