Movement Toward Balance in International Transactions of

MOVEMENT TOWARD BALANCE IN INTERNATIONALTRANSACTIONS OF THE UNITED STATES

by

LEWIS N. DEMBITZ AND ALBERT O. HIRSCHMAN X

Since 1947 the export surplus of the United Stateshas been sharply reduced, after having reached inthat year the highest peacetime level in history.The reduction reflected significant progress towardgreater international balance. Although there arestill large areas of economic activity in which majoradjustments are needed, the developments of 1948appear to have provided a real start toward therestoration of healthier economic relationships, bothwithin the principal countries and in internationaltrade and finance.

The reduction in the export surplus of the UnitedStates occurred despite the inauguration of theEuropean Recovery Program. It was due to a sub-stantial decline in exports combined with a notablerise in imports. These changes exerted an anti-inflationary influence on the United States economywhich during the greater part of the year was stillsubjected to strong expansionary pressure. To someextent the reduction of the export surplus can beviewed as one of the factors contributing to recentreadjustments in the United States. Notwithstand-ing the reduction, however, the export surplusduring 1948 and the first quarter of 1949 was stillvery large in relation to prewar levels.

In the financing of the export surplus, the great-est change from 1947 to 1948 was a large declinein the portion that was financed by liquidation offoreign gold and dollar assets, as is shown by theaccompanying chart. This liquidation had been solarge in 1947 as to make very serious inroads onmany countries' needed reserves. In 1948 a largerproportion of this country's export surplus was paidfor by United States Government disbursementswhich were in turn covered by taxation, as opposedto other means of financing which result in mone-tary expansion. This change in the financing ofthe export surplus added to such stabilizing effectsas were exerted by its absolute decline.

1 Mr. Dembitz and Mr. Hirschman are members of theBoard's Division of Research and Statistics. In preparing thisarticle, they incorporated a great deal of factual material andanalysis prepared by other members of the Division's staffworking on international financial and economic problems.

Trade and exchange restrictions introduced orreinforced in many countries as a result of the de-pletion in their gold and dollar resources during1947, together with some reduction in United Statesaid, were responsible in part for the decline in theUnited States export surplus. In a more funda-

MEANS OF FINANCING UNITED STATES EXPORTSOF GOODS AND SERVICES

SEM1ANNUALLY IILL10NS OF DOLLARS12

1946 1947 1948

t Includes dollars drawn from the International MonetaryFund, disbursements on International Bank loans, privateUnited States donations and investments abroad, liquidation ofother foreign assets in the United States, and errors andomissions.

SOURCE.—Based largely upon Department of Commerce data.

mental sense, however, the progress toward inter-national balance was attributable to increased in-dustrial and agricultural production in many for-eign countries.

In large measure, the volume of United Statesexports and the export surplus have reflectedthis country's contribution to postwar reconstruc-tion. As reconstruction proceeded, it was to beexpected that the abnormal dependence of foreigncountries on United States production and financial

480 FEDERAL RESERVE BULLETIN

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

May 1949

BALANCE IN INTERNATIONAL TRANSACTIONS OF THE UNITED STATES

assistance would diminish, and that the UnitedStates would be able to obtain an increasing amountof goods and services from abroad. However,with prewar levels of output being attained or sur-passed in many foreign countries, further progresstoward international equilibrium may well slowdown somewhat. Of great importance for balance-of-payments developments is a general weakeningof inflationary pressures. While the readjustmentnow in course in the United States may interferewith further expansion of United States imports,a downward adjustment in the United States pricelevel would also result in dollar savings to foreigncountries. Moreover, the simultaneous progress offoreign countries toward greater financial stabilitytends to have favorable effects on their balancesof payments.

UNITED STATES EXPORTS AND IMPORTS

United States exports of goods and services in1948 exceeded imports by 6.3 billion dollars, andthe export surplus during the first quarter of 1949continued at around the same annual rate. Thisrate reflected a sharp reduction from the extremelyhigh figure of 11.3 billion in 1947. Exports ofgoods and receipts for services rendered to for-eigners, amounting in 1948 to 16.8 billion dollars,showed a decline of 2.9 billion from the precedingyear. Imports, including payments to foreignersfor services, at 10.5 billion dollars, were 2.0 billionhigher than in 1947, as is shown in the table.

Of the total reduction of 5.0 billion dollars inthe export surplus between 1947 and 1948, mer-chandise trade accounted for 4.3 billion. The

FOREIGN TRADE OF THE UNITED STATES AND MEANS OF FINANCING X

[In billions of dollars]

Item 1948 1947 1946

Net purchases of goods and services from United States by foreign coun-tries:

United States exports:GoodsServices

Total

United States imports:GoodsServices

13.43.4

7 . 72 . 8

Total

Net purchases from United States by foreign countries

Sources of funds utilized to finance net purchases by foreigners:

United States Government (net):CreditsDonations

16.8

10.5

6.3

16.13.7

6.12.4

11.93.1

5.22.0

8.5

11.3

15.

7 . 2

7 . 8

Total.United States—private (net):

Foreign investment (long- and short-term). . . .Donations

Total.

International institutions (net):Dollars disbursed by International BankDollars drawn from International Monetary F u n d . . . .

Total . . .

Foreign countries' own capital assets (net):Sales of gold to United StatesReduction of banking funds in United States.Liquidation of other assets in United States. .

0.93.8

0.90.6

0.20.2

1.52-1.0

0.3

Total.

Total sources of financing.Errors and omissions

1.5

0.4

0 . 9

7.5- 1 . 1

3.91.8

0.70.6

0.30.5

2.81.20.5

5.7

1.3

0.8

4.5

12.3- 1 . 0

2.82.3

0.30.6

0.70.90.4

2.0

8.0-0 .2

1 This table is derived largely from U. S. balance-of-payments data compiled by the Department of Commerce. Gold and dollartransactions between the United States and the International Monetary Fund and the International Bank are omitted while gold anddollar financing provided by the Fund and the Bank are included. ECA disbursements that are ultimately to be placed on a loan basisare treated as credits. Details may not add to totals because of rounding.

2 Increase.

MAY 1949 481


May 1949


remaining 0.7 billion dollars of reduction wasalmost entirely accounted for by transportationservices, which yielded 0.4 billion dollars in 1948as against about 1 billion in 1947. This reduc-tion was due largely to a recovery in the share oftraffic carried by foreign ships, although trans-portation transactions continued to show a net bal-ance payable to this country in contrast with nega-tive balances before the war. Increases in net tour-ist expenditures and in United States Governmentdisbursements for services abroad were offset inpart by a net increase in the income received bythis country on foreign investments.

