I. THE EXTENT OF THE DECLINE
THE total value of world trade in 1932 was less than 39 percent of what it had been in 1929. Except for seasonal variations it had declined continuously from the end of 1929 to the third quarter of 1932; in that quarter its value was little more than a third of what it had been in the corresponding quarter of 1929. A seasonal recovery in the last quarter of 1932 brought the percentage up again to the average for the year. But preliminary figures for the first quarter of 1933 show a further heavy fall, which threatens to bring the total down to new low levels.
These estimates are based upon the statistics of forty-nine countries which account for about 90 percent of the total value of world trade. In order to eliminate exchange fluctuations, national currencies have been converted into gold dollars at average monthly rates. The decline therefore represents in part a heavy fall in gold prices; but it reflects also a substantial fall in the actual quantum of imports and exports. There has been a fall of over 25 percent in the quantum and of about 50 percent in the average price level; so that the exchange of three-fourths of the 1929 quantities at half the 1929 prices has brought the total value down below 40 percent of the 1929 level. Of these two factors, the more alarming, because the more difficult to change, is the quantitative decline. The recovery after the autumn of 1932 was seasonal; but there has been no lifting of the restrictions (particularly of the new quantitative restrictions) upon the movement of goods, and the quantum has continued to decline. The fall which had been 7 percent in 1930, 9 percent in 1931 (compared with 1930), and 11-12 percent in the first half of 1932 (compared with the first half of 1931), rose for the year 1932 as a whole to 13-14 percent. The further fall indicated in the second half of 1932 emphasizes the growing importance of quantitative trade restrictions. Different countries have suffered in different degree, as is seen from the
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