Yet even this expenditure of the carefully husbanded investments, the results of thrift and financial foresight, did not suffice to pay for nearly six years of war. Britain also accumulated overseas debts to the amount of £3,000,000,000, or, at current rates of exchange, $8,400,000,000. When the money was borrowed, the pound sterling was pegged at $4.03 and the dollar equivalent of the external debt was closer to $12,000,000,000. The emphasis on armaments and the priority given arms-producing industries, the arrears of industrial maintenance and replacement, the concentration of manpower in the services and industries of national importance for the winning of the war, and the shortage of shipping all reduced Britain's export trade during the war years. By 1944 exports had fallen to less than one third of their 1938 volume. This meant that, in some cases, nations whose economy had been less strained by the war were replacing British sellers in these markets. In other instances, nations long dependent on British exports began to make their own products. When the British were prepared to return to normal export trade, the markets were not so extensive as they had been before the war. The war affected Britain's financial position in two other respects. At its end the real value of the gold and dollar reserves of the nation had been reduced to about one half of the pre-war level. But the physical destruction of the war had increased Britain's dependence, and that of other sterling-area nations and other countries, upon supplies of all kinds from the United States. Yet the dollar earnings by these countries were not enough to pay for their supplies. Finally, and perhaps most important from the standpoint of a country that must live by trade, the terms of trade changed. The price of raw materials imported into Britain rose sharply after the war. By 1948 about 20 per cent more goods had to be exported than in 1938 to pay for the same amount of imports. As a result of these changes in her position, Britain emerged from the war as an empty-handed victor. The banker of the world was deeply in debt. The market places of the world were crowded with other nations, and her own goods were few in number and out of date. Shabby, tired, undernourished, the island people, not for the first time, began the long road back. The road chosen was longer and more arduous than it might have been because the British, government and people, Socialist and Tory, did not wish to abandon their position as a world leader. War might have impoverished them, circumstances might have made them dismiss the maid and do their own washing up, but to an incurious world they turned a brisk and confident face. For years the world had recognized that the British never knew when they were licked. Now, it seemed, they did not know when they were broke.