Merchandise trade. Total goods exports in 1948amounted to 13.4 billion dollars, a decline of 2.7billion, or 17 per cent, from 1947. Since thisdecline occurred despite a rise in unit value ofabout 5 per cent, exports decreased more sharplyin volume than in dollar amount. Total goodsimports reached an all-time high of 7.7 billion dol-lars, an increase of 1.6 billion, or 28 per cent, fromthe 1947 level. The net result was a 45 per centdrop in the merchandise export surplus to 5.7 bil-lion dollars in 1948. The record imports resultedfrom both higher unit value and heavier volume.

On the export side, expanded foreign productionand greater availability of goods from nondollarsources, along with the general dollar stringency,contributed to the sharp reduction. On the im-port side, there were the greater availability ofworld supplies, the concerted efforts of severalcountries to obtain dollars by selling products tothe United States, and the continued high level ofproduction and income in the United States.Despite their expansion, United States imports stillwere substantially below the level that would be re-quired to restore the prewar relation between UnitedStates imports and gross national product.

Exports. The 1948 decline in exports of UnitedStates merchandise, as recorded by the Bureau ofthe Census, was shared by all major commoditycategories. Shipments of crude materials and crudefoodstuffs, however, with a decline of only 7 percent, were relatively well maintained in comparisonwith exports of manufactured goods, which declinedby more than 20 per cent. Changes for the severalcommodity groups are given in the accompanyingtable.

Of the 1.6 billion dollar drop in exports of finishedmanufactures between 1947 and 1948, almost half

DISTRIBUTION OF U N I T E D STATES MERCHANDISE TRADE

BY COMMODITY CLASSES X

[In millions of dollars]

Commodityclasses

Crude materials. . .Crude foodstuffs.. .Manufactured

foodstuffsSemimanufactures.Finished manufac-

tures

Total

Exports

1948

1,4901,268

1,3191,368

7,054

12,498

1947

1,6021,350

1,7561,785

8,672

15,163

Percen-tage

change

- 7- 6

- 2 5- 2 3

- 1 9

- 1 8

Imports

1948

2,1091,271

7311,632

1,296

7,038

1947

1,7431,017

6561,245

983

5,643

Percen-tage

change

+21+25

+ 11+31

+32

+25

1 Data cover only "recorded" exports of U. S. merchandiseand imports for consumption. The unrecorded exports consistedmainly of certain U. S. Government transactions.

was accounted for by reduced transfers of merchantvessels and cotton manufactures. The former isexplained by the fact that the program to sell war-built ships abroad was almost completed in 1947.The decline in exports of cotton manufactures fromthe high 1947 level is attributable mainly to greaterproduction in consuming countries and to acceler-ated export drives by nondollar countries. The de-cline in exports of manufactured foodstuffs was forthe most part a continuation of a trend begun in1947. It included a substantial reduction in exportsof wheat flour, however, which had been at a highlevel in 1947.

Several important changes occurred within thecrude materials group. The very large reductionin the movement of coal to Europe reflected im-proved supply conditions there. Exports of rawcotton, the largest item in this group, expandedconsiderably during 1948 while tobacco shipmentsdeclined by 20 per cent. Among crude foodstuffs,a large increase in the value of wheat exports wassufficient to offset a sharp decline in the value ofcorn shipments.

Imports. The substantial expansion in UnitedStates imports of merchandise in 1948 was sharedgenerally among the major commodity groups.The group of manufactured foodstuffs showedthe smallest increase, because of the reduction inimports of cane sugar that followed the reintroduc-tion of quotas in accordance with the Sugar Actof 1948.

Of the substantial increase in the crude materialsgroup, petroleum and raw wool imports accountedfor nearly two-thirds. Imports of numerous other



May 1949


crude materials, including undressed furs, hides,and skins, were also larger than in 1947. In thegroup of semimanufactured products, increaseswere reported for tin, petroleum products, copper,and wood products.

Increases in imports of newsprint, agriculturalmachinery, and vehicles accounted for about halfthe expansion in finished manufactured products.

FINANCING THE EXPORT SURPLUS

The large decline from 1947 to 1948 in netpurchases from the United States by foreign coun-tries was accompanied by greatly reduced liquida-tion of foreign gold and dollar balances. Foreignsales of gold in 1948 were largely compensated forby new gold production and accumulation of dollarbalances with the result that total foreign gold anddollar balances showed little change for the yearafter having declined by 4.2 billion dollars in 1947.

The amount financed by United States Govern-ment aid accounted for the bulk of the exportsurplus in 1948. At the same time, the amount ofGovernment loans and grants declined somewhatfrom the 1947 level, notwithstanding inaugurationof the European Recovery Program. The re-mainder of the export surplus was financed byprivate investments and donations, and by dollarssupplied by the International Monetary Fund andthe International Bank for Reconstruction and De-velopment.

United States Government financing. Net UnitedStates Government assistance to foreign countriesin the form of both loans and grants, amountingto 4.7 billion dollars, was about 1 billion dollarsless than in 1947. However, the assistance thusprovided represented an increased proportion of thesharply reduced export surplus. The accompanyingtable shows disbursements under Government loansand grants in 1947 and 1948.

Largely because of the European Recovery Pro-gram, net Government assistance in the form ofoutright gifts to foreign countries, as distinguishedfrom loans, increased from 1.8 billion dollars in1947 to 3.8 billion in 1948. Larger expendituresby the Army for imports into Germany and theexpansion of assistance programs for Greece, Tur-key, and China in 1948 also played a part in thisincrease. On the other hand, utilizations of loans{net of repayments), which had amounted to 3.9

billion in 1947, were about 0.9 billion dollars in1948.

The European Recovery Program was the out-standing development in United States Govern-ment aid during 1948. Through the provision of"assistance to those countries of Europe whichparticipate in a joint recovery program based uponself-help and mutual cooperation," the Programaimed at "the establishment of sound economicconditions, stable international economic relation-ships, and the achievement by the countries ofEurope of a healthy economy independent of extra-ordinary outside assistance." For this purpose,Congress appropriated 4 billion dollars for the pe-

UNITED STATES GOVERNMENT FINANCIAL AID TO

FOREIGN COUNTRIES 1

[Disbursements, in millions of dollars]

Form of financing

U. S. Government loans:

Export-Import Bank (net)ECA loans 2

Surplus property and ship-sale creditsBritish loanOtherReceipts (other than Export-Import Bank). . .

