essions and with China; we envisaged opportunities, not
only of an immense American investment, but of an even greater American
trade.

What we believed of ourselves, Europe only too credulously believed of
us. Leading European economists and publicists were completely
convinced that the United States was irrevocably embarked on "the sea
of imperialism." "The recent entrance of the powerful and progressive
nation of the United States of America upon imperialism," wrote Prof.
John A. Hobson in 1902, "... not only adds a new formidable competitor
for trade and territory, but changes and complicates the issue. As the
focus of political attention and activity shifts more to the Pacific
States, and the commercial aspirations of America are more and more set
upon trade with the Pacific Islands and the Asiatic coast, the same
forces which are driving European States along the path of territorial
expansion seem likely to act upon the United States."[3] Professor
Hobson and other foreign observers believed that our great trusts,
which were being formed with reckless suddenness, would enormously
increase the capital seeking an outlet, and that new imperialistic
ventures would result. "Cuba, the Philippines, Hawaii," he insisted,
"are but the _hors d'oeuvre_ to whet an appetite for an ampler
banquet."[4]

This development toward a congestion of capital, though confidently
anticipated both in the United States and in Europe, did not take
place. About the end of the century an enormous extension of the
general field for foreign investment raised interest rates all over the
world. The demand for capital grew with astonishing rapidity. In {52}
part this was due to British, French and German foreign investments,
but it was also the result of a quickened economic tempo in all
countries. New industries were created, wages rose (though in most
countries not so rapidly as prices) and the outlets for the supposed
superfluous capital were greater than ever.

Especially in the United States was the development contrary to that
which had been anticipated. Capital was not rendered idle because of
any slackening in the nation's consuming capacity, for the men of
average and small income were able to purchase more than ever before.
The farmers alone, whose property increased in value from twenty and a
half billions of dollars in 1900 to forty-one billions in 1910 (an
increase of over 100 per cent. as compared with less than 28 per ce