One of the effects of the war upon Canadians has been to make us more conscious of our international financial relations. The rapid changes during the war, bringing with them problems which demanded immediate solutions, have radically altered Canadian economic relations with the rest of the world, and have made for a new awareness of the implications of these changes and the new responsibilities accompanying them. The war showed how adaptable nations can be under the pressure of circumstances, but the ability of human beings under pressure to adapt themselves to their environment often outruns their ability to understand thoroughly what is happening, and to make the more fundamental adjustments which new situations require. The full significance of war-time changes on our balance of payments and international position will probably not be entirely clarified for some time to come, but new potentialities have been revealed of previously unplumbed depths of capacity.

Along with the revelations of productive capacity came new experience with the financial aspects of Canada's international economic relations and the currency problems which are inherent in the structure of the Canadian balance of payments. Being closely allied to internal finance and the larger questions of the economic mobilization of total war, these international financial factors may have been overshadowed at times. But the full significance of the war-time international relations of the Canadian economy should not be overlooked, for they clearly show the extent to which full use of Canadian productive facilities is dependent upon external and special demand, and provide further evidence of how closely geared general activity in Canada is to exports. Studies of national income and expenditure show the place which the net export of goods and services has in the maintenance of national economic activity. So long as the Canadian economy maintains its present structure, it will be highly dependent upon the stimulus of external demand, since income generators like internal investment and consumption do not appear to have the potentialities under present circumstances which would permit them in themselves to maintain Canadian production at a high level.