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With one exception the controlling foreign investments in United States railways were held by the two large Canadian systems. These holdings were acquired for the most part during the last half of the last century when the Canadian companies were seeking direct access to Chicago and to the eastern seaboard of the United States. Foreign direct investments in transportation enterprises in 1937 were estimated at $257,000,000.

Direct investments by foreigners in United States mining and agricultural companies were, up until about 1910, more numerous and valuable than at present. This was particularly true of agriculture, 5

During the 1870–80's British capitalists obtained large tracts of land in the South and Middle West either for exploitation or as speculations. The liquidation of such holdings was very rapid after about 1900 and during the World War, and as a result were relatively unimportant in 1937. Controlling investments in United States mining enterprises in 1937 were generally of rather recent origin. The pre-war foreign holdings were usually sold gradually to United States investors so that while foreigners still have large investments in mining enterprises in this country they are no longer controlling interests. The development of American potash resources, which is of fairly recent date, has been financed largely by foreign capital and accounts for a substantial portion of the $24,000,000 invested in mining enterprises.

Import-export houses, and distributors of foreign specialty articles, such as some Japanese and Philippine goods, comprise the bulk of the foreign direct investments in the distribution industry.

TABLE III.--Foreign direct investments in United States, by principal countries

and industries, 1937
[In thousands of dollars]

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366, 547 29, 674 30, 285

27, 825 5, 009
65, 662 3, 573 142
45, 805 6, 279

2, 467
24, 175
12, 864

24, 109

7,411 1, 490 24, 998 1, 433 736 11, 937 3, 446

2,801 591, 058 69, 689 39, 125 130, 873 11,008 215, 624 2, 205

13, 975 5

925 92, 940 13, 146 277, 074 22, 752 833, 343
142, 551 325 1, 266 511 178, 519


630 71, 190 38

147 249 54,985 2, 276

28, 045 6, 400 73, 932 10, 078

11, 629 1, 786 56, 503 2, 569

29, 736

13, 077 7,895 39, 156 925 247, 883 13,583 334, 875 40, 223 1, 337, 364 8,057 34,987 10,199 45, 742 6, 205

462, 693 200 149 55 1, 516 292

18, 397

Canada 1
Latin America..

Africa, Asia, and Oceania:


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21, 805 10 41, 030

8, 386 1,085 19, 320

30, 191 1,095 60, 350 431 65 38 1,057 3,797 9, 182 283, 450 23,902 412, 365 48, 872 1,882, 603

1, 737




Grand total.

728, 669 119, 161 257,002

1 Including $102,000 for Newfoundland ($2,000 in mining and $100,000 in "miscellaneous").

5 There are undoubtedly some large unincorporated farms and urban properties owned by foreigners today that are not included in the 1937 estimates.


Seventy percent, or over $1,300,000,000, of the foreign direct investments in the United States in 1937 belonged to the United Kingdom and the British Dominions. The bulk of these large investments$833,000,000—was made by corporations and individuals in the United Kingdom. Canada with $463,000,000 made up most of the remainder. Manufacturing and insurance were the two industrial groups in which British investments were largely centered. To an important degree both had a long history, some of the latter going as far back as 1804 and the former to 1853. In many cases the only explanation of their continued existence as foreign-controlled enterprises was this historical factor and their profitability. In other cases important English investments arose out of patent controls, tariff measures, and the demands of competitive marketing.

Canadian direct investments in the United States covered a wide range of activities. They seem to have been the result of nearness and the similarity of markets and methods. Nearness or contiguity were, of course, the determining factor in the investments in branch railway lines in this country. To a very real degree nearness can also be said to be a factor in the manufacturing investments, the next most important group, as is evident from the notable extent to which these enterprises are concentrated in Buffalo and northern New York. Furthermore, the close relations that exist between Canadian and United States businessmen naturally lead to their association in various enterprises or industries.

