The author is affiliated with Wesleyan University, Middletown, Connecticut. He acknowledges valuable comments from seminars at Chicago, Princeton, and Wesleyan. The headquotations are from Oliver Chandos, Memoirs (London, 1962), p. 426, and Frederic Howe, Confessions of a Reformer (New York, 1925), p. 17.

¹ Since imperialism centrally involves profits from investment, particularly in raw materials to be shipped to the imperializing nation, 1929 represents a natural cutoff date. After 1929 U.S. tariff policy sharply restricted such imperialist profits; it cut real exports from Chile and Cuba to “about half the level” that would have' prevailed without restriction. See Birnberg, Thomas and Resnick, Stephen, Colonial Development, An Econometric Study (New Haven, 1975), pp. 234–35Google Scholar. Of the endless literature on imperialism, the wide ranging review by Zevin, Robert, “An Interpretation of American Imperialism” in this Journal, 32 (03 1972), 333–57Google Scholar, addresses some of the same points as Pt. Kemp, I. Tom, Theories of Imperialism (London, 1967)Google Scholar provides an example of how widely and fruitfully “Marxist” views can diverge. Two of the more lively readers to appear in recent years that go into political aspects far beyond our concern are Rhodes, Robert, ed., Imperialism and Underdevelopment: A Reader (New York and London, 1974)Google Scholar, and Fieldhouse, D. K., The Theory of Capitalist Imperialism (London, 1967)Google Scholar.

² See Appendix Table 1.

³ Varga, Eugen and Mendelsohn, L., New Data for V.I. Lenin's Imperialism (New York, 1940), p. 138Google Scholar.

⁴ Luxemburg, Rosa, The Accumulation of Capital (New Haven, 1951), p. 446Google Scholar. In response to criticism I am obligated to warn any unwary reader that agreement between Lenin and Luxemburg on this point does not imply their further agreement on imperialism, oh the multiplication table, or on anything else.

⁵ See Appendix Table 1.

⁶ See Appendix, section B.

⁷ Magdoff, Harry, The Age of Imperialism (New York and London, 1969), p. 13Google Scholar, has noted: “The search for unadulterated economic motives of foreign policy decision … will fail if one expects to find such for each and every act of political and military policy … [the latter policies] are not based on strict cost-accounting rules.”

⁸ The rate of return on American investments abroad, 1897–1914, was estimated at 6 3/4 percent by Paul Dickens, whereas Simon Kuznets's figure for the 1901–12 domestic stock and bond rate is 4.2 percent. See Dickens, Paul, The Transition Period in American International Financing: 1897 to 1914 (unpublished thesis, George Washington University, 1933), p. 271, andGoogle ScholarKuznets, Simon, Capital in the American Economy (New York, 1961), p. 287Google Scholar. With foreign investments in the period only 1 percent of the total, both the total and domestic rate would be 4.2 percent. If one were to use Matthew Simon's more recent estimate of 4.1 percent for U.S. portfolio investment in 1900, there would also be no increase at all. See , Simon in Conference on Research in Income and Wealth, Trends in the American Economy in the Nineteenth Century (New York, 1960), p. 697Google Scholar. By 1929 the small ratio of foreign to total investment yields a similarly small result in keeping up “the falling rate of profit.” Lewis, Cleona, America's Stake in International Investments (Washington, D.C., 1938)Google Scholar.

¹⁰ For agriculture, it did reach just over 1 percent by 1929. See Appendix Table 2. 11 See Appendix Table 3.

¹² , Lewis, America's Stake, p. 58Google Scholar, reports totals only for “the industrial minerals excluding oil” as a group. Her 1897 and 1908 totals in that category for Mexico and South America suggest a 1902 copper total perhaps one fourth of the par value as shown in Census, Mines and Quarries, 1902 (Washington, D.C., 1950), p. 471Google Scholar, for incorporated copper companies, or one fifth the sum of the two.

¹³ See Appendix Table 4.

¹⁴ , Lewis, America's Stake, p. 583Google Scholar; and 1902 Census, Mines, pp. 514–15. A capital allowance for the host of unincorporated gold and silver miners would push the 1902 figure well below 5 percent.

