ABSTRACT
Transition ‘from the world’s chief debtor to its largest creditor’ entailed such an increase in the importance of American methods and practices that the character of international investment was influenced almost more by New York than by the older and more conservative traditions of the City of London. The difference between America and Great Britain as international creditors has been related both to more or less fundamental dissimilarities in their financial systems, and to the different ways in which each has conducted the business of making foreign loans. Debtors can, in the end, only meet the service payments on their borrowings by selling goods or services to their creditors. New borrowing, especially by European countries, postponed readjustments in balances of debtors and creditors alike and disguised the essentially unstable character of the whole situation. The private American investor, as distinct from big international concern, has shown a marked preference for fixed-interest-bearing securities rather than for those whose yield is variable.
