British Imperialism and the Making of Colonial Currency Systems

A fascinating question to think about is British were on Gold Standard for a long time but its colonies were kept on silver. Why were the imperial powers doing this considering a similar currency would have been more imperialistic? Likewise there are several questions on colonial currency systems imposed by other imperial powers. However, most monetary history accounts barely discuss the colonial currency systems.

In this aspect, this book by Wadan Narsey is a breath of fresh air as it discusses British currency policy in its various colonies. The author questions many a standard ideas around currency policy calling them a myth.

Here is a review by Kurt Schuler:

There must be few cases of a publication by an active scholar so long delayed as this book. Wadan Narsey wrote the bulk of it as his dissertation at Sussex University (England), completing it in 1988. That was at the beginning of his career as a university professor in his native Fiji. His retirement, hastened by the military dictatorship of which he was an outspoken critic, gave him the leisure to revisit and revise the dissertation for publication. The result is a work that has at least as much interest as when it was first written. There were many critics of the world monetary system then; there are at least as many now. It is all the more important, then, to know whether previous incarnations of the world monetary system worked better than the present one, or whether they had hitherto neglected disadvantages that should weigh against them.

The central argument of the book is that the British government arranged colonial monetary systems much more for its benefit than for that of the colonies. The British government’s ability to commandeer colonial financial reserves in London was crucial to enabling the Bank of England and the London financial market to avoid a number of crises. Among Britain’s colonies, those with a white majority or a large white minority received more advantageous treatment than majority nonwhite colonies, contributing to their faster economic development.

A must read as it discusses case of India as well. This blog had also reviewed the British currency note policy in this post. As students of Indian economics, these aspects are rarely taught and discussed..