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Foreign Investment in the U.S. Economy before 1914

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  • MIRA WILKINS

Abstract

The United States was the world's largest debtor nation in 1914. From independence to the mid-1870s, American federal, state, and local government securities had represented the greatest single attraction for foreign investors, yet by 1914 foreign investment in sovereign debt was small. By the mid-1870s, the private sector had become the major recipient of foreign investment, with huge sums going into financing the vast national railroad system. Then, large American industrial, public utility, and retail corporations looked to foreign as well as domestic sources of finance. Because Americans could obtain funds from abroad, American growth was never retarded by the absence of capital. Especially in the late nineteenth and early twentieth century, foreign direct investment—carrying with it technology, know-how, and management—went into U.S. agriculture, manufacturing, and services. Foreign capital played a substantial and beneficial role in U.S. economic development from independence to 1914.

Suggested Citation

  • Mira Wilkins, 1991. "Foreign Investment in the U.S. Economy before 1914," The ANNALS of the American Academy of Political and Social Science, , vol. 516(1), pages 9-21, July.
    • Handle: RePEc:sae:anname:v:516:y:1991:i:1:p:9-21
    DOI: 10.1177/0002716291516001002
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    References listed on IDEAS

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    1. Laves, Walter H. C., 1935. "Foreign Bondholders and American State Debts. By Reginald C. McGrane. (New York: The Macmillan Company. 1935. Pp. vii, 410.)," American Political Science Review, Cambridge University Press, vol. 29(4), pages 686-687, August.
    2. Mira Wilkins, 1988. "The free-standing company, 1870-1914: an important type of British foreign direct investment," Economic History Review, Economic History Society, vol. 41(2), pages 259-282, May.
    3. Wright, Gavin, 1990. "The Origins of American Industrial Success, 1879-1940," American Economic Review, American Economic Association, vol. 80(4), pages 651-668, September.
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