The Significance for American Policy of British Reserve Losses in 1951-1952

Abstract

The facts of the startling change in the British economic position between June, 1951, and June, 1952, are well known, but the implications for American economic policy have not been properly examined. American international economic policies in the post-war period have been based upon the assumption that a restoration of relatively free multilateral trade within a relatively short period was both possible and desirable. While there has been no change in opinion regarding the desirability of trade liberalization, the progress toward its realization has met with one check after another. The British balance of payments developments in the twelve months following June, 1951, were so extreme that the underlying assumptions regarding the possibility of achieving our basic international economic policy in the near future, and the best methods of procedure, must be re-examined.