34 G. S. CALLENDER 



on receipt of payment. The wealth and financial standing of 

 American houses increased to such an extent that they began 

 to establish their own agents in the manufacturing districts of 

 England and the continent for the purchase and shipment of 

 goods to America. They were able also to obtain credit with 

 the great Anglo-American houses in London or Liverpool, who 

 would then allow the agents to draw upon them at four months 

 to pay for the goods purchased and shipped to America. This 

 arrangement was also introduced into other branches of our 

 foreign trade, notably with India, China, and South America. 

 American merchants were allowed to pay for their cargoes 

 from those places by means of bills on London, which were 

 allowed to run until met by the export of American produce. 

 The system practically amounted to this : Englishmen bought 

 nearly all of our products for cash, sold their own to us on 

 credit, and in addition supplied us with letters of credit 

 against which we could draw in all parts of the world. The 

 effect of such an arrangement would obviously be to replace 

 American capital engaged in foreign trade by English capital 

 supplied by the great Anglo-American mercantile houses in 

 London and Liverpool or by the numerous joint stock banks 

 which eagerly discounted the paper of these houses. The 

 American capital thus liberated from trade became available 

 for carrying on the various improvements within the country. 

 The amount of capital thus lent to us on commercial account 

 may be estimated from the acceptances of these Anglo-Ameri- 

 can houses, which in 1836 were said to amount to $100,000,000. 

 If we add this to the amount invested in our securities of 

 various kinds, it is safe to say that nearly $300,000,000 of 

 foreign capital was lent to this country between 1815 and 

 1840. 



The American people were perfectly aware of the possi- 

 bility of securing foreign capital at this time. New York from 

 the first looked to this source to secure the funds necessary for 

 her canals; Ohio did likewise; and Louisiana and the city of 

 New Orleans, in the early twenties, were negotiating loans in 

 London. The success of these first loans encouraged others; 

 and after 1830 the whole country looked to England for 

 capital to carry out its system of internal improvements, just 



