18. Germany cuts interest rate on certain private debts abroad; o maximum of 4 percent.

JUNE

1. Secretary Morgenthau issues statement that Tripartite Agreement has averted sharp fluctuations of foreign exchange rates during period of disturbed currency conditions.

4. Gold price in London is off 4d. as fears of cut by United States continue. 8. British Chancellor of Exchequer denies rumor of change in gold policy of Government.

11. Decline in forward exchange rates is viewed as evidence of increasing flight of capital from France.

14. Messrs. Rist and Baudoin resign from French Equalization Fund Committee.

15. Bank of France raises discount rate from 4 percent to 6 percent.

17. Netherlands lifts gold-export embargo in effect since September 30, 1936. 22. Camille Chautemps forms Cabinet 2 days after resignation of Blum Cabinet. 23. Bank of England buys more than £5,000,000 of gold from Exchange Equalization Account.

25. British Government proposes to Parliament increase in resources of Exchange Equalization Account from £375,000,000 to £575,000,000.

28. Georges Bonnet, after arrival in Paris to become French Finance Minister, decrees suspension of gold and foreign-exchange payments as well as closing of the Bourse.

28. French Finance Ministry announces that loss of gold by Bank of France and Stabilization Fund between June 1 and June 28 amounted to 7,800,000,000 francs.

29. French Finance Minister announces that franc will be unpegged from gold and allowed to find own level.

30. By vote of the French Senate, Premier Chautemps and Finance Minister Bonnet are granted full powers to "restore the French financial situation by decree."

JULY

1. Statement of Bank of France shows loss of 6,000,000,000 francs of gold.

1. French Government abrogates limits of franc devaluation established by monetary law of October 1936.

2. Netherlands eases embargo on foreign security issues.

7. Bank of France lowers discount rate from 6 percent to 5 percent.

.9. United States agrees to sell gold to China for Chinese silver in move to aid world currencies.

16. Secretary of Treasury announces agreement to sell gold to Government of Brazil up to total of $60,000,000.

16. French franc falls to 3.821⁄2 cents, lowest level since December 1926.

23. Japan revalues gold stock at $29 an ounce, resulting in book profit of 800,000,000 yen.

AUGUST

4. Bank of France reduces discount rate from 5 percent to 4 percent. 18. Sterling reaches $4.995, new high for 1937.

SEPTEMBER

3. Bank of France reduces discount rate from 4 percent to 31⁄2 percent. 16. French franc drops to 3.379 cents as result of renewed selling.

OCTOBER

10. Arrangements completed for $46,000,000 Swiss loan to French railways. 10. Retention of power by Left indicated by French elections.

23. Resumption of gold shipments by Japan.

25. Van Zeeland Cabinet resigns in Belgium.

NOVEMBER

8. Gold in amount of $10,250,000 from the inactive fund, engaged for shipment to France on November 10, represents first major export of gold from United States since February 1936.

8. Dollar falls to $5.03 in terms of sterling as foreign liquidation of dollar balances gains momentum.

11. Statement of Bank of France shows gain of 3,127,000,000 francs of gold. 13. Bank of France reduces discount rate from 31⁄2 percent to 3 percent.

13. French Treasury announces intention of repaying sterling railroad credit for £40,000,000 in December.

DECEMBER

3. Gold in amount of $5,000,000 is shipped to France from United States Stabilization Fund.

13. Renewal of German Standstill Agreement for year beginning February 28, 1938.

24. Final repayment by French Treasury of French railroad credits granted by British banks on January 28, 1937.

24. Canadian gold-export prohibition is extended until December 31, 1938. 30. British Treasury issues statement showing gold holdings of Exchange Equalization Account as of September 30 at 39,854,000 ounces, as compared with 26,674,000 ounces held on March 31.

31. Secretary of Treasury and Minister of Finance of Mexico announce conclusion of mutually satisfactory arrangements with respect to Mexican silver. 31. International silver agreement reached at London Economic Conference in 1933 expires.