European countries, other than the United Kingdom, likewise had large direct investments in the United States in 1937. Netherlands, with $178,000,000, followed Canada in size. Switzerland, Belgium, France, and Germany were next in that order of importance. While petroleum comprised the bulk of the investment of the Netherlands, manufacturing was a large part of the total of each of the countries listed above. (See table ifl.) Chemical, textile, and mechanical branches of manufacturing were most prominently represented.

Direct investments by other foreign countries were scattered and relatively unimportant with the exception of the Japanese interests. The latter totaled $41,000,000, in which insurance and distribution enterprises were the only ones of significance.

TABLE IV.--Foreign direct investments in the United States, by countries, 1937

In thousands of dollars)


Total Europe: investment South America:

investment Austria 155 Argentina.

987 Belgium

71, 190

14 Czechoslovakia

1,467 Brazil. Denmark.

1, 674 8,138 Chile. France

7,777 56, 503 Peru.

21 Germany

54, 985 Greece

765 Total, South America.. Irish Free State

10, 473 1, 107 Italy

12, 476 West Indies: Lichtenstein

8, 257
British West Indies

914 Lithuania

35 Cuba. Luxembourg

4, 986 2, 757 Dominican Republic.

75 Madeira

147 Monaco.

67 Total, West Indies Netherlands.

5,975 178, 519 Norway

2,318 Africa: Poland 26 British Africa

255 Portugal.. 2 Egypt.

3 Spain

1, 419 Sweden 29, 736 Total, Africa.

258 Switzerland.

73, 932 Union of Soviet Socialist Republics.

20 Asia: United Kingdom.. 833, 343 British India

1, 260 China

4, 803 Total, Europe.. 1, 337, 364 Hong Kong

436 Iraq..

106 North America:


41,030 Canada 462, 593 Netherlands East Indies

1 Newfoundland



Philippine Islands.. Total, North America...

9, 803 462, 695 Turkey

4 Mexico and Central America:

Total, Asia.

57, 487 Mexico.. El Salvador.

1 Oceania: Guatemala 60 Australia

741 Honduras. 12 New Zealand.

1,864 Panama..

Total, Oceania.

2, 605 Total, Mexico and Central America

1, 949

3, 797 Grand total

1,882, 603



The control over United States production exercised by foreign corporations through their direct investments in this country was, on the whole, negligible in 1937. In agriculture, for example, while foreigners controlled one of the largest cotton-plantation enterprises in the United States its production was a small fraction of total cotton production of this country. While foreigners owned several ranches and one of them was between 800,000 and 900,000 acres in size, with about 50,000 head of cattle, that too was only a fraction of 1 percent of the total acreage and stock of cattle. Foreign ownership of United States coal, iron, copper, and timber resources, to mention a few important raw materials, were insignificant.

In a few instances a larger proportion of the United States production of raw materials was controlled by foreign corporations. According to data supplied to the Department of Commerce by the Bureau of Mines, foreign-controlled oil corporations in the United States produced in 1937 about 5.0 percent of the total crude-oil production in this country. The aggregate crude runs of the same corporations was about 6.9 percent of the total crude runs. As of January 1, 1938, the crudeoil refinery capacity (operating) of the foreign-owned United States

corporations was about 6.4 percent of the refinery capacity of the United States. 6

Certain other branches of the mineral industry revealed a larger concentration of foreign control. In 1937 the only smelter of antimony metal in the United States was owned abroad. This company produced little or no ore but obtained a substantial part of its antimonyore requirements from affiliated mines in Mexico. The antimony-oxide output of this smelter in 1937 was roughly 25 percent of the domestic total. In 1938 a new antimony smelter was put in operation in California.? Almost three-fourths of all of the potash produced in the United States in 1937 was produced by corporations in which foreigners had substantial interests. The first real beginning of the potash industry in this country was made after the outbreak of the World War in 1914 which prevented imports from the former German sources. The most substantial advances were made after 1926 and at the present time over half of the United States consumption is produced here. Only a very small part of the production of phosphate, another great fertilizer material, was in the hands of foreign-owned companies. More than 90 percent of the domestic output of boron minerals, from which commercial borax and boric acid are produced, was accounted for by companies under foreign control.

