Vance Archive   |   Trotskyist Writers Index  |   ETOL Main Page

T.N. Vance

Features of U.S. Imperialism

(May 1941)

From The New International, Vol. 7 No. 4, May 1941, pp. 73–76.
Written by T.N Vance under the name “Frank Demby”
Transcribed & marked up by Damon Maxwell for the Encyclopaedia of Trotskyism On-Line (ETOL).
Proofread by Einde O’Callaghan (December 2012).

EVER SINCE THE UNITED STATES became a creditor nation in 1917, the specific weight of American imperialism in world affairs has steadily grown. The maturation of American capitalism during the decade of the 1920’s brought about significant structural developments within its anatomy. These developments have greatly influenced the growth of American imperialism and its influence on the course of world history. Nowhere is this more strikingly illustrated than in the present situation, which clearly centers around the war. It is with the hope of throwing some light on this key problem that this examination of the internal structure of the American bourgeoisie and its foreign investments is undertaken.

The fact that the capitalist class in a particular country is far from homogeneous is certainly not a new discovery. It goes back at least as far as Marx and was clearly understood and amplified by Lenin in his study of modern finance capitalist imperialism. Nevertheless, there has been a tendency within the Marxian movement (and, it goes without saying, amongst the bourgeois economists and historians) to minimize and even to overlook the importance of the various groupings within the bourgeoisie (determined essentially by the form and location of their capital accumulations – such as finance, banking, industrial, commercial and agricultural) and to treat the various national bourgeoisies as more or less homogeneous wholes.

In this fashion, half-truths are paraded as the last word in realistic analysis. The democratic bourgeoisies are interested in preserving their empires. The fascist bourgeoisies are interested in acquiring these empires. Everything becomes very simple – indeed, too simple. For, in spite of all the nationalistic propaganda that they and their agents have spewed forth, the modern (twentieth century) bourgeoisie is the most internationally-minded class that history has yet produced.

It is necessary to begin first with a brief presentation of economic data concerning American foreign investments, for these exports of surplus capital are most important in establishing the framework within which American imperialism must operate during the coming period.

“Prior to the present century American investments abroad were comparatively small. An estimate by Nathaniel T. Bacon placed American investments abroad in 1900 at $500,000,000 ... Charles F. Speare placed American investments abroad in 1909 at $2,020,000,000 and John B. Osborne estimated them at $1,902,500,000 for 1912.” (Moody’s 1940 Manual of Investments). Thus, even before World War I, American capitalism was casting about for a more profitable outlet for its surplus capital accumulations. The war of 1914–1918 greatly accelerated the process. In the decade from 1912–1922, American foreign investments increased 300 per cent. Moreover, in the course of this phenomenal increase, a profound change took place in the structure of American imperialism – a change which was a direct result of the war. From a debtor nation ever since its origin, the United States became in 1917 a creditor nation.

Growth of American Investments

During the period of the First World War most of the financial interests of American imperialism, consisting of financial loans, trade and investments, were in Europe, and most of these were in England. But in the course of the subsequent two decades, many changes have taken place in the foreign investment position of American capital. While different sources give different estimates of the amounts invested abroad, the most official figures available are those of the Department of Commerce. These show a steady rise until 1931, as follows (these figures are based on conditions existing on January 1 of the given year):
























This decade, in other words, represents the heyday of American imperialism. Foreign investments increased almost 100 per cent and reached the huge absolute figure of more than 15 billion dollars (some estimates place it as high as 18 billions). Interest payments and dividends on these investments annually ran to more than a billion dollars, a substantial item in the international balance of payments. The American octopus had extended its tentacles over virtually the entire globe. In so doing, it had produced some important qualitative changes. Investments in Europe remained more or less the same. The big increase occurred in the Western Hemisphere.

A survey made by Fortune in July 1931 gives the following figures for the year 1929-1930:





Western Hemisphere


(Latin America – $5,500,000,000)
(Canada – $3,850,000,000)

Far East


(Asia – $900,000,000)
(Australia – $400,000,000)





Note well that investments in Latin America now exceeded those in Europe. Important as this change is, its full significance only becomes apparent during the decline of about $4,000,000,000 that took place in American foreign investments during the decade of the 1930’s. From the beginning of 1931, the decline is steady, most of it being recorded in the first six years of this decade. The Department of Commerce (July 1940) records a total foreign investment of American capital at the end of 1939 of $11,365,000,000.

