Sen. Harrison A. Williams, Jr. (D.NJ) today introduced an amendment to his proposed law controlling foreign investment in American companies which would prevent anyone participating in the Arab boycott from investing in the United States. At the same time, Jack F. Bennett. Undersecretary of Treasury for Monetary Affairs, opposed any new regulations and said existing laws were adequate.
Williams, chairman of the Senate Banking, Housing and Urban Affairs Subcommittee on Securities, had earlier introduced a bill to monitor any investment of five percent or more by a foreign government, company or individual in a U.S. company. The proposed law would also give the President the authority to prohibit the investment if it was not in the national interest.
The New Jersey Democrat’s new amendment would prohibit investment by anyone “who has forced or attempted to force other firms to boycott an American business because of its dealings with or in a foreign country with which the U.S. has diplomatic relations,” Williams said the Arab boycott “is quite clearly and very distressingly, being pursued against U.S. businesses merely because they have ties to Jews or others considered friendly to Israel or ‘Zionism.'”
Bennett, testifying before Williams’ subcommittee which began today three days of hearings on the boycott, said no new legislation is required because existing laws and practices “provide extensive information with respect to foreign investment as well as safeguards to deal with particular investments.”
CAUTIONS AGAINST OPPRESSIVE SURVEILLANCE
However, Bennett said that administrative action is being taken to establish an inter-agency committee reporting to the President’s Economic Policy Board which would serve as the focal point for ensuring that foreign investment in the U.S. is consistent with the national interest.
He also suggested a new office to serve the government by monitoring foreign investment, analyzing trends of investment and their impact, and negotiating procedures with “the principal foreign governmental investors for advance consultations with the U.S. government on prospective major direct investments in the United States.
The Treasury official contended that foreign investment is contributing to the dynamism of the American economy by stimulating competition in seeking new investment opportunities. “Let us not make the surveillance so oppressive as to drive it away,” he said. “We need it,” Williams noted that Bennett is a former executive of Exxon.
WANTS IT OUT IN THE OPEN
Former Ohio Sen. Howard M. Metzenbaum urged tightening of the Williams amendment saying that the notice of intention by foreign interests to acquire control of a firm should not be confidential and submitted only to the Security and Exchange Commission and the President. “I would prefer to trust the pressure of public opinion if the entire nation knew that such action was contemplated,” the Ohio Democrat said.
“To those who might suggest that this might have an impact on the stock market price of the company’s securities,” Metzenbaum said, “when the SEC, its staff, the President and his staff, know that such action is pending, it will no longer be a secret. Other countries such as Australia, Canada, France, Germany and Italy require disclosure. Why not the U.S.?”
Metzenbaum also pointed out that if the entire matter of foreign investment is kept confidential, a stockholder would not be able to act against a foreign investor that has failed to comply with U.S. laws. He also recommended that the Williams amendment include a proviso that would enable the President to inquire into the purchaser’s intent. “If the foreign investor seeks to compromise our independence and integrity, let that foreign investor look elsewhere,” he said.
Meanwhile, James E. Smith, the U.S. Comptroller of the Currency, has warned banks against accepting the Arabs’ anti-Jewish rules in dealings, and against accepting large deposits or loans by Arab investors that require discrimination against Jews. In a letter dated Feb. 24, Smith said his office “will assure adherence of national banks to a non-discriminatory policy.” Smith could issue cease-and-desist orders against bias where it is uncovered.
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The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
