Published January 1979 — Download PDF of the original newspaper column
Byrd's-Eye View By U.S. Senator Robert C. Byrd Taking Heed of America's New Investors In an abrupt shift during the last decade, American investments abroad have slowed, while foreign investments in U.S. real estate, farmlands, and industries have grown rapidly. Accurate statistics on foreign purchases of real estate and farms are unavailable, but the federal government does monitor direct investment of securities from Treasury bills to common stock. Those holdings increased from $175 billion in 1973 to $311 billion in 1977, not far below the $381 billion in U.S. investment abroad. Acquisitions of American companies and building of new plants by foreigners have increased an estimated 40 percent in the last year. There are many reasons for the rise in foreign investment here: greater political stability, lower rates of inflation and taxation, large pools of skilled and highly productive labor, and a weakened dollar that makes most purchases bargain-priced. Congress is concerned about possible drawbacks to direct foreign investments, which, so far, represent a small share of total U.S. investment. Disadvantages would include neglect of local community responsibilities by absentee landlord owners, loss of some American-earned profits to stockholders overseas, possible inflation of farmland prices due to heavy foreign bidding, remoteness of home offices to concerns of U.S. workers, and loss of top management a n d technical positions to foreigners. Congress has already tightened restrictions on foreign banks, and has passed legislation requiring disclosure of farmland ownership. In addition, Congress has ordered the U.S. Commerce Department to prepare regular five-year nationwide studies on foreign investment. The first study, released in 1976, concluded that foreign investments in the U.S. have essentially the same economic effects as domestic investments; i.e., they bring in jobs and money. The study also showed that the jobs go overwhelmingly to local workers. Of the 1.8 million employees of foreign-owned companies in 1974, only 42,699 were foreigners. Many states, including West Virginia, have shown an interest in foreign investment as a way to create jobs and to provide money to update manufacturing plants. According to the Commerce Department study, in 1974, West Virginia had $528 million worth of foreign investment, which provided jobs for 9,419 employees. The state government of West Virginia encourages joint ventures that do not leave total control in the hands of a foreign company. An example is the agreement between the U.S., Japan, and West Germany to share the cost of building the proposed Gulf Oil Corporation solvent-refined coal plant in Morgantown. In return for helping with the expense of developing a process that turns coal into a clean, liquid boiler fuel, the other countries will have access to the new technology. While we must continue to monitor foreign investment in our country, such cooperation may be increasingly necessary as nations recognize their interdependence in the changing economic world. January 17, 1979