TABLE V.Study of international affiliations of American industry based on

Census of Manufactures, 1937

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Source: Department of Commerce, Bureau of the Census.

Note by Finance Division, Bureau of Foreign and Domestic Commerce. The list of foreign-controlled companies, the “Selected companies,” was supplied to the Bureau of the Census by the Finance Division. The Number of establishments” refers to the number of plants in operation during 1937 and the number of “Concerns” refers to the United States companies owning the plants.

On the whole foreign-controlled United States companies accounted for only a very small part of the total output of manufacturing enterprises in this country in 1937. In this industrial group, however, as in the raw material industries, there was a significant con

6 Based on data in Department of Interior, Bureau of Mines, Information Circular 7034, and in the files of the Finance Division, Department of Commerce.

? Bureau of Mines, Minerals Yearbook, 1937, p. 733, and 1939, p. 720. 8 The Annalist, "Potash, a New Industry Making Satisfactory Progress," by Paul Portalt, July 6, 1939, pp. 4 and 7.

centration of foreign control over certain commodities. In order to obtain a more accurate idea of the volume of production and the percentage controlled by foreigners, the Bureau of the Census was requested to compile the pertinent data on the basis of a list of foreign direct investments in the United States which was supplied by the Finance Division, Bureau of Foreign and Domestic Commerce. Those data, as compiled by the Bureau of the Census, are given in table V.

There were several fairly important industry groups not covered by table V because in those groups there were less than four concerns in the list of foreign-owned companies or the production of one concern in the group comprised such a large part of the total for the "selected companies” that, in effect, that total revealed the approximate production of the one large concern. Some of the industrial groups excluded from the table on those grounds were cotton yarn and thread, woolen yarns, soap, perfumes, cosmetics, and other toilet preparations, rubber tires and inner tubes, glass, and tobacco and snuff.

The chief concentrations of foreign-controlled manufacturing production proved to be in two combinations of industries shown in table V; first, liquors-distilled, malt, and rectified or blended; and, second, chemicals, not elsewhere classified, and rayon and allied products. All of the other groups in table V showed the production of the "selected companies” to be 2.2 percent or less of the total production. The two industry combinations mentioned above were necessitated by the small number of companies in the industries combined or by a concentration of production in one concern in the industry.

It is quite generally known that the United States production of rayon, distilled liquors, and dyestuffs in 1937 was centered in foreigncontrolled companies to a greater degree than the percentages in table V indicate. Accordingly it was desirable to ascertain, from other sources, the information desired.

In 1929 in an article on World Investments in Rayon published by the Manchester Guardiano (England) the statement was made that foreign capital invested in five United States rayon companies amounted to £35,000,000 or 55 percent of the capital invested in the rayon industry in the United States. The same comparison cannot be made for a more recent date but data regarding the installed capacity of the rayon plants in this country 10 shows that between 55 and 60 percent of that capacity was, as of the end of 1938, owned by foreign-controlled companies. While the percentage has remained about the same or slightly increased, it is true that United States capital is associated with the foreign capital in those companies to a larger extent than in 1929.

The production of dyestuffs, which in 1914 was almost exclusively under the control of foreign corporations, was, on the basis of sales data compiled by the United States Tariff Commission, controlled to the extent of only about 30 percent in 1938.

The repeal of the prohibition amendment in 1933 presented an opportunity to foreign whisky producers to obtain an important position in this market. Partly because of the import duty of $5 per proof gallon, those foreign corporations, particularly Canadian, or9 The Commercial, published by the Manchester Guardian, July 11, 1929, p. 11. 10 Rayon and Staple Fiber Yearbook, third edition, 1939, pp. 752-771.

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