Viewing page 45 of 94

This transcription has been completed. Contact us with corrections.

STRENGTH OF AMERICAN CAPITALISM    331

In 1928 and 1929 there was a substantial decline of foreign financing in the United States as compared with the peak in 1927. Foreign financing in the United States in 1928 was $150,000,000 less than in 1927 and in 1929 declined to less than half of the total for 1927.

[[4 column table]]

[[year]] | Foreign Financing in the U.S. | Volume of Exports | Volume of Imports

1929 | $779,870,286 | $5,248,600,000 | $4,400,700,000

1928 | 1,576,820,900 | 5,130,000,000 | 3,991,000,000

1927 | 1,724,684,425 | 4,865,000,000 | 4,085,000,000

1926 | 1,349,793,040 | 4,808,300,000 | 4,431,200,000

1925 | 1,307,307,500 | 4,909,800,000 | 4,226,600.000

1924 | 1,244,795,765 | 4,591,100,000 | 3,609,900,000

There was no concomitant decline in the volume of American exports. The export trade balance for the first quarter of 1929 of $295,167,000 was the largest for any corresponding quarter since 1921. This was probably the result of the fact that American capitalism strained itself to sell in foreign markets through the granting of additional short time credits. However, there was no permanent solution possible on this basis. The imperialist period of capitalism necessitates the absorption of the long time debt obligations of the debtor countries by the imperialist country which exports its surplus capital. almost insurmountable obstacles were thrown in the way of such finance operations by the American stock market "prosperity." The result was that "in the absence of a market for foreign securities in this country the world has had no other means of settling its large adverse trade balance with us than by shipping gold, which in many cases could be ill spared from bank reserves. The impairment of foreign purchasing power thus resulting is, and must continue to be until corrected, a cloud in the background of American prosperity." (National City Letter, July, 11929).

America "prosperity" had resulted in the unprecedented stock market boom which in turn was undermining the "prosperity" by driving American finance capital to a stage where it would not finance the export of capital.

The only means by which the adverse balance of trade could be balanced was by the release of foreign exchange and the export of gold to the United States. (The high tariff wall with which American capitalism has surrounded the internal market made impossible the settlement of this trade balance through the export of foreign commodities to the United States.) Another significant factor entered into the situation. We have discussed above the loans of "others" in our call money market for stock market