External Finances and the Balance of Payments

Part of Financial Statement – in the House of Commons on 25th April 1944.

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There is another side to the story—the drain upon our resources of the external costs of the war. We have to meet vast and growing cash expenditure in other countries for military operations and supplies. To finance our purchases in the United States before Lend-Lease, and to meet these external costs, we have already parted with overseas assets to the extent of £1,000,000,000, and we have incurred undischarged overseas liabilities amounting to £2,000,000,000. We are not yet at the end of this tale. We have parted with all this, not to neutrals, but nearly all of it, some 90 'per cent., to our Allies and associates, most of whom will emerge from this war with their overseas financial position greatly strengthened as a result, just as ours is greatly weakened. I make no complaint of this, for we are in this war with all we have got, but no one must suppose that a country can wage a war on this basis for several years and emerge at the end without a price to pay. We have not yet paid that price.