capital had developed and irrigated the great agricultural areas, trade with other countries became the source of foreign capital, for the trade balance became more and more favorable for the United States. If this balance were settled in gold, the whole European supply of precious metal would have to be removed to America.
It is difficult to determine accurately the extent of America's indebtedness to Europe. According to Mr. L. F. Loree, President of the Delaware & Hudson, ("The Annalist," June 28, 1915), four fifths of Europe's investments in the United States is in railroad stock. If we take this stock at par value, the total amount of European holdings in the United States would be $3,408,401,342.[1]
On the other hand, Mr. John J. Arnold, writing on "The American Gold Fund of 1914,"[2] says that, according to the statistics of the U. S. Bureau of Foreign and Domestic Commerce, the United States owe Europe no less than $7,000,000,000.
This figure is divided as follows:
England ______ $4,000,000,000
Germany _____ $1,250,000,000
France _______ $1,000,000,000
Holland ________ $650,000,000
No matter how great is the divergence between these two figures, the fact remains that the United States owe an enormous amount to Europe, and that this debt was steadily increasing up to the time of the war. There were times when England was compelled to call in some of her American investments, and such periods were usually accompanied by more or less severe financial depression in the United States.
The war has brought great changes in the financial status of the United States. Instead of a debtor nation upon the financial market of the world, the United States are rapidly becoming a creditor nation. This fact is of tremendous importance in forecasting the near future of the Russian-American commercial relations, and deserves special attention.
Immediately before the outbreak of the war, towards the end of July 1914, the United States passed through a period of acute financial depression. It was caused by an extraordinary demand for gold from Europe. The European stock-exchanges were practically inactive, and almost all of their business was transferred to New York. As a result of this the New York