B. TOURIST ACCOUNT

UNITED STATES-CANADIAN TOURIST ACCOUNT

The long frontier between the United States and Canada, the excellence of highways in both countries, and the proximity to the border of centers of population are the factors which account for the importance of motor travel across the northern land border. The expenditures of United States motorists accounted for two-thirds of the total outlays of residents of the United States in Canada in 1937, and the expenditures of Canadian motorists comprised half of the total expenditures of Canadian travelers in this country. Furthermore, travel outlays bulk large in the exchange of services between the two countries.

The significance for the respective balances of international payments of the United States and of Canada which may thus be imputed to United States travel expenditures in Canada and to Canadian travel outlays in this country emphasizes the necessity of statistical compilations of sufficient scope and detail to assure satisfactory expenditure estimates. Since 1928 the Finance Division of the Bureau of Foreign and Domestic Commerce has collected annual data on per-car expenditures in Canada by United States automobile travelers through the use of questionnaires handed to returning motorists by Canadian border officials. These questionnaire forms are regularly prepared by the Finance Division; but distribution was effected until 1938 through the cooperation of the Dominion Bureau of Statistics, which instructed Canadian immigration officers to hand them on designated dates to returning United States motorists. Beginning with 1938, distribution is being made by United States immigration officials. The method of distribution is designed to assure not only appropriate seasonal sampling but also a wide geographic sampling. The distribution of these questionnaires in 1937 involved the use of approximately 20.000 forms.

United States motor cars entering Canada for touring purposes are recorded by the Canadian Department of National Revenue according to the type of permit obtained at the time of entry. These permits are issued for periods of (a) 48 hours or less (prior to 1935, 24 hours or less), (b) 3 to 60 days (prior to 1935, 2 to 60 days), and (c) up to 6 months. Since questionnaire returns from United States motorists visiting Canada report the class of permit obtained as well as expenditures in Canada, it is possible to estimate expenditures by the several permit groups. Table I shows the per-car averages obtained from questionnaire returns for motorists entering Canada on each type of permit, the number of United States automobiles entered in each class, and the estimated annual expenditures of United States motor travelers in Canada for the years 1928-37, together with certain collateral information compiled from questionnaire returns.

Table I.-Expenditures of United States Motorists in Canada, 1928–37

1 In several cases the averages used in calculating total expenditures represent slight adjustments of the averages computed from the questionnaire returns.

2 The figure originally reported by the Dominion Department of National Revenue (2,632,941) was ad justed to the total shown above by the Dominion Bureau of Statistics. Cf. the latter's mimeographed release entitled "Canada's Tourist Trade in 1935."

3 1936 average; returns for 1937 were inadequate.

1.4

3. 02

7.6

3.00

217 719

58.012 129,226

611

187,849

Estimates of the expenditures of Canadian motorists in the United States are prepared by the Dominion Bureau of Statistics by methods similar to those employed by the Finance Division in the case of United States motorists in Canada. However, United States immigration authorities merely take up and hold the Canadian motorists' permit to reenter Canada (unless he reports an intention to reenter by another border station) or issue yearly permits to Canadians residing along the border to enable them to cross frequently without the need of a separate permit for each crossing. For this reason, it is impossible to identify, from entry records, classes of Canadian motorists visiting this country on the basis of time spent in the United States. Nevertheless, since information on length of stay is covered by the Dominion Bureau's questionnaire form handed to returning Canadian motorists, questionnaire returns permit (upon the assumption of adequate and representative sampling) estimates of the relative numbers of Canadian motorists in the United States for selected periods of time; and average expenditures computed from the returns reflect the distribution by length of stay of this type of travel. Data relating to the expenditures of Canadian motorists in the United States in the years 1929-37 are summarized in table II.

Table II.-Expenditures of Canadian Motorists in the United States, 1929-37 1

1 Figures for 1930 are not available.

The totals shown have been adjusted to allow for various factors. Those for 1932 and 1933 were reduced somewhat to allow for exchange differences between the Canadian dollar and the United States dollar. Because the questionnaire sampling was not believed to provide a representative weighting of various types of travel, certain adjustments were made also in the totals for 1929 and for 1934 and 1935.