¹⁵ United Fruit originally relied on competition among native producers. In 1911, however, it decided that “tropical conditions and lack of respect for tropical contracts” made it “almost imperative” to raise the share of its banana shipments it grew from 35 percent to 80 percent. See , Edgerly and , Crocker, Special Letter, United Fruit Company (1915?)Google Scholar, Scudder Collection, Baker Library, Harvard University.

¹⁶ In 1902 the Louisiana sugar interests ridiculed “these gentlemen from Cuba who came here as mendicants begging for help.” As they observed, “when you destroy the Louisiana industry you will destroy more trade between the States than you will ever have from Cuba.” Moreover “the argument for free trade with Cuba to improve her sanitary condition would come with much more force as to New Orleans.” The latter's lack of sewage system and clean water supply perpetuated U.S. yellow fever epidemics. See Hon. H.C. Warmoth in 57th Cong., 1st Sess., H.R. 535, Reciprocity with Cuba (1902), pp. 286–87Google Scholar.

¹⁷ Senator Burrows of Michigan stopped the reciprocity treaty initially, relying on powerful support from the beet sugar interests. He found his backers disappearing after some of the leading beet sugar companies sold out to the Trust. See Orcutt, William D., Burrows of Michigan and the Republican Party, vol. 1 (New York, 1917), pp. 304–05Google Scholar. As suggested above the Trust did not gain by being able to charge a higher final price. Its move into the Cuban reciprocity argument came only after the treaty had been blocked by the beet sugar interests. The likely explanation of its move is that it foresaw the prospect of being limited by tariff laws to a U.S. supply, or (at best) U.S. domestic plus Hawaiian.

¹⁸ Herfindahl, Orris C., Copper Costs and Prices: 1870–1957 (Baltimore, 1959), pp. 80 ff., 203Google Scholar; Bunting, David, Statistical View of the Trusts (Westport, Conn., 1974)Google Scholar, Statistical Tables; Gates, William B., Michigan Copper and Boston Dollars (Cambridge, MA., 1951), pp. 218–19Google Scholar. These increases presumably reflected such firms capturing a greater share of the profits of the new electrical industries than competitive mining firms could have achieved.

¹⁹ Military Government of the Island of Cuba, Department of Agriculture, Commerce and Industries, Report, June 30, 1901, Civil Report of Brigadier General Leonard Wood, Military Governor of Cuba, vol. 12 (1901), p. 5. The Foraker Amendment against concessions during the occupation “did not stop the military government from … the grant of a ten-year monopoly to the Jai-Alai company which sought to introduce into Cuba a professional type of handball.” Foner, Philip S., The Spanish-Cuban-American War and the Birth of American Imperialism, 1895–1902, vol. 2 (New York, 1972), p. 470Google Scholar.

²⁰ Almost equally absurd, but unsuccessful, was the earlier attempt by the silver interests to establish Latin-American bimetallism via a State Department Conference. So was that of other U.S. producers to establish a free trade union with Latin America. These were forcefully attacked by Marti, Jose: Foner, Philip, ed., Inside the Monster (New York, 1975), pp. 329 ffGoogle Scholar.

²¹ See , Varga, New Data, p. 120Google Scholar.

²² Lenin quotes Hobson to the effect that “aggressive imperialism … [which] is of so little value to the manufacturer and trader … is a source of great gain to investor,” adding, “the income of the bondholders is five times greater than the income obtained from the foreign trade of the greatest ‘trading’ country in the world. This is the essence of imperialism and imperialist parasitism.” , Varga, New Data, p. 214Google Scholar. , Magdoff, The Age of Imperialism, p. 39Google Scholar, notes of the other recent revisions: “The oversimplification which identifies imperialism with colonialism pure and simple neither resembles Lenin's theory nor the facts of the case.”

