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Toward a Consistent Foreign Loan Policy

Published online by Cambridge University Press:  02 September 2013

Walter H. C. Laves
Walter H. C. Laves
Affiliation:
Hamilton College
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Extract

The Securities Act of 1933 marks the inauguration for the United States of what seems to be a consistent policy toward private loans to foreign governments. In view of the continued importance of such loans in our foreign relations, it appears appropriate to consider in some detail how the new policy differs from the old, and what its implications are likely to be.

It is unnecessary in this journal to discuss the individual cases of friction arising from private loans to foreign governments during the last fifty years. What concerns us, rather, is the cause of such friction.

Type
American Government and Politics
Information
American Political Science Review , Volume 28 , Issue 6 , December 1934 , pp. 1047 - 1052
Copyright
Copyright © American Political Science Association 1934

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References

1 Senator Hiram Johnson at one time proposed that “a Foreign Loan Board, consisting of the Secretary of State, the Secretary of Commerce, and the governor of the Federal Reserve Board, … should approve or disapprove of virtually all foreign loans.” Winslow, W. T., “The Securities Bill and Foreign Investments”, 236 No. Amer. Rev. (1933), 243–244Google Scholar.

2 In contemplating the establishment of such controls, we must not be misled by the unhappy experience of the United States in its relations with some of the defaulting governments of Central America and the Caribbean. The financial controls established in these countries in the past have been unsatisfactory in some cases because expert personnel for the administration of controls was lacking; in other cases because financial conditions in the debtor countries had been allowed to go too far before the controls were established; or again, failure was due to the lack of a clear-cut, well-understood policy by the United States, so that intervention came only at the insistence of the creditors, and was looked upon as evidence of an imperialistic policy.

3 Public Act No. 22, Seventy-third Congress (H. R. 5480).

4 N.Y. Times, Oct. 20 and 21, 1933.

5 Some aspects of this problem, as affecting both domestic and foreign securities, are discussed in Rodell, Fred, “Regulation of Securities by the Federal Trade Commission”, 43 Yale Law Jour., pp. 272–280CrossRefGoogle Scholar.

6 Pamphlet containing the address published by the Woodrow Wilson Foundation (New York, 1934).

7 Signed by the delegates to the Seventh International Conference of American States at Montevideo, December 26, 1933. Treaty Information Bulletin, No. 54, Mar., 1934, p. 33.

8 See my article, “National and International Control ef Foreign Investments,” in this Review, Aug., 1931.

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