I will give the right hon. Gentleman all the details on this when a Question is asked. He himself said that we broke off negotiations last July, because of the Soviet financial terms; and then we swallowed the whole in December. To have accepted those terms in July would have involved a great loss of dollars, because we should have had to pay for the grain in convertible sterling. By December the trade between the two countries was balanced and payment was on a sterling basis.
I would say a few words about the general overseas trade position, against which these agreements must be set. Hon. Members in all parts of the House have agreed that the problem of export trade is a matter of life and death for this country. It is a problem which has changed its size and nature since before the war. I am not suggesting that before the war the export trade was not important. It was highly important. If we managed to secure another export market, or open up an overseas market which was closed to us, it meant making a small dent in the mass of unemployment in the development areas.
That was well worth doing, but today, of course, it is far more vital. It is absolutely vital today as a means of paying our way abroad and enabling us to stand on our own feet. Even in 1938, as the House well knows, we were not paying our way. For one thing, no one could pretend to have been satisfied with the volume of imports we had in that year. With one-third of the people below the poverty line, a large part of the population could not afford to pay for many of the things that we were importing, particularly food. If there had been full employment, decent wages and adequate social services, we should have needed far more food than actually we had in 1938. If we had had full employment, we should have needed far more imported raw materials. Therefore, the actual imports in that period were very much less than the country really needed. Even so, with an economic policy which was based on scarcity in the middle of the world of plenty, we still had difficulty in paying our way abroad.
Even though one-fifth of our total imports were paid for by the process of sitting back and living on investments accumulated in a bygone age, we were still, in 1938, "in the red," to the tune of some £70 million. That is to say, that about one-twelfth of our total imports were paid for in that year by living on capital, a thing which hon. Gentlemen opposite will be the first to agree is not in accordance with the best business practice. Our staple export industries were running into worse and worse difficulties just before the war, coal exports having fallen from 44 per cent. of world shipments to only 37 per cent. in four years. In 1938 cotton exports were the lowest for 90 years. With these things happening, we were in 1938, under vastly easier conditions, running into a very severe balance of payments crisis.