If one compares the proportionate amounts invested in different geographical areas in 1929 and in 1939, then the changes are quite striking:


Percentage of
total investment

Percentage of
total investment

(Amount 1939)





Western Hemisphere




Far East and Africa




The fact which emerges as predominant is that 70 per cent of America’s foreign investments are in the Western Hemisphere, as World War II confronts American imperialism with even more decisive questions than did World War I. Moreover, the decline in the absolute amount of capital invested in Europe (which is more than 50 per cent during the last decade) has undoubtedly been accelerated during the past year as the Nazis have attempted to put their grossraumwirtschaft into operation in Europe.

Banking Capital Asserts Itself

In the case of World War I, American investments were largely in Europe. In the case of World War II, American investments are overwhelmingly in the Western Hemisphere. World War I saw America emerge as the dominant imperialist power of the world; almost, but not quite, “master of the world,” as Mr. Thomas W. Lament of the House of Morgan had hoped. During the decade of the 1920’s, American imperialism put Europe on rations and extended its sway through-out the world, especially in the Western Hemisphere. The decade of the 1930’s saw American imperialism enter into the period of decline that has characterized world capitalism as a whole since 1914, and many readjustments were forced upon it both internally and externally. Not the least of these was the necessity of relinquishing the attempt to reduce Europe to the status of a colonial dependency of the United States. The Western Hemisphere was found to be a more profitable and safer field for exploitation than Europe. Here, in reality, lies the origin of Roosevelt’s “Good Neighbor” policy and the imperative necessity for the Act of Havana. The position of American imperialism vis-à-vis World War II is clearly not quite the same as was its relation to World War I.

American capitalism entered the highest stage of its development – the imperialist stage – during the last years of the nineteenth century. Two events, among many, signalled the emergence of the brash youth from its precocious adolescence into the estate of manhood amongst the capitalist nations of the world. They were the Spanish-American War and the formation of the gigantic billion dollar monopoly, the United States Steel Corporation in 1901. The first event served notice on all competitors that American imperialism could not be ignored in any distribution or redistribution of the world’s markets, colonies or spheres of influence. The second event served to emphasize and to punctuate the importance of the first. When the canny Scot, Andrew Carnegie, sold his industrial properties to the successful banker, J.P. Morgan, the process of merging banking capital with industrial capital came to a climax and then continued on a grand scale. American imperialism throughout the twentieth century is thus characterized by the domination of finance capital.

The fusion of banking capital with industrial capital to form finance capital does not disclose the same story in each case. On the contrary, two major trends can be noted in the United States. The more classic case is that of banking capital, through its role as promoter, invading the field of industry. Occasionally by outright purchase, but more often by various forms of intimidation and pressure, it secured control of various industries. The outstanding example of this method is, of course, the Morgan interests. The National Resources Committee in its study of The Structure of American Economy (1939) estimates that there are eight large interest groups. Of these, what is called the Morgan-First National group is by far the largest. Corporations directly controlled by this group possess assets of more than $30,000,000,000.

The other major method by which finance capital evolves is best exemplified by the Rockefeller interest group. Capital is originally accumulated in the field of industry or mining (in this case, oil). It expands until the pressure of accumulated surplus reserves and the struggle for survival and domination force it to acquire control of banking capital. In 1930, for example, the Rockefellers bought into the Chase National Bank and, through the help of the Banking Act of 1933, established Mr. Rockefeller’s son-in-law, Winthrop W. Aldrich, as chairman of the Board of Directors. The Board of Directors was pruned and reorganized with the object of forcing the Morgan men out. Today, the Chase National Bank, with total assets of three and one-half billion dollars, is the largest bank in the world and is clearly a Rockefeller-controlled institution.

The total assets of the 50 largest banks in the country plus the 200 largest non-financial corporations are approximately $100,000,000,000, or almost one-half of the total national wealth. The eight finance capital groups, Morgan-First National, Rockefeller, Kuhn-Loeb, Mellon, Chicago, DuPont, Cleveland, and Boston, control 62 per cent of the assets of this list of the principal 250 corporations. In a very measurable sense, therefore, finance capital controls the United States.

The Morgan-Rockefeller Groups

Within these eight major interest groups, the two most important, especially from the point of view of their ability to influence domestic and foreign policy, are the Morgan and Rockefeller groups. The other six groups generally occupy a position subordinate to the two main groups. Moreover, the Morgan and Rockefeller groups were the first to appear on the historical scene as important molders of policy. To a large extent the history of the United States during the first part of its finance imperialist phase (1890–1917) is a history of the conflicts between these two groups. Following World War I, however, during the phenomenal expansion of American imperialism in the 1920’s, many changes took place within the anatomy of American imperialism. These left their mark on the Morgan and Rockefeller groups.

