Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1927-10-18
More Capital to Europe

The decision of the New York Stock Exchange to
allow dealings In foreign stocks indicates that the
steady flow Of American capital to Europe, which
should be used in the development Of domestic indus
trise and resources, will be accelerated.
New York financiers are greatly elsted over the
decision Of the Exchange. It doubtless means addition
al profits secured at big risks, but it can in no way
the economic or commercial position Of the nation.
The United States has for years been a lender OF
large volumes of capital. first to foreign governments,
next to foreign municipalities, and later to certain
foreign corporations issuing government-guaranteed Sc
curities. Now this capital is going to foreign indus
trial corporations on their own merits, and the decision
of the Exchange means that a market for countless
millions Of dollars worth of such securities will be
created in the United Staes.
II is possible that American investors will profit
to some extent; but why would they not profit as much
and more IL that capital was invested in the develop
ment of the resources of the nation, the upbuilding Of
industries, the expansion of our foreign and domestic
trade? Every dollar Of American money that goes into
those securities means that Americans are financing
competition for American industry. Truly. this is an
anomalous condition, a condition which is In violation
Of every preeept Of economics.
The argument used by those who favored the de-
cision of the New York Stock Exchange was that it
would tend TO create profits for those who desire to
speculate in the shares. Admittedly an investment in
such securities is a speculation, but these are thous-
ands OF American investors VINO VII Q IeBaIu ~ a.
such. The fact that the stock is listed on the Ex-
change will in itself create a market among investors
who otherwise would devote their capital to the de-
velopment Of American industries.
Vast wealth is being poured into American indus
tries, it is true; and the people Of the United States
may, as some argue. owe a debt to mankind which de-
mands that we finance foreign competition. However,
the average American investor would not consider plae-
ing his capital at the disposal of foreign industrialists
IL IL were not for the efforts Of New York and other
eastern brokers who apparently are seeking to trans
fer Americas wealth across the Atlantic.
In every part Of the United States there is today
the very apparent need for more capital. There is not
a state in the Union which could not within the next
generation double or treble its wealth If capital were
available to develop its resources to the maximum. II
is only logical to presume that the industries and re-
sources that could be developed would be established
I'D a financial foundation fully as firm as those foreign
industries the New York Stock Exchange is now en-
deavoring TO persuade American capital TO finance.
America is not so wealthy that she can afford to
ignore her own resources and industries and divert to
foreign nations the capital needed to establish our do
nestle projects upon a firm financial basis.