America's International Accounts
BEFORE TAKING up the discussion of America's international economic policies during the interwar period, we shall present a brief analysis of the American balance of payments in this period. Our purpose will not be to give a systematic account of the international transactions of the United States,1 but rather to comment on certain aspects which will assist in the analysis of the policies which emerged in this period. Also the interwar experience should provide some help in analyzing the problems of the present and in indicating what policies ought to be followed in order to achieve a more balanced world economy.
The first three postwar years were characterized by a large export surplus on merchandise account, which was settled largely by governmental loans, governmental grants and personal remittances, and gold imports. The depression of 1920-1921 sharply reduced imports, but they recovered rapidly in 1922 and thereafter reached a peak in quantitative terms in 1929. It is commonplace to say that during the period from 1922 to 1929 United States international accounts were in a precarious state of balance. It is worth noting, however, that in 1922, 1926, and 1927 current payments, including net private remittances, plus net long-term capital outflow, exceeded current receipts.2 Over the period from 1922 to 1929, the aggregate United States surplus on current account, including unilateral transfers, amounted to $5,737 million and net long-term capital outflow aggregated $4,678 million, or an average of $585 million per year. Gold production outside the United States averaged around $350 million per year, and since this is a normal export of large gold producers such as South Africa, it would be expected that the United____________________