Total long-term (net)Short-term (net)

Total loans (net)

U. S. Government grants:

UNRRA and Post-UNRRA aidInterim aidEuropean Recovery Program 2

Aid to ChinaGovernment and relief in occupied areas

(Department of the Army)Aid to Greece and TurkeyPhilippine war damage payments, etcInternational Refugee OrganizationLend-lease settlementsOther

Total grants (net)

Total loans and grants (net)

1948

232486249300

21-115

1,173-260

913

84556

1,381171

1,26334912790

- 1 0-189

3,822

4,735

1947

724

2742,850

82-102

3,82873

3,901

78812

980749617

-20651

1,812

5,713

1 Largely derived from U. S. balance-of-payments data compiledby the U. S. Department of Commerce.

2 Of total aid rendered to foreign countries under the EuropeanRecovery Program in 1948, 486 million dollars is ultimately to beplaced on a loan basis. This amount is included here underlong-term loans.

riod from April 1948 to June 1949 with an authori-zation for an additional 1 billion dollars to be dis-bursed by the Export-Import Bank as loans. Inaddition, most of the 577 million dollars authorizedby Congress toward the end of 1947 for the interimaid program was expended in 1948.

Expenditures under the ERP in 1948, on botha grant and a loan basis, amounted to about 1.9

MAY 1949 483


May 1949


billion dollars or almost 40 per cent of total UnitedStates Government assistance. However, the ex-penditures did not in their entirety represent ship-ments from the United States. Almost halfof the funds were spent in countries other than theUnited States, such as Canada and certain LatinAmerican countries. The dollars accruing to thesecountries became available for purchases from theUnited States.

Although actual expenditure during the first ninemonths of the European Recovery Programamounted to less than half the 5 billion dollars au-thorized, procurement had been authorized as ofthe end of the year for 3.7 billion dollars of goods,of which 2.3 billion was to be purchased in theUnited States. Congress has authorized the appro-priation of an additional 1.2 billion dollars for theperiod April-June 1949 and 4.3 billion for the yearending June 30, 1950. The average monthly rateof disbursements may be expected to be larger in1949 than in 1948, when it was held down by theinevitable lags connected with the launching ofthe program.

Private financing. New private long-term invest-ment by Americans in foreign countries during1948 showed an increase of about 250 million dol-lars over 1947. The new investment consisted pri-marily of direct investments by business concerns,which amounted to about 650 million dollars net in1948. This nearly equaled the record volume ofsuch investment in 1947 and, like it, consisted prin-cipally of investment by the petroleum industry.In addition, however, there was a net outflow of100 million in portfolio investments in 1948, in con-trast with a net repatriation of such investmentsin 1947. This net outflow resulted from a singlelarge purchase of Canadian bonds by Americaninsurance companies. There was also an outflowof about 125 million dollars in private short-termcredit to foreign borrowers, a smaller amount thanin 1947.

The 1948 total of private long-term investment,while small in comparison with Government assist-ance, was the highest annual figure since 1928.In view of the fact that national income in theUnited States rose by about 170 per cent from 1928to 1948, however, the volume of private investmentis still far below what might be expected on thebasis of pre-1930 relationships.

Private remittances to beneficiaries abroad,

amounting to about 600 million dollars in 1948,reflected no change from 1946 and 1947 levels.

Financing by international institutions. Dollarassistance to countries by the International Mone-tary Fund and the International Bank for Recon-struction and Development declined in 1948 toabout one-half of the 1947 amount. The sharpestreduction was apparent in dollars supplied by theFund, which amounted to less than 200 millionin 1948, compared to about 450 million in 1947.This was a consequence of the Fund's policy ofconserving its resources during the period of theEuropean Recovery Program by extending no dol-lar assistance to participants in the Program exceptin "exceptional and unforeseen cases." Since theinitiation of this policy, all sales of dollars by theFund have been to nonparticipants, chiefly Indiaand South Africa. The largest sale in 1948, how-ever, was that of 60 million dollars to the UnitedKingdom in March, prior to the beginning of theEuropean Recovery Program. Total drawings ofdollars upon the Fund from its inception to theend of 1948 did not reach the equivalent of foreigncountries' gold subscriptions, and so in efifect theentire United States contribution remained unused.

Although the International Bank for Reconstruc-tion and Development disbursed only about 200million dollars in 1948 compared to almost 300million in 1947, it has since contracted loans withChile, Mexico, Brazil, and Belgium in amountstotaling 140 million dollars. At the end of 1948,the Bank's dollar resources amounted to about 500million.

Use of foreign gold and dollar balances. Sales ofgold to the United States by foreign countriestotaled 1.5 billion dollars in 1948. About one-thirdof this amount served to finance their deficits withthis country, while the remainder resulted in build-ing up official dollar balances. Such official bal-ances, which are held by governments, centralbanks, and other official institutions, increased fromabout 1.8 to 2.8 billion dollars. Privately ownedforeign dollar balances remained at about 3 billiondollars.

The estimated decline during 1948 in the aggre-gate gold reserves of all foreign countries (otherthan the U.S.S.R.) was about 1,100 million dol-lars. This figure is less than the amount of goldsold to the United States by some 400 million dol-lars, which represents the estimated net flow of



May 1949


newly mined gold into the official holdings of for-eign countries. Thus, the 500 million dollars usedto finance deficits with this country was largely off-set by the flow of newly mined gold into foreignreserves, leaving aggregate foreign gold and dollarholdings almost unchanged in 1948; a decline inthese holdings during the first half of the year waslargely compensated by a rise in the second half.There were, however, some very substantial changesin the positions of individual countries.

FOREIGN GOLD RESERVESAND SHORT - TERM DOLLAR BALANCES

END OF QUARTER FIGURES

1946 1947 1948 1949

NOTE.—March 1949 figures are preliminary.

The 500 million dollars of net financing by goldand dollar balances in 1948 compares with about4,000 million in 1947. The large drain on for-eign gold and dollar balances in 1947 brought theholdings of many countries to dangerously lowlevels and led them to take measures to assurethemselves against further large losses. Sales of1.5 billion of gold to the United States in 1948compare with 2.8 billion in the previous year, andthe building up of foreign dollar balances in 1948contrasts with net drawings of 1.2 billion in theprevious year.