²³ Jenks, Leland, Our Cuban Colony (New York, 1928), p. 136Google Scholar. Some recent writers, however, take the hopes expressed by journalists as more indicative than the Hobson-Lenin position. “As one author wrote in 1889: ‘To the United States, among the chief advantages of the liberation of Cuba will be a commercial one.’ These advantages were spelled out in terms of rich fields for investment and greatly expanded markets. American business interests began to discuss a reciprocity agreement as the best means of attaining both these goals.” Smith, Robert F., The United States and Cuba, Business and Diplomacy, 1917–1960 (New York, 1960), p. 22Google Scholar.

²⁴ Shaw, William H., Value of Product Since 1869 (New York, 1947), p. 174Google Scholar.

²⁵ Moreover, raising U.S. sugar prices would affect the Cubans little one way or the other. Any such increase only transferred income from American sugar consumers to American stockholders of the Trust. Had the Trust cut sugar consumption by raising its domestic prices, it eventually would have cut world and, perhaps, Cuban sugar demand output. That possible impact has never been mentioned as the gravamen of the attack on imperialism. Moreover, it seems the “second order of smalls.”

²⁶ , Jenks, Our Cuban Colony, pp. 138–39Google Scholar.

²⁷ Obviously the Cuban supply dropped sharply during the war. By 1902 it was rapidly returning to the pre-war level.

²⁸ According to James H. Post in 57th Cong., 1st Sess., H.R. 535, Reciprocity with Cuba (1902), p. 348Google Scholar, the Trust bought 60 percent of raw sugar and competed with nine refiners. Havemeyer owned much of the “independent” National Sugar Refining Company, however, so we reduce nine to eight and estimate it bought over 60 percent. (See 62nd Cong., 2nd Sess., H.R. 331, American Sugar Refining Company and Others, pp. 13–16, 28.) Moody, John, The Truth About the Trusts (New York, 1904), p. 65Google Scholar, quotes Willett & Gray at 47 percent for 1902. Nutter, G. Warren, The Extent of Enterprise Monopoly in the United States, 1899–1939 (Chicago, 1951), p. 313Google Scholar, refers to other sources as well. Had the altercations between Havemeyer, Arbuckle, and Spreckles been less intense, the Trust could have led a buyers' cartel. Even then the Trust's jockeying with the beet sugar producers might have precluded the others trusting their leadership.

²⁹ Eventually more Cuban land was brought into production, tending to depress the world price, and thereby diminishing the value of the Treasury gift. The value of the gift had not been fixed forever and ever, world without end.

³⁰ Quoted by , Jenks, Our Cuban Colony, p. 133Google Scholar. The underlying strategic considerations seem no different from, nor better thought through than, those apparently operative in planning the second Cuban invasion, the Bay of Pigs.

³¹ U.S. Tariff Commission, Reciprocity and Commercial Treaties (Washington, D.C., 1919), p. 329–30Google Scholar.

³² Some contemporary attacks on the Trust in fact argued that it opposed reciprocity. By buying' into the beet sugar companies in 1901–1902, “The Havemeyer conspirators had one supreme idea in view. The granting of a 30 percent reduction in customs duties to Cuba had warned them that the high tariff was in danger. With the beet sugar refineries in their control they could raise the cry that lower duties on sugar would threaten a struggling native industry and strike at American beet sugar farmers. Thus they could fix prices in the East and West and gradually destroy their competitors.” James Creelman, “The Plot Against Cheap Sugar,” Pearson's Magazine; quoted in The Congressional Record, U.S. Senate, August 25, 1913, pp. 3716–18. The article begins, “It is only a few weeks ago since Dr. Wiley, the burly hero of the fight for pure and honest food in America … declared that the real prosperity of a people should be judged largely by the average quantity of sugar they consumed.”

³³ The prices of machinery and railroads specialized to the production of sugar would also have risen.

³⁴ Reciprocity With Cuba, p. 61.

³⁵ Reciprocity With Cuba, pp. 8, 9 and 11. In 1901 the United Fruit Company owned 72,336 acres of Cuban land. United Fruit Company, Annual Report, 1901, p. 16Google Scholar. Its acreage in sugar was under 10 percent of Cuban sugar land. According to the 1899 Census, about 470,000 acres were in sugar-slightly less than the amount in 1894, and not much different from the 1902 total. See Quesada, Gonzalo de, Cuba, International Bureau of American Republics (Washington, D.C., 1905), pp. 75, 77Google Scholar. Quesada was Cuban Minister to the United States.

