ABSTRACT
The pre-1913 international financial system, w hich the British strove mightily to reintroduce in the 1920s, depended on Britain’s ability to maintain the con vertibility o f sterling at a fixed rate, to lend liberally and to maintain a free market for imports.2 In the 1930s the pound w ent off gold, the balance o f payments on current account lapsed into deficit, and overseas lending was severely limited. Free trade was abandoned in 1932, and was replaced by a tariff on manufactured imports and by a system o f imperial preference supported by quotas and other bilateral arrangements w ith empire and foreign countries. D id this mean that Britain’s traditional policies had been fully overthrown, and that the T ariffR eform dream o f an imperial system supporting a revived industrial Britain had come fully into its own? The main purpose o f w hat follows is to suggest that the answer to this question must be in the negative. The gold standard was abandoned in 1931 w ith extreme reluctance; tariffs were introduced in support o f tim e-honoured monetary and financial policies both at home and overseas; and the Ottawa negotia tions and the other trade arrangements o f the 1930s make m ore sense if they, too, are considered as part o f an attem pt to salvage as m uch as possible o f the traditional financial arrangements from the disasters o f 1929-32.
