The New World Beckons: Schrobanco 1923–35

Abstract

‘From a financial market of hardly more than local importance, New York has developed, almost overnight, into an international financial centre of first rate magnitude,’ wrote the financial journalist Paul Einzig in 1931.¹ The vital factor behind this development was the First World War, which turned the United States into the largest international creditor nation, established the dollar as a leading international currency, made New York the principal centre for international capital raising and prompted the rapid rise of the dollar acceptance. Prior to 1900, public offerings of foreign securities were virtually unknown on Wall Street. The decade or so before the First World War saw a marked increase in such issues, principally for Latin American borrowers, but the pre-war peak of new issues for foreign borrowers in the New York market was only a sixth of London’s.² In 1916, however, foreign securities issues in the US set a new record and thereafter New York was the leading international financial centre for raising long-term capital.³ In the post-war years 1919-30, total issues of foreign securities in New York were roughly double those in London and it was on Wall Street that the greatest opportunities lay for firms that specialised in that activity.⁴