About half of the net loss of gold and dollarsby foreign countries during 1947 had representedlosses by countries which subsequently becameparticipants in the European Recovery Program.

During 1948 the aggregate holdings of these coun-tries were maintained with little change. Italy,Switzerland, and Germany, in fact, increased theirdollar holdings appreciably, as is shown in theaccompanying table. The chart shows holdings offoreign gold reserves and short-term dollar balancesfor selected countries and groups of countries.

The country having the largest increase in goldand dollar holdings in 1948 was Canada which, in

ESTIMATED CHANGES IN FOREIGN GOLD RESERVES AND SHORT-

TERM DOLLAR BALANCES, 1947-48 1


Area and country

ERP countries (other thanUnited Kingdom):

Belgium-Luxembourg (anddependencies)

France (and dependencies). . .Germany (Western Zones)3...ItalyNetherlands (and depend-

encies)NorwayS w e d e n . . .SwitzerlandOther ERP countries4

Total . .

Other Continental Europe5. . . .

United Kingdom (and depend-encies)

Union of South AfricaOther sterling area7

Canada

Latin America:ArgentinaBrazil..CubaVenezuelaOther Latin America

Total

Philippine RepublicRest of world

Total for countries withnet gain during year.. .

Total for countries withnet loss during year

Net total

Hold-ingsat

end of1946

9631,225

7296

984215554

1,8031,247

7,294

882

2,937986568

1,475

1,185528379289

1,275

3,656

448.1,102

19,348

Increase ordecrease (—)

1947 2

-180-456

83-85

-322-87

-390- 1

-310

-1,748

-30

-548-178

10-771

-627-69135

4-217

-774

42-230

341

-4,568

-4,227

1948 2

352389

219

-1042

- 3 4124

-121

233

-95

-1836 -609

- 1480

-202-18- 6152

-58

-132

- 1181

1,381

-1,508

-127

Hold-ingsat

end of1948

818792179430

558130130

1,926816

5,779

757

2,206199577

1,184

356441508445

1,000

2,750

4891,053

14,994

1 Includes estimated gold holdings for countries which do notfully report their gold holdings (except for U. S. S. R. gold holdings,which are omitted), and also includes both official and privatelyheld short-term banking funds. Figures for 1948 are preliminary.

2 Decreases include foreign gold contributions to InternationalMonetary Fund in the amount of 650 million dollars in 1947 and72 million in 1948.

3 Short-term dollar balances only.4 Includes gold to be distributed by the Tripartite Commission

to European countries (including some non-ERP countries).5 Includes short-term dollar balances only for U. S. S. R.6 Includes transfer of 322 million dollars of gold to the United

Kingdom.7 Includes Egypt and Palestine (and subsequently Israel)

throughout, although Egypt withdrew from the sterling area inJuly 1947 and Palestine in February 1948. Excludes Eire andIceland, which are included under "Other ERP countries."

MAY 1949 485


May 1949


contrast with a large loss suffered in 1947, gainedalmost 500 million dollars in 1948. Of this gain,115 million dollars represented acquisitions of goldnewly mined in Canada, and the remainder wasthe accumulation of dollar balances. South Africa,whose holdings declined by 609 million dollars in1948, was the only major instance of a countryshowing a much larger loss than in the precedingyear. Argentina's loss in 1948, while amountingto 202 million dollars, was much less than in thepreceding year, and Venezuela showed an appre-ciable gain during 1948. Japan and several otherAsiatic countries added to their gold and dollarholdings in 1948, while China's dollar balanceswere relatively unchanged in 1948 after havingdeclined by 202 million in 1947.

To a large extent, recent changes in the goldand dollar holdings of foreign countries reflecttransactions of the respective countries with theUnited States, but in some cases there have beensignificant transfers arising from transactions be-tween one foreign country and another. In thelatter category was the loan of 322 million dollarsof gold by South Africa to the United Kingdom,which was consummated in February 1948. Partof the net decrease in South Africa's gold holdingsresulted from this transfer. However, if SouthAfrica continues to have large balance-of-paymentsdeficits with the United Kingdom, this loan maybe repaid in British goods rather than in gold, andthe transfer of gold may thus prove to have been,in effect, a prepayment for later shipments of Brit-ish goods.

United Kingdom sales of gold to the UnitedStates during 1948 were considerably greater thanthe amount of gold borrowed from South Africa.Some of the sales were to help in financing Britain'sdollar deficit during the early part of the year beforeECA funds became available, and some were madelater because ECA reimbursements necessarilylagged behind British expenditures. Toward theend of the year this lag diminished and there wasan increase in British dollar balances.

EFFECT ON THE UNITED STATES ECONOMY

The decline in United States exports and theincrease in imports both worked in the directionof restraining domestic inflationary tendencies in1948. As is shown in the accompanying table, thenet export surplus was the only component of the

gross national product that showed a decrease in1948. The decline, however, amounted to lessthan one-fifth of the combined increases in domesticconsumption, private investment (including inven-tory accumulation), and Government purchases ofgoods and services. In fact, the domestic demandfor many export commodities was more than suffi-cient to absorb the supplies made available as aresult of contraction in foreign purchases. Theaugmented United States imports did not com-pete with domestic products so much as they per-mitted United States production to expand as aresult of a better supply of imported materials.

GROSS NATIONAL PRODUCT, BY T Y P E OF EXPENDITURES

[In billions of dollars]

Type of expenditure

Private consumption expenditures1. .Gross private domestic investment. .Government purchases of goods and

service^Net exports

Total

1948

177.139.7

31.76.3

254.8

1947

164.230.0

26.211.3

231.7

Change

+ 12.9+ 9.7+ 5.5- 5.0

+23.1

1 Excludes net private remittances to foreign countries.2 Excludes net grants and other unilateral transfers to foreign

countries.NOTE.—Based on data from U. S. Department of Commerce,

Office of Business Economics.

Nevertheless, it is possible to view the declinein the export surplus as an important marginalfactor contributing to the change in the domesticeconomic situation during recent months. To someextent the decrease in the export surplus led toincreases in inventories or the filling of backlogdemands by domestic consumers. Although sucha development did not change the gross producttotal, its economic effect was far from neutral:it helped to set the stage for a new phase in whichproduction for inventory accumulation would di-minish and pressure of consumer demand wouldbe eased.

