The recent proposals for financial and economic agreementswith the United States have raised doubts in many quarters ontwo largely distinct matters. The first relates to our capacity toachieve an adequate increase in the volume of our exports. Thesecond relates to America 's capacity to accept goods and servicesfrom the rest of the world on a scale adequate to secure a reasonableequilibrium in her overall balance of payments. Both these issuesrelate to the position of ourselves and of the United States respec-tively in relation to the rest of the world taken as a whole. On theassumption, however, that the International Monetary Fund andother supporting arrangements will be successful in establishingmultilateral clearing of current transactions over a wide area,bilateral equilibrium will be achieved between the United King-dom and the United States , if the two conditions are fulfilled thatBritish exports of goods and services to the rest of the world as awhole reach an appropriate level and that American imports ofgoods and services from the rest of the world as a whole reach anappropriate level. If these conditions are satisfied, there will beno necessity for a strictly bilateral balance between the twocountries taken in isolation.
This article is solely concerned with the available statistics re-lating to the second of these two problems—namely, the balanceof payments of the United States . It is dangerous in this, as inmany other contexts, to project pre-war statistics into the sogreatly changed post-war world. But some current conclusionson the matter may be based too much on general impressions andtoo little on an examination of the details, with the result that theproblem is not seen in the right perspective, that the orders ofmagnitude involved are not rightly apprehended, and, as a result,that the difficulties ahead of us are exaggerated. The objectof this article is not to make definite predictions, but to bring outsome of the data which are required for an informed judgment,as the prospects of the future gradually unfold themselves.
Let us begin with the figures of the pre-war position. Thefavourable balance of the U.S. year by year from 1930 to 1938on all current transactions ran as follows :—
$ million.
$ million.
19301931193219331934
+ 735+ 175+ 159+ 108+ 341
1935 .
1936 .
1937 .
1938 .
-156-218- 31+ 967