Colonial Currency Policies, 1600–1893: From International to Localized Currencies

Abstract

Two historical themes or sets of explanations have continued to current times. First, Chalmers (1893: pp. 29–30) observed that ‘faulty as the legislation of 1825 might have been in important details, it was … sound in its essential idea, viz., that sterling was the best system of currency for all British colonies, irrespective of their geographical position and trade relations’. Nelson (1987:50) thought that the purpose of the 1825 policy was to ‘encourage the use of sterling throughout the British Empire’. Shannon (1951: pp. 334–37), Hopkins (1970: 104) and Nelson (1987: 53) all held that that the authorities believed in the principle of currency areas which allowed non-sterling currency, if dominant, to circulate alongside British silver. This chapter challenges both these sets of explanations.