Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-04
FOREIGN CREDITS
REACH BIG TOTAL
$1,O85, 900, 900 Lent Abroad
b by American Interests
g. During 1880.
BY CHARLES F. sPEARE.

bI CnARLES Fs
Special Dispatch to The Star.
NEW YORK, February 4.--To the
average American who has heard a
great deal about the curtailment of
American credits to foreign countries
during the past year and also of the
need of reviving these credits in order
to stimulate business abroad, it will be
a surprise to learn from figures pre-
sented by the Department of Commerce
that in 1880 $l,085 100000, or more
than the pre-war debt of the United
states, was invested outside of this
country.
While this compared with only SOIL
600. 900 in 1929, It measured fairly well
with the record from 1924 to 1928, in
elusive, during which flve-year period
the average annual export OF capital
was approximately S1,100 100000, or
about the same as last year.
Analysis of Investments.
An analysis of the 1880 foreign in
vestmentS indicates that a high ratio
occurred in Canadian issues. For in
stance, nearly $300,000,0Q0 is to be1ound
IN long-term bonds and notes, as well
as in common and preferred stocks OF
Canadian corporations. The largest bor-
IOWeIS III IIlC NNAS WY
Canadian railroads. those owned by the
government and those privately owned.
In addition, Canadian municipalities
borrowed about $138 900 600 Altogether
Canadian financing amounted to nearly
40 per cent of the total capital supplied
by American investors for foreign de-
yelopment in 1880.
Another unexpected feature of the re-
port was the expansion last year in the
sAl - Of
countries. This was nearly three and
one-half times greater than in 1879,
Amounting to 1921, 900, 900, compared
with SGT 900 900 in 1929. 1t included
the big coffee loan to Brazil and also
sizeable loans to Argentina. Most OF
it occurred in the first half of last year,
or before the revolutionary trend de-
yeloped in South American politics, out
of which the old governments OF four
countries were overtnrown' bringing
about serious disturbances in currencles
and leading up to today's application by
Peru for a moratorium on approximately
500 900, 900 of foreign debt.
This debt includes about $85 100000
of government loans. two at per cent
interest and the third at per cent,
a 61a per cent loan of about S3.O0O,OO0
TO the city of Lima and one OF T12 per
cent to the province of Callao OUT
standing in the amount OF 900.
There are also understood to be num-
Der of short-term bankers credits winch
will figure in the final debt reorganlza-
ton. The coupons on two of these
loans fall due on March /, with the
next payments on the large govern
ment loans on April / and June l.
South American Issues.
All Peruvian bonds have been re-
decting for weeks some such situation
as now develops. Consequently, the
news from Lima was not unexpected,
but it had a sentimental effect on
other South American issues where
the difficulties of meeting payments
have been quite generally recognized.
The heaviest decline in foreign IN
yestments of American capital last
wear were in Germany. Even before
the September election there was no
disposition to increase the commit
ments to German borrowers, in view OF
the fact that dollar loans amounting
to nearly one and one-quarter billion
dollars were already outstanding, OF
which the greater part were contracted
between 1925 and 1928. The main adj
dition last year to German totals was
through the government sig per cent
loan, whose reception in this market
was not satisfactory md which Subse-
cuently declined below 70 after being
brought out at 90.
One of the significant movements in
foreign securities last year was that OF
the refunding and repurchase by orig
inal borrowers. In no regent year has
this been on such large scale, amount
ing to S21s,000,000 through direct re-
funding and probably nearly as much
through market operations. AS re-
49, of halaV1ra of loans last
will eventually be found to have been
below the average for the period be-
tween 1924 and 1929.