³⁶ Reciprocity With Cuba, p. 445.

³⁷ , Bliss, in Reciprocity with Cuba, p. 397Google Scholar. “You understand that the prorogration of the mortgage law, beginning in 1899, prevented a great deal of property from changing hands that would otherwise undoubtedly have changed hands then.”

³⁸ Professor Julian Alienes has estimated that 93 percent of sugar production in 1895 was in the hands of Cuban families and Spanish families with permanent residence. And Herminio Partell Vila, a Cuban historian, concluded that after the war and revolution “the sons of the land still possessed the greater part of the land.” See Grupo Cubano de Investigaciones Economicas, A Study on Cuba (Coral Gables, FL, 1965), p. 185Google ScholarPubMed.

³⁹ Doctor Marroquin noted “The profound disturbance of the public order which began in 1899, prevented the fulfillment of the laws in regards to elections…,” and referred to the “disorder in which, on account of the last revolution, the public administration of all branches have been thrown for the last three years.” He concluded that although “fighting was almost over toward the end of November last [that is, 1902], nevertheless, public order was not on that account restored….” 58th Congress, 2nd. Sess., S.D. 51, Correspondence Concerning… Interoceanic Canal Across the Isthmus of Panama (Washington, D.C., 1903), p. 40Google Scholar.

⁴⁰ Beaupre, the American Consul, was informed by the agent of the Panama Canal Company that he had been notified that the treaty would be ratified only if two amendments were made: one, providing for an additional payment of $10 million by the company to Colombia, and two, provision of an additional $5 million by the United States. Hill, Howard C., Roosevelt and the Caribbean (Chicago, 1927), p. 50Google Scholar.

⁴¹ In a memorandum to the American consul which the latter was “at liberty to make discreet use of.” 58th Cong., Correspondence Concerning… Interoceanic Canal, p. 40.

⁴² Quoted by Arias, Harmodio, The Panama Canal (London, 1911), p. 63Google Scholar.

⁴³ The engineer, J.T. Ford, was consulting engineer to the Colombian government and manager of the Cartegena Harbor, Railway and River Companies. 58th Cong., Correspondence Concerning … Interoceanic Canal, pp. 41, 43.

⁴⁴ The point was clearly recognized by a contemporary anti-imperialist: see , Arias, Panama Canal, p. 54Google Scholar.

⁴⁵ This accounting of expenditures does not seek to estimate the market value of the asset as of 1929. Its value as a military asset was surely central to any valuation. That value was then unclear: future net revenues were negative, and the probability of loss (during World War II) or “return” to Panama thereafter was more than trivial.

⁴⁶ The Colombian government owned 50,000 of the company's 650,000 shares as of February 1903. See U.S. Congress, The Story of Panama, The Hearings of the Rainey Resolution before the Committee on Foreign Affairs of the House of Representatives, Jan. 25 and Feb. 9, 1912 (Washington, D.C., 1912), p. 620Google ScholarPubMed.

⁴⁷ Moore, John B., A Digest of International Law, vol. 3 (Washington, D.C., 1912), pp. 220Google Scholar. Various Congressmen proposed legislation to give American shippers preference, but their bills failed.

⁴⁸ The dynamic effects that arose from cheapening coast-to-coast transport are probably of greater interest and importance, but have not been studied closely. Fitting the counterfactual model would require disentangling the other influences that also tended to push rates down over time.

⁴⁹ 58th Cong., Correspondence Concerning… Interoceanic Canal, p. 41. Despite the later history of the Suez Canal some naval aficionados as late as 1977 (when the new treaty with Panama on the Canal was under discussion) still set an extreme value on “keeping the canal.” That fact suggests that its control offered considerable satisfactions to the Maginot mentality of their military predecessors.