The considerable change in the method of financ-ing the export surplus also worked in the directionof holding down inflationary pressures. As indi-cated above there was a particularly large reductionfrom 1947 to 1948 in the portion of the export sur-plus that was financed by foreign liquidation ofgold and dollar holdings, as distinguished from theportion financed by United States Governmentgrants and loans. Generally speaking, if Govern-ment disbursements are being covered by taxationor by borrowing from nonbank investors, then the



May 1949


financing of an export surplus by means of suchdisbursements is less inflationary than if it werefinanced through an inflow of gold. The imme-diate monetary effect of a gold inflow, or of a re-duction in foreign deposits at Federal ReserveBanks, is to increase commercial bank reserves anddeposits; and, unless effective offsetting action canbe taken, the subsequent increase in bank loans andinvestments may be considerably greater than theamount of the gold (and dollar) inflow. In 1948the inflow of gold, along with the movement offoreign deposits at Federal Reserve Banks, added1.3 billion dollars to bank reserves as against 2.9billion in 1947. The expansionary influence of theexport surplus on the total money supply in theUnited States was therefore of much smaller pro-portions in 1948 than in 1947.

OUTLOOK

Progress toward a greater degree of balance wasmarked in the international accounts of the UnitedStates in the course of 1948. The export surpluswas reduced sharply without unduly restrictingthe flow of United States goods needed for economicrecovery and development in other countries.While it did not subject the United States economyto severe readjustment, the reduction in the exportsurplus contributed to the meeting of domestic de-mands and the leveling off of prices in the UnitedStates.

As foreign production continues to expand, fur-ther economies in imports from the United Statesand further expansion of shipments to this coun-try may take place. But in many countries pro-duction is not likely to rise as rapidly in the comingyears as it has during the past few recovery years.Increased production abroad from now on will restlargely on improved productivity and enlargedcapacity. Increased sales to this country will de-pend greatly on price factors and sales promotion.Under these conditions, further progress of for-eign countries toward international balance maywell be less rapid than during the past year. Con-tinuation of United States programs of foreign•economic aid—on a decreasing scale—is thereforeneeded to prevent disruption of the recoveryprocess.

Changes in business conditions in the UnitedStates have great influence on international eco-nomic relations. A slackening of demand in the

United States could, by reducing the dollarsavailable to foreign countries, handicap theireconomic recovery. At the present time, however,a substantial part of the dollar funds now avail-able to a number of foreign countries consists ofgrants or loans which, once appropriated by theCongress, are not subject to economic changes inthe United States to the same extent as are dollarearnings of foreign countries. Also, to the extentthat imports of certain foreign goods and serviceshave been limited by the available supply, the levelof such imports may be sustained even after demandin general has eased. Finally, a decline in theUnited States price level would result in dollarsavings for foreign countries and would help themto maintain the volume of their purchases in thiscountry in the face of reduced proceeds for theirexports.

These factors will tend not only to moderatethe influence of readjustment in the Americaneconomy on foreign economic conditions but alsoto exert a stabilizing influence on the level of eco-nomic activity in the United States.

As will appear from the following section, atendency toward internal stabilization is evidentin an increasing number of foreign countries.This development will undoubtedly create market-ing problems for some foreign producers, but itwill also help foreign countries to reduce theirimports and to make goods available for exportwhich were hitherto in strong domestic demand.On the whole, therefore, an end of the world-wideinflation, which characterized the immediate post-war period, should have favorable results for in-ternational balance-of-payments equilibrium. Thisis on the condition, of course, that the presentreadjustment does not deteriorate into serious de-pression and stagnation. This condition, in turn, islargely dependent on the adoption of appropriatedomestic economic policies, particularly in the fis-cal and monetary areas, but also on the speed andresoluteness with which the major trading countriessucceed in eliminating inefficiencies in productionand unrealistic price situations which still carryover from the war and early postwar periods.

UNITED STATES FOREIGN TRADE AND ECONOMIC

CONDITIONS ABROAD

While there was a decline in the over-all exportsurplus of the United States to the rest of the

MAY 1949 487


May 1949


world (and, conversely, reductions in the importsurpluses of most foreign countires vis-a-vis theUnited States), the changes in the United Statestrade position with different areas and individualforeign countries were by no means uniform, asis shown in the table on page 490.

Certain countries, such as Germany, Greece,Cuba, and South Africa, did not follow the generaltrend, but showed increased trade deficits withthe United States in 1948. Of the countries thatachieved reductions in their import surpluses withthe United States, a few succeeded in doing soprimarily by expanding their exports to this coun-try; such countries included primarily Canada,and also Chile, the Philippines, and the Nether-lands Indies. In most countries, however, the im-provement arose primarily from the reduction ofimports from the United States.

For many countries the improvement in thetrade balance with the United States meant a gen-eral advance toward greater balance in their ex-ternal relations. In a few countries, however,such as France, the reduction in the deficit with theUnited States was achieved primarily by creatingor increasing deficits with other areas, so that littleover-all improvement occurred.

For some countries, such as the United Kingdomand Italy, the reduction in import surpluses resultedfrom successful domestic anti-inflationary actionwhich reduced demand for imported goods andalso increased availabilities for export. In othercountries, primarily in South America, the cut-ting of imports by governmental action was neces-sary in view of the depletion of gold and dol-lar holdings, but the domestic effect was merely toeliminate a previously existing offset to inflationaryforces, thereby complicating the task of achiev-ing stability.

In all important trading countries, developmentsconcerning United States trade were intimatelyrelated to general balance-of-payments situationsand progress toward recovery and stability. Thesevarying relationships are brought out in the fol-lowing comments on the principal foreign areas.

ERP countries. The trend of United States tradewith most countries receiving aid under the Euro-pean Recovery Program was not markedly dis-similar from trade developments in other areas.Germany, Austria, Turkey, and Greece, however,showed increased trade deficits with the United

States in 1948. These four countries are in thespecial position of receiving considerable amountsof aid outside the European Recovery Programand increased their share in total United Statesexports from 6 per cent in 1947 to 11 per cent in1948. The remaining countries participating inthe program almost halved their trade deficit withthe United States and reduced their share in UnitedStates exports from 28 to 23 per cent.

