§ A year ago I told the Committee that the sterling area must as a whole be at least in balance with the rest of the world. As the Committee already knows, the sterling area converted a huge deficit in the year ending 30th June, 1952, into a surplus of over £400 million in the following year. This was a remarkable achievement, of which we members of the sterling area, who gathered together recently at Sydney, felt justly proud.196
§ This recovery was due mainly to the adoption of sound internal measures. But it was also, in part, due to the drastic import restrictions imposed by all sterling area countries following the crisis of 1951. As these emergency restrictions are, rightly, being removed, we must expect the surplus to fall from this high rate, especially in the second half of the year, which for seasonal reasons is usually less favourable to the sterling area's earnings, and also contains the capital and interest payment on our debts to Canada and the U.S.A. The surplus in the second half of 1953 has now been provisionally estimated at about £100 million, and for the year as a whole at some £320 million.