SINCE the United States became a creditor nation Canada has been the favorite field for American foreign investment. At the beginning of 1931 the investment of capital from the United States in Canada was about 30 percent greater than the combined American investment in Great Britain, Germany, France and Italy. Considerably more American capital has been invested in Canada than in the whole of South America, and American investors have purchased nearly as large an amount of the direct and guaranteed obligations of the Dominion, provincial and municipal governments of Canada as they have of bonds issued by state governments in the United States.
Estimates of American investments in foreign countries are necessarily subject to a certain margin of error, owing to the incompleteness of the records and to the constant changes as funds flow back and forth between the borrowing and the lending countries. Both the American and the Dominion governments have recently made careful estimates of the amount of capital from the United States which has been invested in Canadian securities or placed directly in Canadian industries, and although the figures show some variation, as was to be expected, they conform closely enough to furnish a fairly accurate picture of creditor and debtor relations between the two countries.
According to the United States Department of Commerce, the total American investment in Canada at the end of 1930 was approximately $3,790,000,000; according to the Dominion Bureau of Statistics, the total as of January 1, 1931, was $4,107,803,000. Two unofficial estimates of American investments in Canada as of January 1, 1931, have also been made. That compiled by Professor Kenneth W. Taylor, of McMaster University, conforms very closely to the total reported by the Department of Commerce. The estimate by Dr. Max Winkler, however, places the total at $4,436,011,000. This larger figure is due possibly to the inclusion of short-term loans by American banks and authorized new stock issues of Canadian subsidiaries of American corporations which may not have been subscribed for wholly in the United States.[i]
Before the World War
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