The Sterling Area in the 1930s: A Unique Monetary Arrangement?

This article looks closely at one aspect of the stabilisation and currency management process which has been relatively neglected, namely the formation of the sterling area and its role in currency stabilisation in the 1930s. The 1930s have often been seen as a period of unrelieved currency disorder. The devaluation of the dollar early in 1933 and the failure to establish even a modicum of international cooperation on monetary and currency matters at the World Economic Conference in the summer of that year appeared to bode ill for the future. Three factors were largely responsible for the rescue from continued currency chaos: 1. a determination on the part of many countries to avoid undue instability in the exchanges, 2. the emergence of fairly distinct currency areas following the general collapse of gold, and 3. a gradual resumption of international monetary cooperation during the course of the 1930s.