⁵⁰ “We are a sort of pure air blowing in world politics We have done some (things) that are remarkable, that will bear looking into; but that is not a finished story and we won't discuss it.… I daresay it will all work out in the end.” Woodrow Wilson, speech on “Patriotism,” January 28, 1904, in Link, Arthur S., ed., The Papers of Woodrow Wilson, vol. 15 (Princeton, 1972), p. 143Google Scholar. See vol. 14, pp. 419, 454, 491 for versions of the speech back to April 1903.

⁵¹ The theoretical literature on impact of trade is, of course, extensive.

⁵² Kindleberger, Charles, Power and Money, the Economics of International Politics and the Politics of International Economics (New York, 1970), pp. 76–77Google Scholar.

⁵³ Jenks, Our Cuban Colony; Rippy, J. Fred, The Capitalists and Colombia (New York, 1931)Google Scholar; Kepner, Charles D. Jr, and Soothill, J. Henry, The Banana Empire (New York, 1935)Google Scholar; Marsh, Margaret, The Bankers in Bolivia (New York, 1928)Google Scholar; Knight, Melvin, The Americans in Santo Domingo (New York, 1928)Google Scholar.

⁵⁴ Fundamentals of Political Economy Writing Group, Shanghai, in Wang, George C., ed., Fundamentals of Political Economy (White Plains, N.Y., 1977), p. 173Google Scholar.

⁵⁵ Nkrumah, Kwame, Towards Colonial Freedom (London, 1962), p. 38Google Scholar.

⁵⁶ Aronowitz, Stanley, False Promises (New York, 1973), pp. 184, 139Google Scholar.

⁵⁷ Reciprocity with Cuba, p. 445.

⁵⁸ Representative Parker of New Jersey posed the antithesis. Other statements appear in Weston, Rubin, Racism in United States Imperialism (Columbia, SC., 1972), pp. 166, 720Google Scholar.

⁵⁹ Gonzalo de Quesada, Cuba (Washington, D.C., 1905), p. 262.

⁶⁰ , Jenks, Our Cuban Colony, p. 133Google Scholar.

⁶¹ , Wood, Report, vol. 12, Table 33Google ScholarPubMed.

⁶² Reciprocity with Cuba, p. 398. Farm and common labor would have competed in similar labor markets, but no detailed study presenting comparative data on wage and real wage change is referred to in the anti-imperialist literature. One may note the contemporary report by Victor Clark: “The general standard of living is rising in Cuba. Nominal wages are not increasing but then purchasing power is greater.” Clark, Victor, Labor Unions in Cuba, Bull. 41, U.S. Department of Labor (1902), p. 747Google Scholar. , Quesada, Cuba, p. 261Google Scholar, reports that in 1903 plantation cane lifters earned $23 a month; cutters, $25-both plus maintenance.

⁶³ See “Some concern was expressed by P. A. Staples … because any close investigation would reveal that workers in Cuba (in 1929) were paid low wages and worked 12 hours a day.“Smith, Robert F., The United States and Cuba, Business and Diplomacy, 1971–1960 (New York, 1960), p. 63Google Scholar. For a more thoughtful and pungent exposition of this view with respect to Cuba, see Foner, The Spanish-Cuban-American War, ch. 22.

⁶⁴ , Rippy, The Capitalists, pp. 190–91Google Scholar. He notes that payment per bunch of bananas handled or area of land cleared means that workers migrate from one banana plantation to another… it also means that native planters and the United Fruit Company escape direct responsibility for medical attention, etc.” Ibid., p. 181.

⁶⁵ Ibid., p. 182.

⁶⁶ Kepner, Charles Jr, Social Aspects of the Banana Industry (New York, 1936), p. 129Google Scholar.

⁶⁷ , Knight, Americans in Santo Domingo, p. 143Google Scholar.

⁶⁸ Ibid., p. 1S8. Knight continues: “This alien and undesired element is about a tenth of the population of the country. The American Minister [Russell] compared these people favorably with the Dominicans as workers, doubted if they were more diseased, and remarked that they were necessary during the sugar season. Minister Russell's departure was an occasion of quiet but sincere rejoicing… his years of residence failed to bring him into sympathy with the Dominican point of view.” Ibid.