The fairly sharply defined Morgan and Rockefeller groups have given way, as a result of a maze of interlocking directorates formed under relentless pressure by the requirements of monopolistic competition, to loose, informal groupings of “friendly enemies.” Both the Morgan and Rockefeller families have declined tremendously in importance. The dominant figures in both groups are chiefly successful business men who have demonstrated by their ability and success their right to positions of leadership within the American bourgeoisie. Changes are made as often as circumstances require within this leadership. That which gives these groups continuity is their more or less respectively similar interests plus the perpetuation of the Morgan name in close association with one group and the Rockefeller name with the other. The original antagonisms between the Morgan group and the Rockefeller group, based on the conflict between finance capital and industrial capital, have not been completely obliterated. They still remain latent and, on occasion, burst into the open. Both groups, today, are full-fledged finance capital groups. But, because of the nature of their origins, their investments are not identical. The Rockefeller group, wherever a conflict arises between industrial capital and finance capital, is inclined towards the industrial capital position. The Morgan group, however, even though its industrial interests are larger than its banking interests, is both in origin and outlook a banking group. Hence, whenever a conflict arises between industrial capital and finance capital, as more genuine finance capitalists, the Morgans incline towards the banker’s point of view.

Labor policy, price policy, the New Deal and domestic politics, as well as foreign policy, have, on occasion, served as battlegrounds between the two groups. The Rockefellers and their allies have been much firmer in their insistence on an open shop policy than the Morgans. They have pursued a much more rigid, inflexible price policy than the latter. They have been openly anti-New Deal, whereas the Morgans have varied in their attitude, at times being quite friendly to the Roosevelt Administration. The Rockefellers have concentrated more and more on the Republican Party, while the Morgans have continued their interest in both political machines. Finally, the original appeasement sentiment in this country (after the outbreak of the war) was pretty much concentrated in the Rockefeller group.

If one considers solely American direct investments abroad (this type of capital investment is the more stable and, other things being equal, will more likely influence policy than portfolio or short-term investments), the reason for the cleavage on foreign policy between the two major groups within the American capitalist class that ran from the outbreak of World War II until almost the date of the 1940 election appears to be quite clear. At the end of 1936 (whatever shifts have taken place since are relatively minor and can only serve to reinforce the general picture which I am presenting), 72 per cent of American direct investments were in the Western Hemisphere, 18 per cent were in Europe, and the remaining 10 per cent were largely in the Far East. Manufacturing, public utilities and transportation investments are chiefly Morgan. Petroleum, mining and smelting are chiefly Rockefeller. An analysis of the location of these different types of investments reveals that the bulk of the investments in Europe are Morgan-controlled; the bulk of the investments in the Far East are Rockefeller-controlled. Both groups have very important in-vestments in the Western Hemisphere.

From what I have said above, the following conclusions seem to be indicated:

  1. The most successful policy that American imperialism can pursue is one that will secure the maximum agreement within the American bourgeoisie. So far as foreign investments are concerned, this means that the cornerstone of American policy must be the protection of the 70 per cent of American investments in the Western Hemisphere. For it is here that all groups of American imperialists have important interests. The alliance with Canada, the Act of Havana, the creation of the Pan-American Bank, the granting of a $500,000,000 capital to the Export-Import Bank for loans to Latin America, the military plans for Hemisphere “Defense,” these are virtually the only items in American foreign policy today that have the unanimous approval of all sections of the American bourgeoisie.
  2. While all American imperialists are interested in the Western Hemisphere, some are not particularly interested in Europe or the fate of England. Others are. The House of Morgan, for example, is vitally interested in defending England. More is involved here than the simple fact that the Morgans have considerable investments in England. England (the City of London) has been the world center of international trade, the focal point from which finance capital throughout the world operates. If England goes under, not only do the Morgans lose considerably in wealth, power and prestige, but world finance imperialism will be considerably shaken. If it lies within the power of Morgan and those financial interests allied with him, history will repeat itself. America will enter World War II for the same laudable purpose as last time – to protect American trade with and investments in England.
  3. Some American imperialists are more worried about the threat offered by Japanese imperialism than that offered by German imperialism. They are not only the ones who have the chief stake in the Far East, but who, above all, see in the Far East a great potential sphere of interest. This vast market, embracing almost one-half of the world’s population, possesses unlimited opportunities for capital investment, securing raw materials, and for trade. It is in the Far East that the destiny of American imperialism lies, in their opinion.
  4. These difference within the ranks of American imperialists, plus the course of the war to date, have forced the Roosevelt Administration to operate on the basis of the least common denominator between the two major groupings of American imperialists – Hemisphere “Defense.” The immediate purpose of an army of 4,000,000 American conscripts is likely to be as an army of occupation throughout the strategic points of the Western Hemisphere.
  5. The aim of American imperialism in this war must be complete mastery of the world. Or, in the words of Wendell Willkie, a Morgan man if there ever was one in American politics: “After this war, the capital of the world will either be in Berlin or in Washington.” But there are still some differences of opinion within the bourgeoisie on how this program of world domination is to be accomplished.

