Effects of USA’s investments in Canada during the 1920s

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Prior to the World War 1, United States of America was just a developed country, which was lagged behind other countries, such as, Britain, France, and Germany, with a large land and ample natural resources. However, as the World War 1 was caused, USA was required to produce war materials by France and Britain and exported to those countries. Hence, USA gained a huge amount of money and technical skills, and so the country has grown into one of the world’s economic powers. As a result, USA could invest in Canada in order to get raw materials for its secondary industries. However, USA’s investments in 1920s brought more benefits to USA itself than to Canada. There are three major reasons for the statement. First, since branch plants were established, Canadian own businesses lost their opportunities. In addition, the ultimate purpose of USA’s investments in primary industries was to enhance USA’s secondary industries. Lastly, the skyrocketing growth of Canadian economy by the middle of 1920s resultantly benefited USA than Canada.
To begin with, the companies of USA were located in Canada, even if they are controlled by USA. “The US companies built the factories in order to avoid the tariffs when they import the wares to Canada” (Bell, 2012, para.1). In other words, as the US companies could establish many factories in Canada as well as they circumvented the importing tariffs, they could get double profits by both two advantages of setting up the branch plants. Additionally, since the branch plants, partially for automobile companies, thrived, many Canadian auto-industries lost their control. “It was in these boom years, as well, that Canadian control of the industry was lost, as the US automakers with whom the Canadians had partnere...

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Ian Bell. (2012, March 1). The Branch Plant Economy. Retrieved from Ruben C. Bellan & Gord Mcintosh. (2014, March 27). Foreign Investment. Retrieved from Richard White. (n.d.). Making Cars In Canada: A Brief History of the Canadian Automobile Industry: 1900-1980. Retrieved from Mark Kuhiberg. (2003, May 5). PULP AND PAPER IN CANADA: Its First Century. Retrieved from
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