New-York tribune., 1919-01-08

One of the largest of our prob
lens now is how to interest Ameri-
can capital in foreign enterprises
on big scale; for this is the foun-
dation of any great expansion of
American trade. Immense credits,
granted by our government to the
governments of England and France
have an inevitable political SAVIOR
and can scarcely be used as invest
ments, and investments as we'll as
loans are needed. Perhaps England
and one large American enterprise
have more or less shown the way.
The American International Cor
poration is, in some sense, quite a
departure in our larger corporation
enterprises. We have had holding
companies in single lines, as the
Standard Oil, and other oil com
panies, some of the large copper
companies, the International Har-
vester and the like. The American
international has gone into num-
Der of things, shipping especially. 1t
has the prestige of a great firm be-
hind it, its directorate includes men
of high standing, and the character
of its investments has been such as
to give weight to the undertaking.
Something of this sort may be just
what is needed to advance foreign
investments.
Obviously, the average American
investor who puts his money into
railway shares or the stocks of the
large industrials cannot have the
same feeling toward an enterprise
whose principal theatre of action
will be South America or China. or
Russia or England or France. The
English investing public, andu the
French public also have been edu-
Gated to this sort of thing; and SO
in English financial comment, a dis
cussion of Argentine rails or Bur
mese plantations is almost as
familiar as, say, our steel or copper
companies to us. But this process
of education takes time; and in the
sense of looking outside our own
borders, the American investor is
highly insular. What might be done is
the formation, under the most con-
servative financial auspices, with
more or less the backing of our big
banks, of large holding companies
that might issue both stock and de-
benture bonds. This type of enter
prise is we'll known in England and
has become highly developed. An
example is to be found in some Of
the rubber companies.
The Rubber Plantations Invest
ment Trust, for example, is both an
active rubber company and has
large investments in other COM
panies. Its investment account
shows that its properties are divided
in the proportion of about two
thirds in rubber, 80 per cent in tea
and around 6 per cent in tobacco.
1t issues quite explicit reports,
showing the location of it's invest
ments, the chief companies in which
an interest is held, the valuation
of its securities and the like. 1t is
not large company in the Ameri-
can sense, but it offers to the Brit
ish investor, and especially to the
small investor, an opportunity to
engage in enterprises of rather
speculative nature, which it would
be folly for them to consider as sim
gle undertakings. With holdings in a
dozen rubber or tea plantations.
some of these may go wrong, the
crop fail, and the loss may be made
up by others The principle is ex
actly the same as our larger oil
companies. Drilling oil wells is a
highly hazardous occupation. Only
company that can drill wells in
large numbers can be considered
otherwise than more or less of a
hazardous enterprise.
One large problem in the develop
ment of foreign investment corpora
tons here would be less how to
gain for them the confidence of
investors than how to keep the field
free from the swarms of sharks and
swindlers who would inevitably in
wade it the instant it began to
prove popular with the public. If
Congress should pass "blue sky"
law the incornOratiop of c,,ol, 49,.