The volume of rail and steamer travel from the United States to Canada was estimated, for years prior to 1936, by the Dominion Bureau of Statistics on the basis of data furnished by principal railroad and steamship companies. These estimates had marked limitations. Furthermore, no satisfactory means were available for estimating the number of persons crossing the border by bus and other means of transport. During 1935, through the cooperation of the Dominion Bureau, the recording of nonimmigrant entries into Canada from the United States, according to mode of transportation, was inaugurated by the Canadian immigration authorities. In the same year, questionnaires were distributed for the first time to returning United States travelers other than motorists. Approximately 10,000 questionnaire forms were distributed by the Immigration and Naturalization Service to United States travelers returning from Canada by rail and steamer. Per capita expenditures were estimated at $55 per person for 894,957 United States travelers entering Canada by rail in 1937, as compared with an average of $50 applied to 831,285 travelers in this class in 1936. The average expenditures adopted for steamer travelers to Canada, based upon returns received in 1936 and 1937 combined, were $60, applied to 267,566 persons in 1937. The average employed in 1936 was $50, and the number of travelers entering Canada by steamer was 249,451 in that year. The per capita expenditures of a group of more than 3,500,000 crossers by bus, ferry, and other means in 1937 were placed arbitrarily at $7.50, the same average applied to approximately 2,500,000 crossers by these methods of transportation in 1936.

The number of Canadian rail and steamer travelers entering the United States is still ascertained from data furnished by railroad and steamship companies. The number of these entries was reported as 403,227 in 1937, as compared with 354,210 in the preceding year. Per capita expenditures were estimated by the Dominion Bureau of Statistics at $60 in each of the 2 years. The average expenditures of other crossers, who numbered an estimated 8,500,000 persons in 1937, as compared with 7,000,000 in the preceding year, were placed again at the arbitrary figure of $3.50.

The per capita expenditures of United States and of Canadian rail and steamer travelers were approximately the same in 1937, while in the case of automobile travelers the average expenditures of Canadian visitors in the United States ($27) were, as in previous years, substantially in excess of corresponding per capita outlays by residents of this country on trips across the border ($14). This difference may be attributed largely to two factors which affect the respective averages in opposite ways: (1) the relatively large number of 1-day or 2-day journeys into Canada taken by persons living in the populous centers of the United States adjacent to the border and (2) the importance of Canadian motor travel to such distant winter resorts as Florida and southern California, which involves relatively lengthy visits and correspondingly heavy expenditures.

UNITED STATES-OVERSEA TOURIST ACCOUNT

Basic data relating to the oversea tourist account of the United States in 1937 are reported in the several tables and the explanatory text which follow. The departures of United States citizens from United States and Canadian seaports in 1937 are given in table III by countries of debarkation, by class of steamship accommodation, and by registry of carrier. These data, together with the average expenditures given in table IV, form the basis for the computation of gross expenditures by citizens visiting the several oversea areas and of net expenditures after allowance for fare payments to, and expenditures on board, United States vessels. The average expenditures shown for passport areas (Europe and Mediterranean, South America, and Far East) are obtained from questionnaires sent each year to approximately 10,000 passport applicants whose names are selected at random from the records of the Department of State. In the case of citizens visiting Europe and the Mediterranean area, the number of returns is sufficiently large to warrant the calculation of mean average total expenditures and of average payments to vessels by individual steamship classes. A re-examination of the scanty returns from citizens visiting non-European passport areas in recent years led to the use of median reported expenditures for 1935, 1936, and 1937 combined for first class and for all other classes considered together in the case of the Far East and for all classes combined in the case of South America. Estimated average expenditures by citizens visiting nearby oversea areas (West Indies and Central America) in 1936 and 1937 represent adjustments of the average adopted in 1935. Since there is no feasible method of reaching travelers to these "nonpassport" areas by questionnaire and, hence, no satisfactory basis for ascertaining average outlays, the estimates are unavoidably arbitrary to a degree. The technique used to establish the averages cited in table IV is based upon the assumption that the relationship between fare payments and total per capita expenditures for travel to passport areas holds also for travel to nonpassport areas. In the case of the former, fare payments to, and expenditures on board, vessels account for about 40 percent of total outlays. From fare schedules and other data (including scattering questionnaire returns from passport applicants who visit nearby oversea areas), it was estimated that average expenditures by citizens traveling to the West Indies and Central America were roughly $300 in 1935. The averages employed in 1936 and 1937 were somewhat higher.