14 Pages


Chapter 18 discussed the monetary history of the British Empire, and described the sterling area as an ‘accidental monetary union’. Wartime exchange controls in 1914, and the aftermath of the short-lived return to the gold standard in the 1920s, gave it a more formal role, and this continued after 1945 when, even in a world of exchange controls and bilateral payment arrangements, transactions between the UK and the sterling area remained virtually unrestricted. Its end was, as this chapter shows, equally unplanned, unpremeditated and undramatic. Ireland, which switched from a dependent sterling to a euro link with several intermediate changes, is treated in more detail in Chapter 49, and this is followed by Chapter 50 which discusses the contrasting experience of the French colonies. Significantly, silver had by now virtually lost its monetary role, and the ‘silver’ countries of the East, which had had such problems at the end of the last century, were simply, where relevant, part of the sterling area.