insurance funds from this country to the United Kingdom, estimated at approximately $27,000,000 in 1936, was placed at $28,500,000 in 1937.

Table 27. Insurance Transactions in the Balance of International Payments of the United States, 1936-37

The premium income of foreign insurance companies in the United States rose from $384,000,000 in 1936 to $418,000,000 in 1937, the largest aggregate since 1931. The gain for the year was distributed among all types of companies; but the bulk of the increase, as of the total, was obtained by British units. The premium income of United States companies abroad in 1937, reckoned at $113,000,000, showed no significant change from the preceding year. The admitted assets held by foreign companies in this country were further increased during 1937 to a post-war peak of $1,140,000,000, while the assets held by domestic companies in foreign countries were slightly reduced. The respective aggregate net equities were each reduced below the level of 1936, that of foreign insurance companies in their United States branches and affiliates from a record high of $375,000,000 to $356,000,000 and that of United States companies in their Canadian 75 branches and affiliates from $120,000,000 to $95,000,000. Collateral data relating to international insurance transactions in 1936-37 are shown in detail in table 28.

7 Data for other countries are not available.

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Table 28.-Premium Income, Admitted Assets, and Net Worth of Foreign Insurance Companies in the United States and of United States Insurance Companies in Foreign Countries, 1936-37

1 Equivalent to an export of gold; changes in gold held under earmark abroad for the account of the Exchange Stabilization Fund are not reported.

In 1937, for the fourth consecutive year, the net movement of gold into the United States exceeded a billion dollars. Gross imports of $1,632,000,000 considerably exceeded gross receipts of $1,144,000,000 in 1936 and were only slightly less than the record inflow of $1,741,000,000 in 1935. Gold exports in 1937, valued at $46,000,000, were again comparatively very small. However, as a result of a net loss. of gold through reported earmarking operations amounting to $200,000,000, the net inflow of gold during the year was reduced to approximately $1,386,000,000. This heavy inward movement followed the acquisition of gold by the United States from foreign sources in the

respective amounts of $1,217,000,000, $1,739,000,000, and $1,030,000,000 in 1934, 1935, and 1936 and brought the total inflow of gold since the devaluation of the dollar to more than $5,000,000,000.

As in other recent years, the correlation between the reported movements of gold and of capital funds was well defined in 1937, except in the last quarter of the year (see table 29 and fig. 14). The net inflow of gold during the first quarter was $339,000,000, during the second quarter $651,000,000, and during the third quarter $394,000,000. The reports of the Treasury Department covering capital movements between the United States and foreign countries showed net inflows of capital amounting to $323,000,000 in January-March, to $630,000,000 in April-June, and to $351,000,000 in July-September. Thus the inward movement both of gold and of capital funds was much greater during the second quarter and somewhat larger during the third quarter of 1937 than during the first quarter, and the respective amounts were closely comparable. In the fourth quarter of the year, however, the net movement of gold was virtually nil, while the outflow of capital reached large proportions and exceeded $500,000,000 for the 3 months. This divergence was the consequence in large part of a substantial net excess of receipts from foreigners on trade and service account during the period; but it must be explained in part also upon the basis of gold losses through unreported operations.

Table 29.-Reported Gold Movements Between the United States and Foreign Countries: Exports, Imports, and Earmarking Operations, by Months, 1937 [In thousands of dollars]

1 Since a loss of gold through earmarking operations (i. e., gold placed under earmark for foreign account at Federal Reserve Banks or gold released from earmark in foreign countries for account of Federal Reserve Banks) is equivalent to an export of gold, losses are designated with a plus (+) sign. Since a gain of gold through earmarking operations (i. e., gold released from earmark for foreign account at Federal Reserve Banks or gold placed under earmark in foreign countries for account of Federal Reserve Banks) is equivalent to an import of gold, gains are designated with a minus (-) sign. Changes in gold held under earmark abroad for the account of the Exchange Stabilization Fund are not reported.

The heavy movement of gold from the United Kingdom to the United States during the final quarter of 1936 continued in even. greater volume during most of 1937 (see table 30). For the year as a whole, nearly $900,000,000 was acquired by this country through the London market, practically all of which was imported during the period January-September. At the same time, however, the gold holdings of the United Kingdom increased significantly (from $3,518,

000,000 on March 31, 1937, to $4,086,000,000 on September 30, 1937, inclusive of gold held by the Exchange Equalization Fund) as a result largely of heavy imports from France and of receipts from British Africa, the Union of Soviet Socialist Republics, and other goldproducing countries.

Table 30.-Gold Movements Between the United States and Selected Foreign Countries, by Months, 1937 1

The inflow of gold from the United Kingdom during the first quarter of 1937 was closely related to substantial European purchases of domestic securities and to the transfer of a large volume of short-term balances to this country for the account of Latin American countries.76 During the second quarter, the movement was closely associated with a further release of gold from private hoards in London."7 The heavy offerings in the London bullion market, influenced apparently by persistent rumors of impending changes in the gold policies of the United States and British Governments, and a strong demand

76 This inflow of short-term funds involved primarily the movement of Argentine balances from London to this country in connection with redemption operations.

"This development followed a substantial dishoarding movement during the last quarter of 1936. The Federal Reserve Board estimated the reduction in unreported official holdings and in private hoards in Western countries at approximately $1,200,000,000 during the period Oct. 1936 to June 1937. Federal Reserve Bulletin, Aug. 1937, p. 704.