Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-14
u. S. FIRMS EXTEND
INVESTMENT ABROAD
American Capital Freely Used to
Promote Trade in Foreign
Fields.
specia1 dispatch to the star.

Special Dispatch TO the star.
NEW YORK, october 1.-THE
vast increase in the investment of
American capital in industrial under
takings in other countries has become
an outstanding feature of the inter-
national movement of capital in the
last two years.
This movement has been causing
alarm in the United States and abroad,
for several months ago British
electrical concern created an inter-
national investment controversy by an
attempt to limit its ownership and
control to British stockholders. This
failed but 1t was indicative of fear
by European industrials of American
control.
The American Federation of Labor
has been disturbed by attempts of
American manufacturers to establish
factories in other countries, for fear
the goods may be imported back to
the Uniter States in competition with
American products.
1t Is true American capital has
obtained control of a considerable
number Of foreign enterprises, but 1t
is likewise true that foreign capital
for years has had control of many
American enterprises, and usually
such control has been to the advantage
of all concerned.
The prime consideration in the
establishment of American factories
abroad is to win and hold a trade
which cannot be procured and held, at
least to advantage, in any other way.
All American manufacturers would
prefer to do their manufacturing in
the United States, where plants and
organizations are already established,
and where control of management can
best be exercised. For as soon AS
American manufacturers enter a foreign
field they are faced with difficulty.
First there Is a foreign tariff to be
overcome. There are also ocean
freight and foreign credit, and national
prejudice in favor of domestic prod
ucts which must be conquered.
Second consideration in the establish
ment OF American products abroad
lies in the dependence of some Amer
lean industries upon foreign raw
materials required by American manu-
facturers, who find 1t advantageous to
establish their own factories abroad
to insure a supply Of products at low
prices. All such. products would be
manufactured abroad in any event
the only question is whether their
ownership Is to be American or
foreign.
A third class Of American invest
vestment for profit without regard to
Gaze American ownership is purely
incidental.
The establishment Of American
factories abroad usually results in an
immediate increase in wages in the
countries interested, improvement in the
standard Of living and general
stimulus to domestic prosperity, all
with the result that the buying power
Of the people in such countries is in
creased, to the manifest advantage
of American exports in other lines.
This merely illustrates the fact that
the manufacturing industries of the
world are more closely interdependent
than may at first be realized, and
manufacturing for international trade
cannot long be developed upon an
uneconomic or artificial basis. Sooner
or later manufacturing in any line will
be carried on where and when the
economic advantages dictate.
There is less actual competition
among countries in international trade
than at first appears. Sooner or later
trade in any line goes to the country
which can produce that line to the
best advantage.
Copyright, 1929, by North American News
paper Alliance.)