The balance of payments in the inter-war period

Quarterly Bulletin 1972 Q3
Published on 01 September 1972

This research paper was prepared in the Bank's Economic Intelligence Department and is largely the work of M. D. K. W. Foot

Under the Bank's auspices, Professor R. S. Sayers is preparing a history of the Bank in the first half of this century. Certain research projects have been undertaken in the Bank to provide background material for his work, one of which gave rise to this article. Up to now, a number of interesting studies of this period have touched upon various aspects of the balance of payments. But there has not been a comprehensive review of the statistics collected then, nor a detailed analysis of the weight which can be attached to them; this is a gap which this article is intended to fill.

Until very recently, there had also been no attempt to bring more than isolated elements of the balance of payments accounts for the period up to date, by drawing on the evidence which has become available since 1939. This seemed another deficiency worth remedying; but the publication, late in July, of new research in this area has delayed the completion of a comprehensive revision of the original balance of payments estimates. It is hoped to make this available in a later issue of the Bulletin.

The picture given by the material presented below is, at first sight, surprising. At the beginning of the period virtually no statistics on the balance of payments were collected at all and, even by 1939, coverage was still very inadequate. We have become accustomed to having a wide range of reasonably accurate and up-to-date information readily available. But this multiplicity of figures is essentially a post-1945 phenomenon. In contrast, when the Royal Statistical Society petitioned the then Board of Trade (B.O.T.) in 1919 for an improvement in the quality and quantity of official data, one of their complaints in a different field of economic information was that nothing had been gathered on wages for thirteen years.

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