llars of American capital was invested in Canada, Mexico, Cuba and
the Republics of {69} Central and South America, not including the
capital represented by the Panama Canal.[12]

Even to-day (Nov. 1, 1916) there is still a probable excess of our
debts over our credits with foreign nations of at least two billions of
dollars. In comparison with our total wealth, however (estimated by
the census of 1910 at 207 billions and since then largely increased),
this indebtedness seems comparatively small. The national income is
rapidly expanding and as the chance to secure exceptionally large
profits in railroad and industrial enterprises diminishes there is an
increased temptation for surplus capital to flow abroad. Whether or
not we shall again have recourse to the fund of European capital in
developing our immense resources, it is hardly to be doubted that we
shall increasingly invest in foreign countries, and especially in
Mexico, and elsewhere in the Americas.[13]

Such a development is entirely legitimate and within bounds desirable
both for the United States and to the countries to which our capital
(and trade) will go. The possible field of investment in Latin America
and the Orient, to say nothing of other regions, is still immensely
great, and as capital develops these areas their {70} international
trade will also grow. There is no reason why the United States should
not take its part both in the investment of capital and the development
of trade with these non-industrial countries.

As we so invest and trade, however, we must recognise the direction in
which our policy is leading us and the dangers, both from within and
without, that we are liable to incur. The more we invest the more we
shall come into competition with the investing nations of Europe. We
are already urged to put capital into South America on the just plea
that trade follows investment, and the same forces that are pushing our
trade outward will seek opportunities for investment in the mines and
railroads of the politically backward countries. Like European
nations, we too shall seek for valuable concessions, and may be tempted
(and herein lies the danger) to use political pressure to secure
investment opportunities. What happened in Morocco, Persia, Egypt,
where the financial interests of rival nations brought them to the
verge of war, may occur in Mexico, Venezuela or Colombia, and the
United States may be one of the parties involved.