That question is simplified if revenue and capital factors are considered independently. So far as the Position on income account is concerned, we know that the United States has recently developed a considerable export surplus, end that our own balance of payments has become increasingly adverse. This is no proof that the current rate of exchange would prove untenable in the long run. The shift in the American balance of trade occurred while the rate was very much bieber than at present. Indeed, the chief reasons for it had little or noti do with rates of exchange, since it was due mainly to the maintenance ^f Americin exports by rearmament veouirements throughout the rest of the world at a time when Amei imports were halved as a result of taling commodity prices and he depression in American industry. Moreover, the strength or weakness of sterling depends not en the balance of payments in this country alone, but on that of all the countries in the sterling area. In these circumstances, it is not only extremely difficult but also largely irrelevant to discover a parity between the two currencies based on costs end prices in the two areas. We can. however, assume. with some confidence, that the American ex-nort surplus is tending to decline. Admittedly, in October the United States export surplus, which had hewn a substantial fall from June to September, once again rose to $100 million. But this is the American export season, and the surplus of exports at this time has en been large, even in years which showed an import surplus for the earlier months, It seems reasonable to suppose, then, that from the beginning of next year the U.S. trade balance (especially if recovery continues) will again be nearing equilibrium At the same time, our. own import surplus is falling rapidly—so much so that any worsening of cur balance of payments this year wil be confined to the invisible items.
Text read from the printed page and cleaned; old type leaves the occasional error.