The Dollar Balance
The central point of Monday's Treasury statement on the dollar balance was that in the three months ended September 3oth the sterling area paid out £76,000,000 more, in gold and dollars, than it received. In the welter of statistical comparisons that central point must never be forgotten—an adverse balance of £76,000,000. Never- theless comparisons really do brighten the picture. In the first quarter of this year the deficit was nearly twice as big—£47,000,000. And the balance of dollars now due to this country under E.R.P. is more than enough to wipe out the deficit altogether, always provided that we are able to find suitable goods on which to spend the dollars due. The Treasury, with that bright optimism which—much against traditional character—it now brings to the subject of the balance of payments, has called this " an exceedingly happy position." It is not quite that. But it woud be perfectly true to say that the past six months or so have revealed a very promising tendency in the dollar balance. If the tendency is maintained then a happy position should be reached some time next year—a position in which the gold and dollar income of the sterling area would equal its gold and dollar outgoings without the support of E.R.P. But it is still a big " if." The recent progress towards a healthy balance has been to a considerable degree achieved by stern economies in dollar expenditure by the members of the sterling area. There is not much scope for further cuts of this nature. The substantial rise in British exports in the past year has also helped ; but such a rise cannot be maintained without a corresponding rise. in total production, of which there have been few signs lately. And the E.R.P. Santa Claus will not always be there. A cold dawn is coming in which he will be revealed as an ordinary parent insisting that certain of the gifts shall be passed on to the poorer countries of Europe and pointing out that about a quarter of this year's E.R.P. allocation to Britain was not a gift anyway, but a loan. If the British dollar account is soundly balanced when that time comes then the position really will be happy. But several years of hard work must come first.
Previous page
