Strange Currencies: America’s Varied, Volatile and Selective Affair(s) with Foreign Investment
Although numerous regulations aimed at curbing Foreign Investment in the United States have emerged over the past 100 years, America is, quite literally, a creation of foreign investment in itself. Even before foreign trade competition prompted European investment in America’s revolutionary war with Great Britain, the King James-chartered Virginia Company sent settlers to seek for wealth in the new world of Jamestown as early as 1607. Despite this original history and, in a theme that continues through as recently as 2005, regulatory attempts at curbing foreign investment are almost exclusively centered on one of two key areas.
The primary area(s) where the U.S. has sought protection from foreign investment “threats” is energy and natural resource investments. The Pickett Act of 1909 was aimed at curtailing the purchase of oil-producing western U.S. land by foreign investors and the Mineral Lands Leasing Act of 1920 sought similar ends by requiring foreign oil companies to lease drillable land from the U.S. Government directly, instead of allowing foreigners to purchase the land themselves. The second area of concern for the U.S. has been on matters of national security during wartime. This type of restriction on foreign investment was first seen in World War I when President Woodrow Wilson authorized the seizure of all radio stations with foreign ownership under the previously instituted Radio Act of 1912 and is echoed by US blocked foreign investment transactions during the post-9/11 Iraq and Afghanistan conflicts (discussed infra page 17).
After World War II, U.S. fears about foreign investment “threats” subsided almost completely as America basked in the pole position it earned after allied victories in both the European and Pacific theaters. Accordingly, persistent Sovereign Wealth Fund investment in the U.S. went virtually unnoticed from 1953 until the creation of OPEC in 1973 changed the way (some) Americans felt about foreign investment in the U.S.