Evening star., 1934-08-19
Foreign Loans to Americans
BY FREDERIC J. HASKIN.

When mention Is made Of foreign
lending there Is usually an instant
assumption that loans by Americans
to foreigners are being referred to.
There are, however, two sides to this
business of foreign lending. Citizens
Of foreign nations In all parts Of the
world have lent to Americans huge
sums, and at present Americans owe
to these foreigners an aggregate Of
So, ,S3S, SIT 900. This must be COM
pared with the $lS,7eo, 900, 900 owed
by foreigners to Americans. The sum
owed by foreigners is, obviously, great
ly in excess. but, nevertheless, an item
Of two-and-one-third billions which
Americans owe abroad must be given
consideration.
These are private loans as distin-
guished from the loans made by the
United States Treasury to the alice
governments during the World War.
Those debts. having q political color,
cannot be placed in exactly the same
category with the straight commercial
debts. So many agreements, so many
treaties, so many understandings have
been entered into since the armistice
concerning those debts that the whole
matter Is somewhat confused. The
issues are clearer as to the private
debts owed by foreigners here and by
Americans abroad.
They are represented chiefly by
such evidences Of indebtedness as
bonds and debentures. Governments
are parties to these debts. That Is,
Americans have purchased great
quantities of the bonds Of European
and other foreign political divisions,
Bonds Of the republic Of Germany.
of the city Of Paris, Of the common
wealth Of Austria, of the Dominion Of
Canada and so on, have been pur-
chased as investments by Americans,
One might even mention Peruvian
bonds. This means that American
citizens, in their private capacity,
have lent this money to these foreign
governments. Conversely, citizens Of
Germany, of Italy, Of JAPAN Of all
the world have purchased bonds OF
the city of New York, of the State OF
Maryland and Of the United States
Government. Thus these foreigners
have become the creditors Of these
American sovereignties.
Foreigners Confidence I'm American
Securities.
In the same manner Americans
have lent q huge sum Of money to
foreign public utilities, some entirely
privately owned, some owned or
backed by local governments. Fur
ther, there have been large American
purchases Of the bonds, debentures
and stocks of wholly private indus
trial corporations, such as mining
companies, manufacturing plants and
service organizations. When an Amer
ican buys bond issued by the Cunard
Steamship Co., for instance, he Is
lending his money to that foreign
interest. On the other tack, 1t is
found that large blocks Of the stock
and the bonds Of American COM
panies have been purchased by for
eigners. American railroads have
long been O popular investment with
people of other nations. American
bank stock also has been purchased.
When, for example, an Englishman,
Dutchman or a Frenchman buys
the bonds of the Baltimore & Ohio
Railroad Co. 1t means that the
foreigners are lending money to those
American business interests.
1t is q remarkable fact that during
the most depressed years the United
States has probably ever known, when
Americans were showing little con-
fidence In the securities Of their own
business enterprises, foreigners felt