1946] THE BALANCE OF. PAYMENTS OF THE UNITED STATES 9

will be convenient to deal with separately) ? Apart from interestcharges and dividend income, the United States had before the waran adverse balance in excess of $500 million, the principal itemsof which are given in the following table :—

Table VIII

U.S. Balance of Payments on Invisibles (Other than Dividends

and Interest)(Average 1936-39)

Receipts.

Payments.

Net.

Shipping and freight ....

241

321

- 80

Travel......

129

309

-180

Personal remittances ....

31

159

-128

Institutional contributions (net) .

—

—

- 35

Government aid and settlements .

2

22

- 20

Other Government items

34

83

- 49

Silver .......

10

131

-121

Miscellaneous adjustments and services

(net) . . .

—

'- '■:

+ 85

Net total ....

—

—

-528

American statisticians are expecting a substantial increase inthis adverse balance, and rely on this, more than on any otherfactor, for the maintenance of equilibrium. The pre-war adversebalance in respect of shipping may be reversed, but not perhapsby as much as some people tliink. The great increase of American -owned tonnage is mainly concentrated in a few specialised types,and a very great part of it will, according to present plans, bescrapped, laid-up or otherwise disposed of. American costs, bothof building and of running ships, are very high compared withour own. Overseas Government expenditure, on the other hand,will certainly be much greater.

American forecasters are, however, mainly influenced in reach-ing their conclusion by the expectation of a very great increasein tourist expenditure. Before the war their gross payments outon this ground were of the order of $300 million. It is believedthat after the war this expenditure will reach at least $1 billion,and even such figures as $2 billion are spoken of. Those whoknow the present state of hotel accommodation here and inEurope are likely to consider these figures greatly over-estimatedin the short run. But in the long run, if we take adequatemeasures to develop the tourist industry up to its full poten-tialities, this source of overseas income, both here and in Europe ,may be very great. Moreover, even in the short run American