Helped by a continued flow of American aid,the European economy was able to increase its out-put and overcome shortages, particularly of coal,that had hampered its recovery. Good harvestsin 1948 followed disastrous losses from freezingand drought in 1947. Progress was made in at-tacking key obstacles to independence from out-side aid. The United Kingdom substantially re-duced an external deficit which in 1947 had as-sumed huge proportions. Germany overcame thestagnation in output which had marked its econ-omy since the end of the war. Internal monetarystability was consolidated by Italy, and the pro-tracted French inflation appeared to have beenchecked toward the end of the year.

While the gold and dollar reserves of all thesecountries had been seriously depleted in previousyears, the progress made toward greater balance intheir external accounts generally kept their 1948deficits within the limits of United States aid.

The United Kingdom, after experiencing ex-treme imbalance in its international accounts in1947, made remarkable progress toward greaterbalance in 1948. Its trade deficit with the UnitedStates dropped from 898 to 360 million dollars.The United Kingdom has now raised its total ex-port volume far above, and reduced its importvolume far below, prewar levels, an effort neces-sitated by its losses of overseas income. Advancesin production, the maintenance of austere livingstandards, and the policy of effecting "disinflation"through a budget surplus share credit for thesenotable achievements. Despite the progress madein 1948 and even after the possible emergence ofequilibrium in the United Kingdom's aggregateexternal accounts, narrowing of the remaining dol-lar gap will require strenuous efforts. With somesigns that production is leveling off, further prog-ress is acknowledged to be largely dependent on acontinued expansion of exports of the sterling area



May 1949


toward the dollar area, and on the maintenance ofrigorous fiscal policies.

In France, the trade deficit with the United Stateswas reduced by one-third. This reduction wasmore than offset, however, by increased deficitswith other countries, particularly those in the ster-ling area. This shift was the outcome of consciousredirection of imports as well as of the currencyarrangement (adopted in January and terminatedin October 1948) which involved a greater devalu-ation of the franc in relation to "hard" currenciesthan in relation to "soft" currencies. France's fail-ure to achieve a better balance in its internationalaccounts was no doubt largely determined by con-tinued domestic inflationary pressures resultingfrom large investment expenditures, difficulties inapplying adequate fiscal and credit controls, andpolitical uncertainties. Shifting part of the deficitfrom the United States to other areas may facilitateimprovements in France's international accounts, ifthe monetary stabilization which has been achievedin recent months is further consolidated.

Italy's exports to the United States in 1948 weremore than double those of 1947. This helped toreduce Italy's trade deficit with the United Statesto a level lower than had been anticipated underthe first year of the European Recovery Program.As a result Italy was able to accumulate dollar bal-ances. Also, in contrast with France, Italy im-proved its trade position with other countries to thepoint where there was probably a surplus in Italy'snondollar balance of payments. To some extentthe improvement in the Italian position may havebeen temporary since it was largely caused by theinternal readjustment that followed the strong anti-inflationary action taken toward the end of 1947.The conjunction of internal deflation with the de-valuation of November 1947 provided an ideal en-vironment for the narrowing of the balance-of-pay-ments gap, although capital formation may havebeen retarded in the process.

The Netherlands, whose recovery problem is oneof the most difficult as a result of war losses anddisruption in trade channels, succeeded in reducingits trade deficit with the United States by aboutone-fourth. This improvement was partly offset byincreased merchandise deficits with other Europeancountries and with Indonesia. Total exports in-creased markedly from 1947 to 1948, but the over-all trade deficit declined only slightly. The Nether-

lands still has a long way to go before reachingexternal balance. The vigorous investment pro-gram which is being carried out within a frame-work of stringent direct controls is designed to in-crease production enough to achieve self-supportwithout a drastic cut in Dutch living standards. In-dications that the latent inflationary pressures hadbegun to abate during the latter part of 1948 per-mitted a significant cut in subsidies and broughtthe Netherlands a step closer to coordination of eco-nomic policy with Belgium.

The halving of Belgium's trade deficit with theUnited States from 1947 to 1948 resulted mainlyfrom a reduction in imports from this country.Belgium at the same time increased imports fromother areas (Latin America and Europe). However,exports to all areas expanded considerably and Bel-gium's total trade deficit was reduced from 631 to296 million dollars. This significant improvementoccurred during a period when inflationary pres-sures within Belgium were slackening considerablyor being reversed, thus increasing the relative at-tractiveness to Belgian producers of foreign as com-pared with domestic markets. Toward the end ofthe year a growing amount of unemployment, par-ticularly in consumer goods industries, began tocause serious concern in Belgium. This served toheighten interest in the implementation of a long-delayed program for capital development and mod-ernization. Belgium is now within reach of anover-all equilibrium in its balance of payments butthe financing of its dollar deficit still remains aproblem.

The trade deficit of the Scandinavian countrieswith the United States was only one-fourth as largein 1948 as in 1947, and exports covered over halfof imports. However, this remarkable improve-ment resulted almost entirely from a drastic cur-tailment of imports. Norway and Denmark madegood progress in expanding exports to the UnitedStates, but there was a sharp drop in Sweden's ex-ports of woodpulp and newsprint. Exports to therest of the world, however, were considerably in-creased, so that a substantial improvement also tookplace in the trade balance of the Scandinavian coun-tries with the nondollar area. Economic controlswere continued in force in the Scandinavian coun-tries and, together with a gradual absorption oflatent inflationary pressures through fiscal policiesand increases in output, contributed to the achieve-

MAY 1949 489


May 1949


ment of a more balanced internal and externalposition.

In an effort to reduce the lag of Western Ger-many's recovery behind that of other countries ofWestern Europe, the United States in 1948 sentmore exports to Germany than to any otherEuropean country. Consequently Germany's 1948deficit with the United States showed an increaseof 260 million dollars over the preceding year. Thisdeficit was financed mainly by funds appropriatedfor United States Army relief in occupied areas and,to a much smaller extent, by allocations from the

Economic Cooperation Administration. Owing tothe large volume of imports from the United States,Western German trade with the rest of the worldcould be kept approximately in balance. The in-crease in imports in 1948 made an important con-tribution to the spectacular recovery of the WesternGerman economy. Production reached a levelalmost twice as high as in 1947 but still only about75 per cent of 1937, after adjustments for changesin territory. Besides the considerable increase inforeign aid, the currency reform of June 1948 con-tributed importantly to the restoration of incentives

U N I T E D STATES MERCHANDISE TRADE, BY REGIONS AND SELECTED COUNTRIES a


Region and country

Europe

United KingdomFranceItaly and TriesteNetherlandsBelgium and LuxembourgDenmark, Norway, and SwedenGermany (all occupied zones). .GreeceAustriaSwitzerland

ERP countries2

Poland and Czechoslovakia. . . .U S S R

Latin America 3. . .

