FOREIGN RELATIONS, 19 5 0, VOLUME '


   In mid-1949 the United Kingdom took certain measures for further
 reduction of imports by intensifying restrictions, with which we are
 -all familiar. It redoubled its efforts to increase exports to the dollar
 ýarea, and on September 18, 1949, devalued the pound sterling in
terms
 ,of gold.
   Since that time, the story has been quite different. By the end of
1949 the gold and dollar reserves had reached $1.6 billion, by the end of
March 1950 had surpassed their level of a year before, and by Septem-
ber 30 of this year reached $2.7 billion, the highest figure in over ten
years.
   These reserve movements reflected a sharp and steady improvement
 in the current balance of payments of the United Kingdom. In the last
 quarter of 1949 the sharply reduced trade deficit of the metropolitan
 United Kingdom was almost balanced by the surplus of the dependent
 overseas territories and gold purchases from the sterling area, so that
 the unfavorable balance was down to an annual rate of $12 million.
 In the first half of 1950 the United Kingdom ran a surplus on current
 account at an annual rate of $390 million, which probably represents
 a higher rate in the latter part of that period. Since then there is every
 indication that this surplus has mounted.
   While the reserve figures I have cited reflect the extraordinary fi-
nancial assistance provided to the United Kingdom by the United
States, Canada and others, the balance of payments figures which I
have given represent current transactions alone and do not include such
assistance.
   On Wednesday, the President of the Board of Trade had further
 encouraging news in reporting on the export and import figures of the
 United Kingdom, exclusive, in this case, of those of the dependent
 overseas territories. He revealed that the exports of the United King-
 dom as such for the month of October were the highest in history, both
 in total and to the dollar area. For, I believe, the third time in almost
 a century the United Kingdom alone had a visible surplus in overseas
 trade. Exports to the dollar area in !October significantly exceeded
the average for the third quarter of 1950 and substantially exceeded
the average for the first six months of 1950, thus continuing the
upward trend.
   This is indeed a magnificent effort by the United Kingdom Govern-
ment and people. They are to be congratulated on having accomplished
such results in face of the many difficulties which we all know had to
be met and overcome.
   We are also glad to note that the principal favorable -factors which
have contributed to this result do not appear to be transitory, but
rather to be of a fundamental character which may be expected to


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