Total foreign holdings of U.S. government debt securities were about $160 billion at the end of June. The figure of $32.5 billion given in a story in yesterday's Business & Finance section refers only to the holdings of Middle East oil-exporting countries. A bar graph with that story depicting foreign investment in the United States in 1979 and 1980 shows the totals for different countries and regions in billions of dollars, but designated the size of the figures incorrectly.
Foreign investment in U.S. business, farmland and securities continues to grow but still amounts to only a small fraction of total U.S. economic activity and is dominated by Europeans, not by the oil-exporting countries, according to reports by three federal agencies.
Even if the state-owned Kuwait Petroleum Corp.'s $2.5 billion takeover of Santa Fe International Corp. of California, which was announced last week, is added to the figures, the reports indicate that fears of foreign domination of the U.S. economy are not substantiated by available information.
Foreign individuals, corporations and governments own less than 1 percent of all U.S. agricultural land. Their direct investment in U.S. corporations amounted to $65.5 billion at the end of 1980, a 20 percent increase in a year but a tiny fraction of total U.S. output. And their holdings in U.S. government debt securities were $32.5 billion at the end of June, about 3 percent of the national debt.
According to figures compiled by the Treasury and the Departments of Commerce and Agriculture, the major Arab members of the Organization of Petroleum Exporting Countries--Saudi Arabia, Kuwait, Iraq and the United Arab Emirates--have taken only small direct positions in the U.S. economy. They are far behind Canada, West German and the Netherlands in acqusition of U.S. assets.
Members of a House Commerce subcomittee led by Rep. Benjamin Rosenthal (D-N.Y.) have challenged the accuracy of the government's figures, especially those of the Treasury on OPEC portfolio holdings. Prompted by the Kuwait-Santa Fe deal, Rosenthal is planning further hearings on foreign investment later this week.
The American Jewish Committee, charging that growing Arab investment in the U..S. has brought a "concomitant increase in influence by these countries over American foreign policy in the Middle East," has sued the Treasury Department in an effort to get country-by-country breakdowns on OPEC holdings. The Treasury says it is precluded by law from releasing them.
Assistant Treasury Secretary Marc E. Leland told Rosenthal's subcommittee last month that overall the Reagan administration "welcomes foreign investment. It represents not a threat but an opportunity for the United States to strengthen our economic structure and revitalize our economy."
The Agriculture Department's report on Foreign Ownership of U.S. Agricultural Land says that as of last Dec. 31 "foreigners owned 7.8 million acres of U.S. agricultural land." That is 0.6 percent of all privately held crop, timber and grazing land in the country, and the figure includes land held by foreign firms that have U.S. partners.
Canadian investors, with 1.3 million acres, form the largest bloc of landholders. Individuals and corporations from Canada, Luxembourg, the Netherlands, Britain, West Germany and the Netherlands Antilles--a popular tax haven--account for 76 percent of total foreign holdings. The OPEC share is negligible: Saudi interests hold 9,000 acres; Kuwaiti interests, 2,662. The figures do not include commercial real estate.
According to the new edition of the Commerce Department's Survey of Current Business, the "foreign direct investment position" in U.S. business at the end of 1980 amounted to $65.5 billion. Manufacturing, trade, petroleum and insurance investments dominate the foreign holdings.
Foreign capital inflow into U.S. business amounted to $10.9 billion in 1980, down from nearly $12 billion the year before. Investors from the Netherlands, Britain and Canada held the largest interests. All members of OPEC together "accounted for less than 1 percent of the total, unchanged from 1979," the report says.
The Commerce report includes firms in which a foreign person or corporation owns 10 percent or more of the voting securities. It would not cover the extensive corporate investment portfolio held by the Kuwaitis, who have shares in many major U.S. industrial corporations but generally limit their participation in a company to 2 1/2 percent of shares outstanding.
The Treasury report, submitted to Congress by Leland, covers foreign holdings of U.S. government securities, corporate stocks and bonds, and commercial bank deposits. These are the securities most favored by Saudi and Kuwaiti investment managers.
According to the Treasury, "Middle East oil exporters" held $59.9 billion in U.S. and corporate securities and bank deposits as of June 30. According to Leland, about 18 percent of OPEC foreign holdings are in these securities.
Leland, who defended the accuracy of the Treasury's estimates, said that direct investment holdings by OPEC nations and individuals from OPEC states "continue to account for only 1 percent of total foreign direct investment in the U.S."