The United States in international banking (American business abroad) by Siegfried Stern

PART ONE 
HISTORICAL SURVEY

I 
1914-1945 
THE UNITED STATES did not enter the field of international banking 
as a serious participant until 1914. Any study of the evolution of the 
American role in world finance, therefore, must necessarily proceed 
from the situation existing at the beginning of the First World War. 
Unlike the British financial pre-eminence which emerged out of the 
practice of centuries and slow development, the prominence of this na-

tion in the foreign financial sphere was largely the aftermath of a 
rather sudden and, on the whole, involuntary excursion into the area of 
overseas lending and exchange. This deviation, moreover, took place 
at a time when the country's banking system, only recently strength-

ened by the creation of the Federal Reserve organization, was still 
fully absorbed with the rapid expansion of the domestic economy. 
Inadequately prepared for the new task, United States foreign bank-

ing suffered from unavoidable improvisation until the banking ma-

chinery could be perfected for service in distant regions and could be 
better adapted for functioning under the upsetting conditions that 
marked the second quarter of the present century and subjected even 
more tested banking organisms to a severe strain. T o provide a back-

ground for the detailed description of American endeavor and per-

formance in the field of international monetary competition the fol-

lowing pages will sketch some of the chief developments since this 
country was first called upon to play a significant part in world finan-

cial pursuits. 
THE FIRST WORLD WAR, I914-I91 9 
During the thirty-odd years from 1914 to 1945 the whole structure 
of international banking underwent profound and in certain respects 
revolutionary alterations. For more than a century England, as the 
leading creditor nation, had been the world's banker. The money 
market of the City of London wielded a decisive influence in every 
financial center. The discount rate of the Bank of England and the

The United States in international banking (American business abroad) by Siegfried Stern