Sagging Prop

The extraordinary excess of U.S. exports over imports, said President Truman in his midyear economic report to Congress, is one of the temporary props under the U.S. economic system. Last week, the Department of Commerce released figures showing that the prop had begun to buckle. Since the war's end, exports had been steadily increasing until they reached a rate of $17 billion a year. But in June they suddenly sagged 13%, the first big postwar decrease.

Was this the beginning of the end of the export boom? Some exporters thought it might be. They had watched import restrictions and licensing systems mushroom all over the world. In its Monthly Review, issued last week, the Federal Reserve Bank of New York told why.

Gold and dollar holdings of all foreign countries (except the Soviet Union), said the bank, now amount to $18 billion, up $4 billion over 1939. But a large part of this hoard is immobilized in private hoards or as currency reserves. And nations which need gold and dollars least hold the most. An example: liberated western Europe has less than half of its prewar stock of $5.4 billion. But well-fed, well-clothed Switzerland alone holds $1.4 billion of the Continent's hoard.

Foreign traders hoped that U.S. loans under the "Marshall approach" would bolster exports. But the nations which have been buying the bulk of U.S. exports--Latin America and Canada--are outside the scope of the plan. They would be helped only indirectly through trade with those who might get loans. But any loans were too far in the future to be of any immediate help. This week, the British Government, convinced that no U.S. relief was in sight this year, is considering cutting its imports by another 25%.

This file is automatically generated by a robot program, so reader's discretion is required.