ArgentinaMexicoBrazilChileColombiaCubaVenezuela

Asia

PhilippinesJapanIndonesiaIndia and PakistanBritish MalayaChina

Africa

Union of South Africa

Canada and Newfoundland

Oceania

Australia . . .

Total

Exports from U. S.(Including re-exports)

1948

4,285

644591428313310257868239146171

4,191

7628

3,356

379518498105197441516

2,094

468323

92315

82240

785

492

1,946

153

114

12,618

1947

5,683

1,103817500384535623582167108195

5,292

157150

4,069

680629643125219492427

2,338

440423104401

66354

822

414

2,113

320

236

15,345

Per-centagechange

- 2 5

-42- 2 8- 1 4- 1 8- 4 2- 5 9+49+43+35- 1 2

-21

- 5 1- 8 1

- 1 8

- 4 4- 1 8- 2 3- 1 6- 1 0- 1 0+21

- 1 0

+6- 2 4- 1 1-22+25-32

- 4

+ 19

- 8

-52

- 5 1

- 1 8

Imports to U. S.

1948

1,092

28573944489

13131199

105

956

2479

2,482

180247514179236374273

1,332

2276375

292270120

407

135

1,593

164

129

7,070

1947

819

20547442759

1206

174

83

697

2477

2,253

155247446122206510174

1,049

1623534

254284116

327

112

1,127

156

125

5,732

Per-centagechange

+33

+39+55

+ 113+65+52+9

+383+ 16

+ 100+26

+37

- 4+2

+ 10

+ 17

+46+ 15-27+57

+27

+41+78

+ 124+ 15

+4

+24

+21

+41

+5

+3

+23

Excess of U. S.exports

1948

3,194

360518333270221.12683722013767

3,235

53- 5 1

874

199272

- 1 6- 7 4- 4 0

67244

762

240260

1723

-188120

379

357

353

- 1 1

- 1 5

5,548

1947

4,864

898770455357476503575150103111

4,596

13373

1,816

526382198

313

- 1 8253

1,289

278388

70148

-218238

494

302

986

165

110

9,613

Change inforeign

country'strade

balancewith U. S.

+ 1,671

+539+252+ 122+88

+255+377-262

- 7 0- 3 4+45

+1,361

+80+123

+942

+327+ 111+214+77+53-84+9

+527

+37+ 127+53

+ 125-30

+ 118

+ 116

-55

+634

+ 175

+ 125

+4,066

1 Computations made prior to rounding of 1947-48 figures.2 Includes Turkey, but excludes overseas dependencies of ERP countries.3 Includes Central and South America, the Caribbean area, and Mexico.NOTE.—Totals for regions include countries for which separate figures are not given.

490 FEDERAL RESERVE BULLETIN:


May 1949


and improvement in efficiency in production anddistribution.

Eastern Europe. Owing to the sharp reductionin United States exports to Eastern Europe, espe-cially after the imposition of additional export con-trols in March 1948, the trade of that area (includ-ing the U.S.S.R.) with the United States was almostbalanced in 1948, in contrast with the large deficitsof previous years. Imports from the United Stateswere reduced by 260 million dollars while exportsincreased slightly. The Soviet Union had an ex-port surplus of 51 million dollars in trade withthe United States. Trade of Eastern Europe withWestern European countries and their overseas cur-rency areas expanded in value, due largely to in-creased exports of grain, coal, and timber and woodproducts, but was still much below the prewar vol-ume. On the other hand, trade within EasternEurope increased sharply, both as a result ofplanned reorientation and because of extraordinarydemands for grain from the U.S.S.R. by the satellitecountries.

Latin America. The Latin American republics asa group continued in 1948 to have a trade deficitwith the United States, but the magnitude of thisdeficit was only half that of 1947. Imports by the20 republics fell by 18 per cent and exports in-creased by 8 per cent. With few exceptions theLatin American republics, their wartime accumu-lations of gold and foreign exchange greatly re-duced, found it necessary during 1948 to takeadditional measures to reduce their imports. Sup-ported by high levels of money income and ex-panded programs of public and private investment,the pressure of domestic demand for imports inLatin America remained at a high level. To someextent the reduction in imports from the UnitedStates was offset by an increase in imports fromEurope, particularly the United Kingdom. Al-though most of the Latin American republics con-tinued to utilize gold and dollar reserves accu-mulated during the war, the over-all depletion ofthese reserves during 1948 was only about one-sixthas large as in 1947.

Improvement during 1948 of the trade posi-tion of Latin America as a whole with the UnitedStates was due largely to the reduced trade deficitsof Argentina and Mexico, and to the re-emergenceof an export surplus with the United States for

Brazil, Chile, and Colombia. Cuba, on the otherhand, shifted from a trade surplus to a trade deficit.

Through more stringent control of imports, Ar-gentina reduced its trade deficit with the UnitedStates by more than 325 million dollars in 1948.During 1946 and 1947 Argentina had spent a con-siderable part of its gold and convertible foreign ex-change in order to sustain a very large volume ofimports from the United States. Unable to convertreceipts from exports to Europe into dollars andfacing also the prospect of lower prices for grain ex-ports, Argentina found it increasingly difficult toimplement an ambitious program of economic de-velopment, and in 1948 the Argentine Governmentconsequently took steps to check inflation.

Mexico's trade deficit with the United States wascut by about 100 million dollars, primarily byapplication of import prohibitions and import li-censing. Devaluation of the peso in July 1948 wasa supporting factor. Despite the apparent stabilityof domestic prices in the second half of 1948,Mexico still has the problem of correcting theserious imbalance of its international accountswhich has developed since the war.

Brazil, Chile, and Colombia all replaced large1947 trade deficits with the United States by tradesurpluses in 1948. All three countries restrictedimports from the United States and succeeded inobtaining more imports from soft-currency areas.Colombia supplemented import controls by ex-change rate depreciation in December 1948. Someeasing of inflationary pressures was noted in Brazil.

Among the United States' major trading part-ners in Latin America, only Cuba and Venezuelaadopted no general measures to reduce imports in1948. These countries had not been subject to thepostwar dollar shortage because their leading exportcommodities, sugar and petroleum, were excellentdollar earners.

