Imperial policy and colonial sterling balances 1943-56*

The Journal of Imperial and Commonwealth History

Volumn 19, Issue 1, 1991, Pages 24-44

  Hinds, Allister E ^a  

^a UNIVERSITY OF THE WEST INDIES   (Jamaica)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84950036881     PISSN: 03086534     EISSN: 17439329     Source Type: Journal    
DOI: 10.1080/03086539108582827     Document Type: Article

References (72)

1. R. Gardner, Sterling Dollar Diplomacy in Current Perspective (new and expanded edition) (New York, 1980);
2. L.S. Pressnell, External Economic Policy Since the War, Vol.1 (London, 1986);
3. R. Clarke, Anglo-American Co-operation in War and Peace (Oxford, 1982); and R.M. Hathaway, The Ambiguous Partnership: Britain and America 1944–47 (New York, 1981).
4. CO 852/584/1/19037/16. Washington to Joint American Secretariat. Sever No.702, 26 April 1945.
5. A. Hinds, ‘Sterling and Imperial Policy 1945-1951’, Journal of Imperial and Commonwealth History, 15, 2 (1987), 148–70.
6. J. Polk, Sterling (New York, 1956) 175-206;
7. D.J. Morgan, The Official History of Colonial Development (London, 1980) II, 53–63 and III, 157-74;
8. B.R. Tomlinson, “Indo-British Relations in the Post-Colonial Era: The Sterling Balances Negotiations 1947-49’, Journal of Imperial and Commonwealth History, 13, 3 (1985), 142–62.
9. A.N. Porter and A.J. Stockwell, British Imperial Policy and Decolonization 1938–1964, II (London, 1989), 128. Doc. 5 ‘Sterling Balances’, note by the Chancellor of the Exchequer, 20 Dec. 1951, CAB 129/48.
10. T 236/3351. ‘The Treatment of the Colonial Sterling Balances’, draft memorandum by O.L Williams forwarded to N.E Young with a covering letter dated 4 May 1949. This memorandum was the Treasury’s response to the Governor of the Bank of England’s request for a memorandum which examined the colonial sterling balances, colonial currency reserves and the prospects for colonial borrowing in London. See T 236/3351, H. Wilson-Smith to Mr. Governor, 30 May 1949.
11. T 236/4090. C.H.M. Wilcox to N.E. Young, 1 July 1943.
12. T 236/4090. S. Caine to Keynes, 14 May 1943.
13. T 236/4090. Keynes to Caine, 18 May 1943.
14. T 236/4090. E. Rowe-Dutton to Sir David Waley, 13 April 1945. In this context a fiduciary issue refers to an issue of colonial currency which was not backed by its equivalent in sterling or sterling securities.
15. T 236/4090. Minute by N.E Young, 5 July 1943. Although 100 per cent was the minimum sterling reserve requirement governing the issue of colonial currencies, sometimes 110 or 115 per cent was held in reserve. According to the Bank of England this occurred when surplus income accumulated by Currency Boards was reinvested in sterling rather than redistributed to colonial governments. See T 236/4090. ‘Questions of policy in the Management of Colonial Currencies’ (comments on memorandum for Finance Sub-Committee of the Colonial Economic Advisory Committee) 7 May 1945.
16. Tomlinson, Tndo-British Relations in the Post-Colonial Era’, 143, see also 159 endnote 4.
17. CO 852/535/7. ‘Questions of policy in the Management of Colonial Currencies’, Draft memorandum CEAC (Finance) (45) 10 Colonial Economic Advisory Committee Finance Sub-Committee, 13 Feb. 1945.
18. T 236/4090. ‘Questions of policy in the Management of Colonial Currencies’ (comments on the memorandum for the Colonial Economic Advisory Committee), 7 May 1945.
19. Pressnell, External Economic Policy, 216. See also A. Cairncross, Years of Recovery, British Economic Policy, 1945–1951 (London, 1985).
20. Pressnell, External Economic Policy, 225.
21. D. Moggeridge (ed.), The Collected Writings of John Maynard Keynes, Vol.24, Activities 1944–46. The Transition to Peace (Cambridge, 1979), 286.
22. Porter and Stockwell, British Imperial Policy and Decolonisation, Doc. No.33, Post-War Financial Policy and the Colonies: Minute by S. Caine, 15 June 1945, CO 537/1378, 229. See also Doc. No.32, ‘Post-War Financial Policy and the Colonies’: Minute by S. Caine, 9 June 1945, CO 537/1378, 225.
23. Ibid. Doc. No.33, Post-War Financial Policy and the Colonies: Minute by S. Caine, 15 June 1945, CO 537/1378, 229.
24. Porter and Stockwell, British Imperial Policy and Decolonisation, II, Doc. 5, ‘Sterling Balances’, CAB 129/48, 133.
25. Morgan, Official History of Colonial Development, II, 54.
26. CO 537/3089. Economic Policy Committee Preparations of Papers for Circulation. Some Practical Achievements in the Colonies Since the War, 7 Dec. 1948.
27. Parliamentary Accounts and Papers, X, 1946–47, 82.
28. Morgan, Official History of Colonial Development, II, 56. See also J.H. Bowden ‘Development and Control in British Colonial Policy with special reference to Nigeria and the Gold Coase 1935-1948’, unpublished PhD thesis, Birmingham, 1980, 331.
29. Morgan, Official History of Colonial Development, II, 54.
