Including both the fixed investments and the floating loans, the amount of capital borrowed by the United States from other countries is about $6,500,000,000, the annual interest charge upon which is about $300,000,000.

An offset to the large amount of capital invested in the United States is the capital invested by American citizens in other countries, more especially in Mexico, Canada, in the Southern American States, in the Philippines, in Cuba, etc. . . . The amount of American capital invested in other lands in this manner both publicly and privately is probably $1,-500,000,000 yielding an income of about $75,000,000 a year. By deducting the interest - $75,000,000 - received upon

American capital placed abroad from the interest - $300,-000,000 - which the United States pay upon capital supplied to them by other lands, I arrive at a net payment of $225,-000,000 by the United States to other countries for interest and dividends upon capital. This sum the United States has to remit each year by exports of produce.

The value to the United States of loans of capital by other lands [page 177]. The capital obtained by America from other lands, mainly from Great Britain, was chiefly for the purpose of extending and improving the railway system of the country. No one can survey the remarkable growth in the production, wealth, and population of the United States without expressing his appreciation of the great part played by railway extensions in bringing about that growth. The extension of railways alone made it possible to bring into cultivation the vast tracts of virgin lands that are now under the plow. Without railways the United States could not now produce annually agricultural wealth of the value of about $8,000,000,000. Again the extension of railways alone made it possible to reach and to develop upward of $2,000,000,000 of mineral wealth per annum. It is the railways that enable the people of the United States to reach and to obtain for their use the vast quantity of lumber annually cut from the forests. Lastly, the immense manufacturing industries of the States which now distribute over $3,000,000,000 in wages could never have been built up but for the construction of railways.

The provision of some $6,500,000,000 of capital to the United States by older countries, mainly for railway construction, has enabled the American people to devote their rapidly growing savings to the building and furnishing of homes, to the equipment of manufactories, to fitting out retail establishments, and to other purposes to a much greater extent than otherwise would have been possible, and in this way the foreign capital has greatly accelerated the growth of population, production, and wealth. By the use of the $6,500,000,000 of capital obtained from other countries the annual production of wealth by the United States has, I calculate, been increased to a nearly corresponding extent and the accumulated wealth of the country has been increased by many times the amount of the capital borrowed. The additional value given to land alone by the construction of railways is so vast and so apparent that it needs no demonstration. The increase in the annual production of wealth by the United States rendered possible by the importation of capital has been at least twenty times greater than the sum paid for interest. The investment of this capital by the older countries in the United States has thus brought advantages which cannot easily be exaggerated. . . .

Tourist and other expenditures [page 179]. The number of American citizens visiting other lands in the course of the year is now upward of 200,000. The data I have been able to obtain as to the expenditures of these tourists shows that the sum expended by them approximates to $1,000 per person. This sum includes merely the passage money and the sums expended in other countries for food, transportation, and other miscellaneous expenditures. It does not include the sums expended upon works of art, jewelry, clothing, etc., which are declared at the customs and are included in the value of the goods imported into the United States. In the aggregate, tourist expenditures for the purposes I have mentioned reach a total of about $200,000,000. On the other hand, a number of foreign tourists visit the United States and their expenditures should be placed against those of American citizens. . . . Apparently the number of visitors, other than immigrants passing through to Canada, was about 30,000. The expenditures of visitors to the United States may be taken at about $1,000 per person, excluding all shipping transportation, or an aggregate sum of visitors' expenditures in the United States of $30,000,000. On balance, therefore, the United States has to pay to other countries a sum of about $170,000,000 a year to cover tourist expenditures. . . .

[Page 182] For all practical purposes I calculate that the money brought into the country by immigrants about counterbalances the money taken out of the country by emigrants returning to their native lands and by "other than cabin passengers" visiting other countries.

Remittances to friends. The great prosperity of the United States enables many of its citizens who have come from other lands to make gifts of large sums of money in the aggregate to friends in the old countries. The remittance of this money means that the United States has to send considerable quantities of produce abroad for which there is no corresponding item on the import side of the account, as the produce goes for the purpose of providing the funds necessary to cash the postal money orders and other drafts remitted to friends. The amount of these remittances is exceedingly difficult to calculate, but that it is large every one admits. . . .

With the data at my disposal I do not feel justified in placing the amount of money remitted by American citizens to friends in other countries at a larger figure than $150,000,-000. This is still a very large sum, and is a factor of very great importance in calculating the trade balance of the United States and the amount of produce which has to be remitted for various purposes other than to pay for goods imported.

Freights [page 186]. The United States possesses a mercantile marine large enough to convey but a small portion of the produce they export and import, and considerable payments have to be made for shipping services. In 1907-8 the imports into the United States by sea were valued at $1, 123,000,000. Of this amount $152,000,000, or 13.5 per cent., was carried in American vessels and $971,000,000, or 86.5 per cent., in foreign vessels. In the same year the exports from the United States were valued at $1,670,000,000, of which amount the produce conveyed in American vessels was valued at $120,000,000, representing a proportion of only 7.2 per cent and the balance of $1,550,000,000, or 93.8 per cent, was conveyed in foreign vessels. The sum which the United States had to pay to other lands for marine transportation is much smaller than is usually calculated. . . . After taking all these factors into consideration I calculate that the net sum which the United States pays to other countries for the transportation of merchandise is about $25,000,-000 per annum. Payment of this sum has also to be remitted to other lands by exports of produce. . . .