Cuba's trade deficit with the United States in1948 was the result of a precipitous drop in sugarexports to the United States, which resulted partlyfrom the reintroduction of import quotas on sugarentering the United States. However, the declinein exports to the United States was largely offsetby increased exports to Europe and other areas, fi-nanced in dollars.

Venezuelan trade with the United States con-tinued to expand and gave rise to a slightly lowerVenezuelan import surplus in 1948 than in 1947.

MAY 1949 491


May 1949


Since, however, a substantial portion of Venezuelanoil is indirectly received in the United States viaCurasao, the data do not fully reflect Venezuelantrade relations with the United States. Venezuelaalso obtains dollars from shipments to other areas.Partly because of substantial additions to UnitedStates direct investments during 1948, Venezuela ap-pears to have accumulated about 130 million dollarsin gold and foreign exchange reserves during theyear.

Asia. Most countries in Asia, with the exceptionof the politically disturbed areas of China, Indo-China, and Burma, improved their trade positionswith the United States during 1948. Some of thecountries, however, which formerly showed tradesurpluses with the United States, have had deficitssince the end of the war. This group includes, forvarious reasons, India, the Philippines, and theNetherlands Indies. The deficits in dollar trade,both of these countries and of others like Japan andChina (which did not have surpluses before thewar), were reduced in 1948.

The trade deficit of the Philippine Republic withthe United States was only moderately smaller in1948 than in 1947. United States Government ex-penditures in settlement of war-incurred obligationscontinued to provide large amounts of dollars tothe Philippines, and also contributed to an ex-pansion of the internal money supply. Philippineimports, which are largely obtained from theUnited States, increased further in 1948. Littleprogress was made toward diversification of Philip-pine trade, which still depends heavily on copra,abaca, and sugar exports to the United States.

Japan's trade deficit with the United States wasreduced by one-third, principally as the result ofimport cuts accompanying the growth of Japaneseimports from nondollar areas. The Japanese Gov-ernment budget remained unbalanced, and therewas a substantial further rise in monetary circu-lation and prices. Unstable domestic economicconditions contributed to Japan's failure to makesignificant progress in expanding its export trade.The use of a pricing system equivalent to multipleexchange rates was found to be unsatisfactory andhas recently been superseded by the establishmentof a single exchange rate.

Indonesia almost eliminated its trade deficit withthe United States in 1948, principally by more thandoubling its exports. The quantities of rubber, tin,

and copra exported to the United States were sub-stantially increased, but lower prices were receivedfor rubber than in 1947. The serious politicaldisturbances in Java and Sumatra prevented generaleconomic recovery in the area.

Siam, which is more advanced in recovery thanmost of the countries of Southeast Asia, had tradesurpluses in 1947 with the United States and othercountries. Because dollars were earned by ship-ments of rice to China and Japan as well as by in-creased exports to the United States, Siam achieveda substantial surplus in its 1948 dollar balance ofpayments.

Ceylon also reduced its imports from the UnitedStates significantly, and, with funds received forexports, became a substantial contributor to thesterling "dollar pool" in 1948. Ceylon financedits trade deficits with other countries by sales ofdollars to the United Kingdom, and increased itssterling balances.

In India and Pakistan the trade deficit withthe United States was greatly reduced in 1948.This change was due chiefly to tighter licensing ofimports from hard-currency sources, undertaken inorder to keep within the limits agreed in 1948 be-tween the United Kingdom and India and Pakistanfor conversion of their unblocked sterling into dol-lars. In consequence of the growing availability ofimports from nondollar areas, India and Pakistanhad much smaller export surpluses than in 1947in their trade with other countries.

Malaya's total exports in 1947 were already largerin physical volume than before the war, and Malayahas therefore been a very important contributor tothe sterling area "dollar pool." In 1948 a 25 percent increase in Malaya's imports from the UnitedStates, accompanied by a slight decline in ex-ports to this country, caused its export surplus intrade with the United States to decline moderately.Nevertheless, this export surplus was still nearly 200million dollars.

China's trade deficit with the United States wascurtailed because of depletion of its dollar balancesin previous years and termination of UNRRA as-sistance. Continued aid was provided for the im-portation of food and essential materials undervarious aid programs.

Other British Commonwealth countries. The great-est single contribution to the narrowing of theUnited States export surplus in 1948 was made by



May 1949


Canada, mainly through a spectacular expansionin Canadian exports to the United States from1,095 million dollars in 1947 to 1,554 million in1948. This expansion, which resulted largely fromincreased United States purchases of cattle, news-print, and aluminum, accounted for over one-third of the total increase in United States imports.Along with reducing its import surplus from theUnited States, Canada reduced its export surpluswith the United Kingdom and other areas, so thata greater degree of bilateral balance was realized inCanada's external accounts. The improvement intrade relations with the United States, and thefinancing of a part of Canadian shipments toEurope through ECA funds, made it possible forCanada to recoup part of the gold and United Statesdollar holdings lost in 1947. These developmentswere greatly assisted by the import controls estab-lished in November 1947 and by the response ofCanadian banks to the Bank of Canada's recommen-dation, issued in February 1948, that they refrainfrom financing capital expenditures. As a result ofthe improved foreign exchange position and theeasing of heavy postwar investment pressures, bothimport and credit controls were recently relaxed.

South African imports from the United States

reached record levels in 1948, and led to seriousbalance-of-payments difficulties in the latter partof the year. To stop the persistent and acceleratingdrain on gold and dollar reserves, the Union inNovember 1948 introduced import controls de-signed to cut the total dollar deficit and to reducethe proportion of consumer and nonessential dollarimports in favor of capital goods required to sup-port a substantial investment program. The lackof balance in South Africa's economy found furtherexpression in a large current sterling deficit which,in spite of a sizable inflow of capital from theUnited Kingdom, led to a sharp reduction in ster-ling holdings in the course of 1948.

In Australia and New Zealand, as a result ofmeasures intended to save dollars, imports from theUnited States were reduced by more than one-halffrom 1947 to 1948. This reduction occurreddespite a substantial rise in total imports; thus, in1948 the United States supplied only 11 per cent oftotal Australian imports compared with 25 per centin 1947. The rigorous curtailment was the resultof Australia's desire to assist the United Kingdomby keeping to a minimum the dollar drawings fromthe sterling area "dollar pool."

MAY 1949 493


May 1949

Documents

Movement Toward Balance in International Transactions of