At long last the United States Government decided in December 1971 to devalue the dollar. This decision was long overdue, having regard to the fact that the dollar had been grossly overvalued and that its overvaluation had been largely responsible for the gigantic balance of payments deficit. By December 1971 it became obvious that the drastic measures announced by Mr Nixon on 15 August, which included the official suspension of the dollar’s convertibility into gold, were unable to solve the crisis. In spite of the import surcharge of 10 per cent and other protectionist measures, and notwithstanding the revaluation or appreciation of most other important currencies, the import surplus continued to be abnormally large and the dollar continued to be subject to selling pressure.