30. T 236/3351. ‘The Treatment of Colonial Sterling Balances’, draft memorandum by O.L. Williams. forwarded to N.E. Young with a covering letter dated 4 May 1949. The memorandum itself was undated. However, the date of the covering letter suggests that it was most likely written in late April or the first week of May.
31. Morgan, Official History of Colonial Development, II, 57.
32. T 236/3351. ‘The Treatment of Colonial Sterling Balances’.
33. Ibid., This point was made in Williams’ first draft but omitted from subsequeni drafts.
34. J.C.R. Dow, The Management of the British Economy 1945–60 (London 1964), 13–29, and Cairncross, Years of Recovery, British Economic Policy.
35. R. Gardner, Sterling Dollar Diplomacy in Current Perspective, 328.
36. CO 852/1001/2. Extract from a minute by C.G. Eastwood, 26 April 1947.
37. Gardner, Sterling Dollar Diplomacy in Current Perspective, 317. See alsc R.G. Hawtrey, Towards the Rescue of the Sterling (London, New York, Toronto 1954), 21.
38. O.L. Williams, The Treasury Principal who was responsible for matters dealing with colonial sterling balances. See T 236/3351 The Treatment of Colonial SterlingBalances.
39. T 236/3351. Mr Siepmann of the Bank of England to Henry Wilson-Smith, 23 June 1949.
40. T 236/3351. W.L. Gorell Barnes to N.E. Young, 17 Aug. 1949.
41. A.R. Conan, The Sterling Area (London, 1953), 104. See also Cairncross, Years of Recovery, British Economic Policy.
42. S. Pollard, The Development of the British Economy 1914–1967 (London, 1962) 363. See also CO 537/6674/97207. Extract from the Financial Times, 1 Nov. 1950.
43. PREM 8/1187. J.M. Flemming to Mr. Rickett, 27 March 1950. ‘Sterling Balances’ memorandum by the Chancellor of the Exchequer, (E.P.C. (50) 40).
44. PREM 8/1187. Minute O.S.W.R. to P.M., 24 May 1950. See also E.P.C. (50) 15th meeting, Minute No.l, 25 May 1950.
45. CAB 129/48. C. (51) 1. 31 Oct. 1951. Cabinet. The Economic Position: Analysis and Remedies. Memorandum by the Chancellor of the Exchequer, R.A. Butler.
46. T 229/402. ‘Our Economic Prospect and Objective’. This paper was submitted for discussion at a meeting chaired by the Chancellor of the Exchequer on 31 Nov. 1951.
47. This is quoted from T 236/3352 ‘Colonial Sterling Balances’, A.K. Potter to Mr Flett, 21 March 1953.
48. Porter and Stockwell, British Imperial Policy and Decolonisation, II, Doc.3, ‘Balance of Payments of the Colonial Territories’, Cabinet Memorandum by the Secretary of State for the Colonies, 19 Nov. 1951, CAB 129/48, 107.
49. T 236/3351. Secret C.C (51) 9th Conclusions, 20 Nov. 1951.
50. T 236/3564. Commonwealth Finance Ministers Meeting. Brief on objectives and general policy. Note by the Treasury, 20 Dec. 1951.
51. T 236/3355. A.M. Jenkins to J.G. Stott, Ministry of Supply, 17 June 1952.
52. Ibid., Draft Circular Telegram C.D.P. (53) 10 Jan. 1953.
53. T 236/3352. C.F. Cobbold to Sir Edward Bridges, 6 March 1953. Draft memorandum.
54. T 236/3352. T.L. Rowan to Sir B. Gilbert, 12 May 1953.
55. Morgan, The Official History of Colonial Development, III, 161.
56. T 236/3352. ‘Sterling Balances and U.K. Exports’, draft memorandum by M.T. Flett, 19 March 1953.
57. Ibid., note of meeting held in the Treasury at 11.30 a.m. on 22 May 1953.
58. T 236/3353. Working Party on Colonial Sterling Assets. Report on the economic significance of the assets, 1.
59. T 236/3562. Minute by A.K. Potter, 24 May 1954.
60. T 236/3562. E. Melville to A.K. Potter, 2 July 1954. The Colonial Office pointed out also that existing legislation provided for the investment of a portion of Saving Bank Funds in the colonies. It noted that many governments had not taken advantage of this provision.
61. T 236/3562. E. Melville to A.K Potter, 2 July 1954.
62. T 236/3562. A.H. Mitchell to Mr Vinter, 10 Dec. 1954.
63. T 236/3562. T.L. Rowan to Mr Armstrong, 26 May 1954.
64. T 236/3562. A.H. Mitchell to Mr Vinter, 10 Dec. 1954.
65. Dow, Management of the British Economy, 92.
66. Polk, Sterling, 93–8. See also S. Strange, Sterling and British Policy (London, 1971), 64–5.
67. T 236/3562. Mr A.H.M. Hillis to Mr Melville, 22 July 1954.
68. T 236/3562. A.H. Mitchell to Mr Vinter, 10 Dec. 1954.
69. T 236/4253. Minute by Mrs M. Wragge-Morley, 31 March 1955. The figures used here are the ones quoted by the Treasury at this time. In preparing this article I found many discrepancies in the statistics on the colonial sterling balances which were used by various government departments. In order to ensure consistency in the figures quoted in this article, I have used the statistics on colonial sterling balances which were compiled in The Digest of Colonial Statistics No.35 (Nov.-Dec. 1957) and The Annual Abstract of Statistics, Vol.93 (1956). This accounts for the difference between the figures quoted here and those quoted earlier in this article.
70. T 236/4220. ‘The Pattern of Colonial Sterling Assets and United Kingdom Sterling Liabilities to the Colonies’.
71. T 236/4220. Mr E. Melville to A.W. France, 1 May 1956.
72. PREM 11/1367 C.M. (56) 64th Conclusions, Minute No2, 13 Sept. 1956.