Scotsman Archive

Economic crisis of 1949, 25 May 1950

THE year 1949 was a year of economic crisis – the most serious in a succession of crises since the war. In the third quarter of the year a marked deterioration took place in the position of our balance of payments, which led to devaluation of the pound in September. The extent to which we have been living since the war on the proceeds of gifts and loans from the USA and Canada has never been adequately understood, but the crisis brought us face to face with the reality of our position.

From the beginning of 1947 to devaluation the gold and dollar deficit of the sterling area reached the very large total of $7.3 billion. This has been met by American and Canadian credits and Marshall Aid to the extent of $5.35 billion, by the International Monetary Fund to the extent of $725 million and as regards the balance, from our gold and exchange reserves – Lord Bilsland, chairman of the Union Bank of Scotland, in the annual report.

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