Britain's balance-of-payments problem and the devaluation of 1949
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The British balance-of-payments problem appears to defy not only permanent solution, but, at this time, also precise analysis. This study does not offer a solution, nor does it seek one. It merely describes the nature of the problem and its impact on Britain's external financial position. This study does not make an exacting analysis of all the factors in the British problem and of their relative importance, nor does it attempt to do so. It only shows the various trends which the development of the Problem has taken up to its present condition. The original object of the thesis was solely to analyse the effects of the 1949 devaluation on Britain's external trade. After partial study of this subject, it became apparent that the devaluation was too recent for such an analysis to be accurate. It would have been extremely difficult, if not impossible, to assess all the factors affecting British trade following devaluation and to determine what degree of influence could be attributed to devaluation and what degree to extraneous factors. The original project was, therefore, abandoned, and a more general discussion of Britain's balance-of-payments problem was undertaken. Two chapters have, however, been devoted to sterling devaluation. Chapter III deals with the background of the 1949 action. Chapter IV shows the direction taken by British trade in the first year after devaluation; but it attempts merely to determine whether the objectives of the devaluation were achieved, rather than to make an accurate mathematical measurement of the effects of devaluation on British exports and imports.