as near to London and Rotterdam as to
New York, and much of the trade and of its future increase will revert
to Europe. In the years to come, however, more than in the present or
past, the United States will be a formidable competitor for the
world-markets, and will incur enmity and jealousy in the attempt to
maintain and improve its position.

{67}

A similar development is taking place in the field of investment. In
former years, British, French, Dutch, Belgian and German financiers
were requested, indeed begged, to invest their surplus capital in
American enterprises. To these financiers we went cap in hand, and
they did not lend their money cheaply. The complementary relation
between lending Europe and borrowing America was productive of the
friendship of mutual benefit. To-day we are still a debtor nation, but
only in the sense that the great financier is a debtor. We ourselves
have a large capital, and in the main go to Europe merely for the sale
of safer and less remunerative bonds, while the common stock of new
enterprises is likely to remain in America. Or we graciously "let
Europe in on a good thing," conferring, not asking, a favour. In the
meantime, we are paying off our indebtedness as is indicated by the
balance of trade, which since 1876 has almost invariably been strongly
in our favour.[10]

The war has still further reduced our foreign obligations. During the
two years ending June 30, 1916 our excess of exports over imports was
over three and one-quarter billions of dollars. Moreover, in 1915 we
did not incur, as ordinarily, a large debt as a result of the
expenditures of Americans in Europe. The result of this development
has been twofold; a considerable transfer of European holdings of
American securities to Americans, and the direct loan of American
capital to Europe. While it is impossible to quote exact figures, the
American debt to Europe can hardly have been reduced during the two
years ending August 1, 1916, by less than two to {68} two and a half
billions, or perhaps a third, or even a half, of our former debt to
Europe.[11]

In the meantime the United States though still a debtor nation has also
become a creditor nation. Just as Germany, before the war, borrowed
from France and loaned to Bulgaria and Turkey, so the United States,
while still owing Europe, invested in Mexico, Canada and South America.
It is probable that by 1914 considerably over one and a quarter billion
do