8

THE ECONOMIC JOTTBNAL

[JUNE

period 1932-38 as a magnified reflection of changes in the levelof U.S. industrial production, or rather, as it should be read inthis context, in the level of internal prosperity. Whatever vicis-situdes one may foresee for American prosperity, it is certainthat the public demand for vigorous Government action to meetany serious or prolonged unemployment will be intense. Whenthe outside world has recovered its capacity to supply, importsof $6 to $8 billion on the above price assumption would seemquite reasonable. U.S. imports averaged $4 billion in the decade1920-29 at the prices and level of national income then prevailing.They are running currently in the neighbourhood of $5 billion atpresent prices.

Exports, at the average level immediately before the war, onthe same price assumption would be a little more than $6 billion.Here also the American experts expect a higher figure, variousestimates up to as high as $10 billion being current. In the secondhalf of 1945 American exports, which were still dominated byLend-Lease, were running at an annual rate of $8 billion. TheU.S. Secretary of Commerce, Mr. Henry Wallace , in his evidenceto the Senate Banking Committee during the hearings on theBritish Loan on March 12, 1946, estimated the total foreignrequirements from the U.S. in 1946 at $10,728 billion. A figureof $10 billion might well be reached in the early years, whenoverseas lending by the United States in the shape of tied loansis on a large scale; for the loans in many cases create, and arethe necessary condition of, the exports. It is not clear, however,that this figure will be easily reached without the assistance oftied loans or subsidies, in view of the fact that the prices of Ameri-can agricultural produce and raw material now stand over a'wide field above world prices. Moreover, industrial wages in theUnited States are already two and a half times the British level,and are rising more rapidly. There is certainly a potential dangerfrom a policy of export subsidies. But extensions of this policyare frowned upon by the State Department , and will be strictlyregulated if the proposals of the projected International TradeOrganisation come into operation.

Perhaps the reader may be left for the moment to form hisown judgment, in the light of the above, of the most probableorder of magnitude of the American favourable balance of visibletrade in the post-war environment. An average of $2 to $3 billiona year over a period of years beginning in 1947 looks to me fullyhigh on the basis of present expectation.

What about the invisible items other than interest (which it