vi REPARATION, INTER-ALL Y DEBT, ETC. 161

remittances are estimated at not above $1000 milliona year. Thus, in order to balance the account asit now stands, the United States must lend to therest of the world, in one shape or another, not lessthan $2000 million a year, to which interest andsinking fund on the European Governmental WarDebts would, if they were paid, add about $600million.

Recently, therefore, the United States must havebeen lending to the rest of the world, mainly Europe ,something like $2000 million a year. Fortunatelyfor Europe , a fair proportion of this was by way ofspeculative purchases of depreciated paper currencies.From 1919 to 1921 the losses of American specu-lators fed Europe ; but this source of income canscarcely be reckoned on permanently. For a timethe policy of loans can meet the situation ; but, as theinterest on past loans mounts up, it must in the longrun aggravate it.

Mercantile nations have always employed largefunds in overseas trade. But the practice of foreigninvestment, as we know it now, is a very moderncontrivance, a very unstable one, and only suitedto peculiar circumstances. An old country can inthis way develop a new one at a time when the lattercould not possibly do so with its own resources alone ;the arrangement may be mutually advantageous,and out of abundant profits the lender may hopeto be repaid. But the position cannot be reversed.

M