The War and Group Unity

The continued resistance of England, which gives currency to the forecasts of a type of Napoleonic war, has strengthened the Morgan hand. Their task now is to involve the United States in the war in a military manner as quickly as feasible. To do this, they must, if possible, cement their agreements with the Rockefellers. The government, therefore, must increasingly represent, for the bourgeoisie, a regime of national unity. Roosevelt has already taken the first steps in this direction. His appointments of Stimson and Knox, two Republicans, to the key cabinet positions of War and Navy, were more than a clever election maneuver. It was the first step in the direction of a government of national unity. The personnel of the National “Defense” setup is steadily broadened out to embrace all sections of finance capital. Aside from Stettinius, with his Morgan link, and Knudsen, with his Morgan-DuPont link, one of the most significant of recent appointees has been that of Nelson Rockefeller to the position of Coordinator of Cultural Relations with Latin America.

In general, the crisis of capitalism requires more and more constant intervention on the part of the capitalist state in the affairs of business. This is what Lenin called the domestic counterpart of modern finance imperialism – the development of state monopoly capitalism. An additional reason for the hastening of this process is that an immediate solution, in view of the war situation, for these internecine conflicts within the bourgeoisie is required – and only the capitalist state can solve them.

Along with this growing unification of the capitalist class within the capitalist state will come the hammering out of a clearly defined policy of action for American imperialism, both in regard to domestic affairs and foreign policy. Its out-lines have already been clearly indicated by Roosevelt during the past year. Price policy is to be dictated by the capitalist state in the interests of the entire capitalist class – witness the establishment of a price ceiling in steel. Prices are no longer to be subject to the vagaries of the market, as influenced by the necessities of fratricidal warfare amongst the capitalists. Profits will not be ignored. Far from it. They will now be guaranteed by the capitalist state at a higher level than the capitalists could hope to maintain by themselves in “normal” times. Along with and as a result of this tendency small business will be completely wiped out. The American industrial structure will be streamlined along the lines of 100 per cent monopoly. Since time does not permit, those industrialists who insist on the patriotic necessity of crushing labor in order to improve the war effort, will be forced by the capitalist state to acquiesce in Roosevelt’s policy of an alliance with labor, modeled after the British setup – witness the establishment of the National Defense Mediation Board and the manner of settling the Bethlehem, Ford and Harvester strikes. Foreign policy is now well formulated – witness the passage of the Lease-Lend Bill and other more recent steps and the enthusiastic approval given to these measures by the outstanding spokesmen for both the Morgan and Rockefeller groups. German imperialism is the main threat and must be defeated at all costs. This will take care of Japan and, incidentally, in the process of “helping” England, British imperialism will become subservient to the greater interests of American imperialism.

The tendency which was exhibited by industrial capital in France towards appeasement and towards conserving its direct investments by avoiding the defense of Paris cannot be expected here. Finance capital is too cosmopolitan, too broad in its outlook to take such a narrow view of its interests. The paucity of investments in the Far East and Africa, as well as Europe, dictates to American imperialism a policy of attempting to achieve world domination. This policy is reinforced by the tremendous pressure being exerted by untold billions of surplus capital lying idle within the country, and by the constantly growing pressure of an expanding armaments economy – which more and more exhibits a tendency to become permanent. We will not enter a foreign war, says President Roosevelt, “except in case of attack.” But American imperialist interests have already been attacked by Germany and Japan. They will be more so in the near future. How soon, then, will it be before there is another Lusitania incident, before Roosevelt and the rest of the capitalist propagandists have the pretext or invent the pretext of “attack” by a foreign power and America is launched in actual military participation in World War II?


Vance Archive   |   Trotskyist Writers Index  |   ETOL Main Page

Last updated: 25 October 2014