Report Outline
New Surge of Foreign Capital
Changing U.S. Investment Role
Inroads into American Finance
Special Focus
New Surge of Foreign Capital
Debate Over Impact of Foreign Holdings
A West German timber magnate buys the Virginia estate where President John Tyler was born. An English farmer purchases another Virginia estate, reputed to be the birthplace of President Zachary Taylor. A British tobacco and brewing conglomerate takes over Howard Johnson Co., and a West German supermarket chain gains control of A&P, the second largest string of grocery stores in America.
These foreign takeovers, all made this year, are among the most visible signs of a new surge of foreign investment in the United States that has prompted renewed concern in Congress and the nation. A congressional subcommittee under Rep. Benjamin S. Rosenthal, D-N.Y., held a series of hearings last summer on topics ranging from foreign penetration into American banking and the impact of investments by Arab nations to whether federal agencies are adequately monitoring foreign holdings.
Recent interest in foreign investments mirrors the national concern that arose in the mid-1970s in the wake of the Arab oil embargo and subsequent quadrupling of oil prices. These events underscored America's vulnerability to the economic actions of foreign nations. There was a growing fear that billions of “petrodollars” amassed by the oil-producing nations would be invested in the United States, creating a “second layer of vulnerability” — vulnerability in addition to America's dependence on foreign oil, making the nation even more open to political coercion by the Organization of Petroleum Exporting Countries (OPEC). |
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