AMERICAN investment in foreign countries is often an irritation to foreigners, who worry about alien economic dominance. What is far less visible and less controversial is the great foreign stake in the U.S. Few Americans realize that when they launder clothes with Lever Brothers' Lux, drink Lipton's Tea, open a can of Libby's tomato juice or groom their hair with Beecham's Brylcreem, they are buying from companies owned or controlled by foreigners.
At least nine huge U.S. corporations are foreign-controlled. The Netherlands-British Royal Dutch/Shell Group controls 69% of Shell Oil; Belgium's Petrofina owns two-thirds of American Petrofina; AKU of The Netherlands controls American Enka; The Netherlands-British Unilever owns both Lever Brothers and Thomas J. Lipton; Distillers Corp.-Seagrams of Canada has Joseph E. Seagram; Italy's Olivetti company is outright owner of Olivetti Underwood; the Swiss Nestle Co. holds one-third of Libby, McNeill & Libby, and Canada's George Weston Limited has 57% of National Tea.
Counting all holdings of securities, foreign investment in the U.S. totaled an estimated $91 billion last year—$10 billion more than in 1968. Even that impressive total does not include the reinvested earnings of foreign companies in the U.S. and it does not show the companies' market value, which is usually well above the book value on which the figures are based. Foreign investment is still less than the U.S. stake overseas, which reached an estimated $143 billion in 1969. But the foreign holding in the U.S. is growing at a far faster rate: 55% in the past five years, compared with a 35% growth in U.S. investment overseas.
Meanwhile, the growth of U.S. investments abroad is being retarded by Washington. Last week the U.S. Council of the International Chamber of Commerce reported that mandatory controls on direct investment is reducing U.S. competitiveness. The Council concluded that restrictions endanger the expansion of overseas profits, which currently contribute $7 billion to $8 billion a year to U.S. foreign exchange earnings. Ironically, the restrictions may thus damage the nation's balance of payments situation instead of improving it, as they were intended to do.