A POSTWAR DECADE OF PRIVATE DIRECT INVESTMENT ABROAD
CAPITAL owned by citizens of the United States in foreign countries almost doubled in value during the first ten years following World War II. The total increased from $13,659 million at the beginning of 1946 to $26,129 million at the end of 1955. But for reasons already stated, expansion of the portfolio investment was far less striking than expansion of the direct investment. Portfolio holdings increased from $5,289 million to $6,944 million, hardly more than 31 per cent; direct investment increased from $8,370 million to $19,185 million, over 117 per cent. Most of the expansion in portfolio capital occurred in Canada and countries other than European and Latin American. Portfolio holdings in Europe actually shrank to the extent of $2 million during the decade and the portfolio expansion in Latin America amounted to only $65 million, while the expansion elsewhere -- mainly in Canada, Australia, and the Philippines -- increased by $1,592 million. Table 18 exhibits the growth of the long-term private investment of United States citizens abroad by countries and regions during this decade.
The analysis that follows is concerned solely with the direct investment, its expansion, its distribution, and the rates of return therefrom, with particular reference to Latin America and other underdeveloped regions. Canada and Europe will be considered only for purposes of comparison and contrast.
A little more than 30 per cent of the total private direct investment was in Canada at the beginning of 1946 and slightly more than 25 per cent in Europe. Latin America had nearly 36 per