Conflicts over Colonial Sterling Reserves, Academic Criticisms and Imperial Defense, 1927–57

Chapters 4 to 6 have shown that even when the currency boards were being created between 1890 and 1914, there were considerable disagreements between London and the colonies and among the London authorities themselves, as to the supposed benefits and costs. Similar disagreements again emerged during the 1920s, ’30s and ’40s, when imperial authorities manipulated colonial reserves in London in the interests of the City and sterling, and to provide easy and cheap finance for the British Government. The manipulation of colonial reserves continued for more than a decade after the war was over. The internal debates went a long way to undermining the supposed founding principles of the currency boards, while also establishing that whatever their statutory obligations to safeguard the interests of colonies, the Colonial Office gave in to the pressures from the British Treasury and Bank of England, fully aware that they were safeguarding imperial interest, even if their decisions resulted in financial disadvantage to the colonies. The Colonial Office deliberately deceived colonies to achieve their ends.