⁶⁹ Ibid. Knight concludes his discussion of labor stating: “These Haitians speak a dialect made up of a few hundred words originally French, but not oftentimes unrecognizable as such, and a grammar simplified beyond belief. They are picturesque enough, but so are Chinese coolies. This annual invasion, much of which evades the law and remains, brings along its women, its voodoo drums with their sacred tufts of goats' hair and its wanga or magic of horses' skulls, toasted corn, pig-fat, and no white knows what all. Aside from a small ‘elite,’ which gets its culture direct from France and remains apart, Haiti is African,” Ibid., p. 159.

⁷⁰ , Marsh, Bankers in Bolivia, p. 42Google Scholar.

⁷¹ , Jenks, Our Cuban Colony, p. 301Google Scholar.

⁷² , Kepner, Social Aspects of the Banana Industry, p. 70Google Scholar.

⁷³ Ibid., pp. 70–71.

⁷⁴ In 1884, “Costa Rica granted …Keith … 800,000 acres of uncultivated public land together with the natural wealth upon them.… Relatively little land came under the control of the United Fruit Company as a result of this concession.” The right to half these lands was turned over to a land agency “which eventually secured title to about 75,000 acres….” Ibid., p. 71. Most of the Costa Rican land was not utilized.

⁷⁵ “Guatemala has granted unused national lands by railroad concessions … (but) the practice has been discontinued, presumably because of… the nation's… failure to benefit as much as expected … and of the company's annoyance due to conflicting claims of private parties to many parcels of these lands.” Ibid., p. 76–77.

⁷⁶ In Costa Rica, rights to land were sold by municipalities. These were bought by “two groups of people, besides bona fide homesteaders…. The first were the speculators… who, although not cornering the market, nevertheless could name their price for these paper rights. The second were officials and intermediaries of the United Fruit Company, who … obtained some of the finest areas of potential banana land….” Ibid., p. 79. Presumably the implication of this statement is that United Fruit paid the same price as native speculators, and that both were “naming” too low a price.

⁷⁷ “Through intermediaries the United Fruit Company was able to buy coveted alternate lots in Honduras, which the government of that country had planned to keep from falling into foreign monopolistic control,” Ibid., p. 84. See p. 79 also.

⁷⁸ Ibid., p. 84. Kepner precedes this discussion with the totally inconsistent statement: “The powerful company uses it influence to buy land on.its own terms.” If it can name its own terms, why go through an intermediary? The issue here is whether the company paid below market price to landowners. One can ask a quite different question: Did the companies seek to evade government regulations forbidding the purchase of “alternate lots”? Kepner asserts that it did (n. 77 supra).

⁷⁹ Kepner faults the company for willingly offering “too high” a price for land. “Attorney Victor Guardia Quiros, San Jose, Costa Rica, wrote that hardly had Lindo [a Costa Rican] come to an understanding with the Atlantic Fruit Co. [on a price for his land] when the United [Fruit Company] ‘contrived, to seduce Lindo, buying his properties for a thousand dollars a hectare’ (a price four times greater than the usual price).” Ibid., p. 83n.

⁸⁰ , Rippy, The Capitalists, p. 182Google Scholar.

⁸¹ Railways constituted the largest component of direct foreign investment in 1897. Moreover, much investment in sugar and banana plantations involved railway construction.

⁸² The phrase is Sir James McAdam's and is quoted by Hallsworth, H. M., “The Future of Rail Transport,” The Economic Journal, 44 (12 1934), p. 537Google Scholar. According to Cumberland, Charles, Mexico, The Struggle for Modernity (New York, 1968), pp. 158–59Google Scholar, Mexican government agents complained that “Landlords asked exorbitant prices for the land … refused builders access to rock deposits … allowed their stock to roam over roads under construction” despite demand for better roads.

⁸³ Gowen, Herbert, An Outline History of China, Part III (Boston, 1913), p. 148Google Scholar, and Staley, Eugene, War and the Private Investor (Garden City, NY, 1935), p. 399Google Scholar.

