Foreign investment

“ To fulfill the conditions of the hypothesis, we must suppose an entire cessation of the exportation of capital for foreign investment. We must suppose the entire savings of the community to be annually invested in really productive employment within the country itself, and no new channels opened by industrial inventions, or by a more extensive substitution of the best-known processes for inferior ones. ”

“ 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. ”

“ But even so, foreign investment isn't something to be scared of. It brings us a host of benefits, including jobs and lower interest rates for all Americans, whether they be homebuyers , small businessmen, consumers, or farmers. ”

“ From the maturities, refunding operations, and interest remittances alone, growing out of the permanent investment of foreign money in our securities, there results a very great amount of international security and exchange business. Whether Europe's investment here amounts to three billions or four billions or five billions, it is impossible to say ”

“ There are, in the first place, all the foreign investments in what might be called private enterprise—‌the English money, for instance, invested in fruit orchards, gold and copper mines, etc., in the western states. ”

“ The democratically elected government, installed in August 1997, inherited massive international debts and currently relies on revenues from its maritime registry to provide the bulk of its foreign exchange earnings. The restoration of the infrastructure and the raising of incomes in this ravaged economy depend on the implementation of sound macro- and micro-economic policies of the new government, including the encouragement of foreign investment. ”

“ Should there be restrictions on repatriation of foreign investment capital (such restrictions could prevent an investment panic, but at the same time they negatively affect investor's confidence) ?
Answer: Short term and long term capital flows are two disparate phenomena with very little in common. ”

“ The United States has historically been the largest worldwide recipient of foreign direct investment but has seen its share decline in recent years. (6) The United States faces increasing competition from other countries as it works to recruit investment from global companies. (7) Foreign direct investment can benefit the economy and workforce of every State and Commonwealth in the United States. ”

“ But in addition to the amount of foreign money thus employed in these bills of exchange, our vast foreign trade must result in the temporary employment here of the proceeds either of these bills or of goods sold in our market, to be used in the purchase of goods here, for investment, or for safe-keeping in time of trouble, and must greatly add to our available resources. ”

“ The State establishes multilateral and bilateral cooperation mechanisms on investment promotion with other countries, regions and international organizations, to strengthen international exchanges and cooperation in the field of investment. ”

“ The case of French foreign investments is pertinent. As a result of the activity of great bankers, who rule both finance and politics, some forty billion francs have been invested in foreign countries. ”

“ We seem thus to be entering upon an economic competition not entirely unlike that which existed between Germany and England. We too have gone over to a policy of extending our foreign markets and of protecting our foreign investments. More and more we shall be interested in politically and industrially backward countries, to which we shall sell and in which we shall invest. Inevitably we shall face outwards. ”

“ Third, the unprecedented volume of foreign investments that has entered the economy will be further stimulated by new incentives. Policies on sharing, repatriation of capital and tax exemptions shall be supplemented with vigorous measures on an industry-to-industry basis. We shall expand the areas in which foreign investments can take part to include more export-oriented projects. Portfolio investors will be encouraged through the transformation of more companies into truly public corporations that will ensure easy cash conversion of investments. ”

“ Our exports and our economic strength depend upon our access to an open, stable, and growing world market. The nations of the world are becoming increasingly intertwined in a global economy. We must continue our efforts to remove foreign barriers to American goods and services, to open new markets, and to keep them open. ”

“ On the other hand, there are imports so entirely of foreign origin, and so free from considerations of competition with domestic industry, that a large revenue may be raised upon them in the custom-house, without disturbing the freedom or equity of international trade. ”

“ A really far-sighted policy which would make it its principal object to assist the progress of our foreign trade would have to guard against the mistaken idea that the levying of high rates was the only means of obtaining interest on the capital invested. ”

“ In the case of England and Germany, as well as many other prosperous countries whose foreign-trade sheets show an excess of imports over exports, this excess represents the profit on trading abroad, and the inflow of returns upon capital invested abroad. ”

“ We must try to get the optimum advantage out of our limited foreign exchange resources by funnelling them to these industries that can contribute most to our national income. Overcrowding in many industries needing imported capital equipment, investing in many lines of production not basic to our development, and importation of non-essential consumption goods are unnecessary drains on our foreign exchange. We should bring existing industries to their efficient productive capacity before going ahead with any but the most necessary new ventures. ”

“ This circumstance [Pg 221] is counted upon by the leadership to motivate trusts toward attaining optimum efficiency in export production and toward adjusting output to foreign market requirements. Financial incentives to surpass official foreign trade targets are provided by allocating the producers and foreign trade organizations a portion of the receipts from excess exports and a portion of savings made on imports through import substitution. ”

“ It is quite clear to my mind that the effect of our large foreign trade has been distinctly in the direction of lowering the value of money in our market, and consequently an undoubted aid to our industries. ”

“ The German economic system as it existed before the war depended on three main factors: I. Overseas commerce as represented by her mercantile marine, her colonies, her foreign investments, her exports, and the overseas connections of her merchants; II. The exploitation of her coal and iron and the industries built upon them; III. Her transport and tariff system. Of these the first, while not the least important, was certainly the most vulnerable. The Treaty aims at the systematic destruction of all three, but principally of the first two. I (1) ”

