This development toward a congestion of capital, though confidently anticipated both in the United States and in Europe, did not take place. About the end of the century an enormous extension of the general field for foreign investment raised interest rates all over the world. The demand for capital grew with astonishing rapidity. In part this was due to British, French and German foreign investments, but it was also the result of a quickened economic tempo in all countries. New industries were created, wages rose (though in most countries not so rapidly as prices) and the outlets for the supposed superfluous capital were greater than ever.
Especially in the United States was the development contrary to that which had been anticipated. Capital was not rendered idle because of any slackening in the nation's consuming capacity, for the men of average and small income were able to purchase more than ever before. The farmers alone, whose property increased in value from twenty and a half billions of dollars in 1900 to forty-one billions in 1910 (an increase of over 100 per cent. as compared with less than 28 per cent. in the previous decade) added stupendously to a new demand for goods of all sorts. Of automobiles, unknown in 1898, there are in 1916 almost three millions. Innumerable other industries arose and expanded; the anticipated arrest of accumulation did not occur.
The result of this economic development soon made itself apparent. We discovered, fortunately for us, that we were not at this time to become the work-shop of the world. We could not continue to produce articles cheaper than England or Germany, and undersell these countries in their home markets. We discovered that our own country still furnished an admirable field for investment. While our foreign commerce increased, it continued to form only a small part of our whole trade. So long as vast new opportunities for the investment of capital in the United States presented themselves, we ceased to worry about foreign or colonial outlets, and for every dollar of American money invested in Porto Rico and the Philippines, hundreds of dollars were invested in the states. Our capital though accumulating at an ever-increasing rate, did not equal the demand.[[5]]
In other words, the conditions in America did not yet warrant an imperialistic policy. We were economically younger than we had thought; more elastic, with greater capacity for internal growth. As a result of this discovery, our sudden enthusiasm for dominions beyond the seas died down. We were disgusted and bored by the Philippine war; we hated the rôle of oppressors, in which we unwillingly found ourselves. We hated the water cure, punitive expeditions, and the endless controversies over the status of Filipinos under American law. The anti-imperialistic elements in America, men whose interests did not lie in foreign trade and speculation, stolidly opposed the retention of the islands. Had the election of 1900 been fought upon this single issue it would probably have been won by the anti-imperialists. Even though we kept the islands, we set definite limitations to our imperialistic ventures. We secured for the Philippines an administration which prevented the exploitation of the natives and the importation of Chinese labour. We set our faces against any policy of sacrificing the interests of the indigenous population to the interests of American financiers. And to-day, could we do it with due regard to the interests of the Filipinos, we would retire from the archipelago.
As we look over this experiment, we cannot help recognising that it was a precocious, an unripe imperialism. For us it was too early to secure Asiatic islands; too early to worry about American investments in foreign lands. It was an imperialism carried out somnambulistically. Our taking the Philippines was an accident, unforeseen and undesired.[[6]] Our hope of being the work-shop and banking centre of the world, of being the heart of a great empire like that of Britain, and of doing all this within a short period, was a dream, which vanished with the new demands made upon American capital by an increasing economic expansion.
The truth is that this unripe imperialism did not represent the interests of the majority nor even of any considerable group of our capital owners. It was doomed to disappearance once the revival of American industry offered opportunities, not only for the ordinary capitalist, but for that more speculative investor, who in other countries clamours for imperialism. The experiment revealed, however, that the same forces which act upon capital in Europe act also upon capital in America, and that the United States, given the right conditions, is liable to the same ambitions as are imperialistic countries and is as likely to engage in war to satisfy these ambitions. The imperialistic trend acts upon all nations at a given stage in their economic development. It cannot be stopped by traditions of peacefulness or by mere protestations, however sincere. It is a part of the great economic strife, out of which devastating wars arise.
[[1]] "Early in the year 1901, a foreign ambassador at Washington remarked in the course of a conversation that, although he had been in America only a short time, he had seen two different countries, the United States before the war with Spain, and the United States since the war with Spain. This was a picturesque way of expressing the truth, now generally accepted, that the war of 1898 was a turning point in the history of the American republic."—"The United States as a World Power," by Archibald Gary Coolidge. New York, 1912.
[[2]] For a study of these strategic considerations see "The Interest of America in Sea Power, Present and Future," by Captain (later Rear-Admiral) A. T. Mahan, a series of articles written between 1890 and 1897. Boston, 1911.
[[3]] John A. Hobson, "Imperialism," p. 23. London, 1902.
[[4]] Op. cit., p. 83.