⁸⁴ Bryan fought in two senses: first as a Colonel in the 3rd Nebraska Volunteers in Cuba, and then summoning the Democratic senators and directing them to vote for the Treaty of Paris. Bryan apparently feared that the Spanish Navy (then in a shambles) might reconquer the Philippines unless. we took over under the Treaty. Coletta, Paolo, William Jennings Bryan (Lincoln, Nebraska, 1964), pp. 233–34Google Scholar. There are other explanations. See Dunn, Arthur, From Harrison to Harding (New York, 1922), p. 283Google Scholar.

⁸⁵ Quoted by Frank, Andre Gunder, Lumpenbourgeoisie: Lumpendevelopment (New York, 1972), p. 70Google Scholar, from a 1912 study of Chile. The writer quoted, Francisco Encina, described this “pathological state” as developing from an earlier period in which these commercial opportunities were “exclusively in the hands of nationals.” His attack, as has been noted, is at least as vigorous against fellow countrymen for making it possible for foreigners to take this increasing role. Their national spirit had been eroded by foreign books, improved modes of travel, foreign merchandise. Cf. Encina, Francisco, Nuestra inferioridad economka (Santiago, 1955), pp. 15, 211Google Scholar.

⁸⁶ An anticolonial historian has written: prior to 1848 there were no private banks in Mexico, and those who lent money “did so at such fantastic rates of interest that they could not be used as sources for the heavy and long-term investments necessary for mining. Foreign money, then constituted the only ready source of capital for development”; Cumberland, Charles C., Mexico, the Struggle for Modernity (New York, 1968), p. 155Google Scholar. Annual interest rates for Cuban sugar planters in the 1880s exceeded 12 percent, the U.S. Consul reported rates “as high as 18, and in one case 30 percent”; see Grupo Cubano de Investigaciones Economicas, A Study on Cuba (Coral Gables, FL, 1965), p. 93Google Scholar.

⁸⁷ In 1900, U.S. bonds were floated at 2 percent, and actually sold above par. Consols had been cut to 2 1/2 percent in 1903. Conant, Charles A., “The Refunding Law in Operation,” The American Monthly Review of Reviews (06 1900), p. 711Google Scholar.

⁸⁸ , Lewis, America's Stake, pp. 237–38Google Scholar.

⁸⁹ Pazos, Felipe, “the Role of International Movements of Private Capital in Promoting Development,” in Adler, John H., ed., Capital Movements'and Economic Development (New York, 1967), p. 196Google Scholar. He adds: “Direct foreign investment promotes development for the country, but not of the country or by the country.” See also Carlos Diaz Alejandro in Kindleberger, Charles P., ed., The International Corporation (Cambridge, 1970), pp. 330–31Google Scholar. Helio Jaguaribe has said, “mere economic development … if it is not accompanied by increasing national command over conditions, results ultimately in benefiting some other country and leads to the final dissolution of the nation that is being developed.” Quoted by Packenham, Robert, “Latin American Dependency Theories: Strengths and Weaknesses,” unpublished manuscript (11 1973)Google Scholar.

⁹⁰ Melvin Reder contends that economies of scale in bribery had given foreign investors an advantage over native investors. See his “An Economic Theory of Imperialism,” in David, Paul A. and Reder, M. W., eds., Nations and Households in Economic Growth, Essays in Honor of Moses Abram-owitz (New York, 1974), p. 161Google Scholar.

⁹¹ The primary focus of this paper is on the impact of U.S. foreign investment on factor returns in “imperialized” nations. We attempt no net judgment on such impacts. But anyone who knows how to add up X gold stars for increasing workers incomes, and Y black marks for frustrating native capitalists-or vice versa-is free to do so. No more do we attempt any overall judgment on political consequences. Smedley Butler unrepentant, and then repentant, created xenophobia in Latin America, and radicalism in the United States. Capitalists might feel such results are too great a price to pay in order to keep the rate of profit on capital from falling by.001 percent. Believers in the “contradictions of capitalism” might even conclude that what's good for United Fruit (or GM or CBS) is not necessarily good for U.S. capitalism.