“ On this supposition, the foreign demand for the productions of the country is increased; which necessarily alters the international values to its advantage, and to the disadvantage of foreign countries, who, therefore, though they participate in the benefit of the new product, must purchase that benefit by paying for all the other productions of the country at a dearer rate than before. ”

“ It may be questioned if figures showing the proportions of our industry devoted to supplying goods for the foreign market correctly indicate the importance of the foreign market to us. It may be urged that if we should lose our foreign market, we should merely turn to producing more for the domestic market, and that the loss would not be the whole of our receipts from foreign trade, but merely the cost of transition, and the loss that comes from shifting to production to which we are less suited. ”

“ In addition to the consideration of the exports and imports, it has been show to be requisite to measure the further expenditure of nations upon each other - including therein all national extravagance exhibited in the granting of foreign subsidies or loans and in keeping up costly armaments abroad, as well as all individual extravagance, as displayed in excessive foreign travel or residence, or in the speculations on foreign Stock Exchanges. ”

“ A danger to foreign trade is that our exports might conceivably be limited to certain quarters, and might thus rest upon a frail and shifting foundation. Fortunately, however, this is not so, for our commerce is being built upon the prosperity of the whole world. ”

“ On the whole, I should expect most of the ready capital in this country, which under the conditions would be hunting for investments in new enterprises, to be absorbed for some time to come in taking up American securities parted with by foreign holders. ”

“ When we lend money to foreigners we give them the right to draw on us now in return for their promises to pay some day; in other words, we make an invisible import of foreign securities, and in the present state of our trade balance all imports, whether visible or invisible, need careful watching. ”

“ The vulgar theory disregards this benefit, and deems the advantage of commerce to reside in the exports: as if not what a country obtains, but what it parts with, by its foreign trade, was supposed to constitute the gain to it. An extended market for its produce—an abundant consumption for its goods—a vent for its surplus—are the phrases by which it has been customary to designate the uses and recommendations of commerce with foreign countries. ”

“ But if any of our people are sighing for a foreign market, and value it more highly than our own, they can import foreign raw material practically free of duty, and after advancing it into the higher forms of manufacture, can go out and possess the world’s markets. ”

“ All the main elements of the problem of foreign exchange have now been examined—British exchange control, the sterling area, the payments agreements with foreign countries, the value of British reserves and external investments and the process of turning the latter into current cash, import restrictions, the export drive, the mounting total of overseas war expenditure. ”

“ If they were entirely separate, without political or commercial connection, it is manifest, that the consumption of the manufacturing states of foreign articles could not exceed twenty millions, the sum at which the value of their exports, of domestic products, and the profit of their foreign trade is estimated. ”

“ To reduce the cost of production, facilitate the shipping of goods, and meet the local needs of foreign markets, or in other words to conduct foreign trading on an intelligent and scientific basis, is the one hope of the people of the United States in the world expansion of their industries and the profitable employment of labor. ”

“ Foreigners would never think of sending us goods unless we paid for them, either in other goods, or in money. Now, if we pay in goods, workmen will of course be needed to make [Pg 133] those goods; and the more we buy from abroad, the more we shall need of home produce to send in exchange. Thus, the purchase of foreign goods encourages home manufactures in the best possible way, because it encourages just those branches of industry for which the country is most suited, and by which wealth is most abundantly created. ”

“ Moreover, if any of the Reserve Banks find that their resources are regularly in excess of domestic requirements, they may be used to facilitate the financing of the foreign trade of the country with domestic capital. It is also very generally believed that the power to engage in foreign exchange operations may be so used that it will be possible to rely upon securing abundant foreign funds in periods of financial strain. ”

“ The government, of course, will have no pecuniary responsibility or interest in the enterprise, and the essays upon the various branches of American production will be general, and not in the interest of any firm or business organization. The enterprise is designed to collect material for the improvement of our export trade, to show what American producers can furnish for the markets of the world, to encourage American competition with foreign markets, and to call the attention of foreign capital to the opportunities of sound and profitable business with this country. ”

“ The international values will so adjust themselves that, either by greater exports or smaller imports, or both, the requisite excess on the side of exports will be brought about, and this excess will become the permanent state. The result is, that a country which makes regular payments to foreign countries, besides losing what it pays, loses also something more, by the less advantageous terms on which it is forced to exchange its productions for foreign commodities. ”

“ Effects of Drawing Interest from Investments beyond the Social Boundary.—Not all of these are consumers' goods. Some capital goods are imported and, moreover, many consumers' goods are passed over to the group called HH ́ ́ ́ in our table,—the one that makes active instruments of production,—and in this indirect way the earnings of capital invested abroad add to the amount of capital at home. In the long run the exportation of funds for permanent investment may, by its other and more indirect effects, increase the supply of them at home. ”

“ Its ultimate object, however, it pretends, is always the same, to enrich the country by an advantageous balance of trade. It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets; and by restraining, in this manner, the exportation of a few commodities, of no great price, it proposes to occasion a much greater and more valuable exportation of others. ”