Best Quarter

Gold and U.S. dollars are bouncing back into Britain. Last week Sir Stafford Cripps told a happy House of Commons that his working dollar reserves for the worldwide sterling area were $2.42 billion, compared to $1.34 billion just before sterling was devalued last September. In the second quarter of 1950, Britain had a surplus of $180 million; the same quarter of 1949 ran up a deficit of $632 million. Thanks to $240 million of ECAid and $18 million from Canada, British reserves had climbed $438 million--by far the best quarterly gain since the war.

Britain's own exports earned only about as many dollars as they did before devaluation. But the sterling bloc for which London acts as banker did much better: U.S. buyers eagerly snapped up its raw materials despite rising prices. The rest of the gain resulted from 1) fewer dollar imports to Britain, 2) larger invisible earnings (shipping, insurance, tourists) and 3) more gold flowing to Britain from South Africa on trade.

Cripps, who likes to play Cassandra, reminded his hearers that before World War II Britain's dollar assets were around $10 billion. "Reserves," said Sir Stafford, "are still far below the level that is necessary to enable us to face with equanimity all the sudden and substantial changes in external conditions which may take place."

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