Business: The World Comes to Wall Street

Foreign bond sales hit $5 billion

In 1964 Wall Street lost its traditional role of financier to the world. An Interest Equalization Tax (I.E.T.) first proposed by President Kennedy and passed during the Johnson Administration made it prohibitively expensive for Americans to buy foreign securities and effectively forced foreigners who had been accustomed to floating bond issues in the U.S. to borrow elsewhere. But I.E.T. was lifted in mid-1974, and since then the foreigners have come flooding back sell what they call Yankee bonds to Americans. According to Morgan Guaranty Trust Co., the...

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