Hostname: page-component-848d4c4894-89wxm Total loading time: 0 Render date: 2024-07-07T08:08:01.407Z Has data issue: false hasContentIssue false

Monetary institutions in newly independent countries: the experience of Malaya, Ghana and Nigeria in the 1950s1

Published online by Cambridge University Press:  12 September 2008

Catherine R. Schenk
Affiliation:
University of Glasgow

Abstract

Image of the first page of this content. For PDF version, please use the ‘Save PDF’ preceeding this image.'
Type
Articles
Copyright
Copyright © European Association for Banking and Financial History 1997

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

2 Walters, A., ‘A hard ruble for the new republics’, National Review, 44 (1992), pp. 34–6Google Scholar; Walters, A. and Hanke, S. H., ‘Currency boards’, in Newman, P., Mulgate, M. and Eatwell, J. (eds), The New Palgrave Dictionary of Money and Finance (London, 1992), pp. 560–2Google Scholar; and Hanke, S. and Schuler, K., ‘Ruble reform: a lesson from Keynes’, The Cato Journal, 10 (1991).Google Scholar

3 Walters, and Hanke, , ‘Currency boards’, p. 560.Google Scholar

4 Osband, K. and Villanueva, D., ‘Independent currency authorities: an analytic primer’, IMF Working Paper, WP/92/50 (07 1992), p. iii.Google Scholar The obstacles to introducing currency boards during the 1990s are surveyed in Schwartz, A. J., Do Currency Boards Have a Future? (London, 1992).Google Scholar

5 Hazlewood, A., ‘Sterling balances and the colonial currency system’, Economic Journal, 62 (1952), pp. 942–5.CrossRefGoogle Scholar Other contemporary critics include Polk, J., Sterling: Its Meaning in International Finance (London, 1956).Google Scholar

6 Greaves, I., ‘The sterling balances of colonial territories’, Economic Joumal, 61 (1951), p. 434.Google Scholar

7 For a version of this argument, see also Newlyn, W. T. and Rowan, D. C., Money and Banking in British Colonial Africa: A Study of the Monetary and Banking Systems of Eight British African Territories (Oxford, 1954), pp. 201–4.Google Scholar

8 Currency reserves accounted for about one-third of total colonial sterling balances during the 1950s. For a more detailed assessment of sterling balances in the 1950s, see Schenk, C. R., Britain and the Sterling Area: From Devaluation to Convertibility in the 1950s (London, 1994), pp. 1753.Google Scholar

9 Collyns, C., Alternatives to the Central Bank in the Developing World, IMF Occasional Paper no. 20 (07 1983), p. 10.Google Scholar

10 Bangura, Y., Britain and Commonwealth Africa: The Politics of Economic Relations 1951–75 (Manchester, 1983), pp. 47–8.Google Scholar

11 Walters, and Hanke, , ‘Currency boards’, p. 560.Google Scholar

12 Jucker-Fleetwood, E. E., Money and Finance in Africa (London, 1964), p. 42.Google Scholar

13 Bangura, , Britain and Commonwealth Africa, p. 47.Google Scholar

14 For a more detailed study of the evolution of Malayan central banking, see Schenk, C. R., ‘The origins of a central bank in Malaya and the transition to independence, 1954–59’, Journal of Imperial and Commonwealth History, 21 (1993), pp. 409–31.CrossRefGoogle Scholar

15 For more detail on the Fisher mission, see Uche, C. U., ‘Bank of England vs the IBRD: did the Nigerian colony deserve a central bank?’, Explorations in Economic History, 34 (1997), pp. 220–41.CrossRefGoogle Scholar

16 The Economic Development of Nigeria (Baltimore, 1955), p. 150.Google Scholar

17 Bank of England, London, Archives [hereafter BoE]: OV68/2, note by A. L. Ryan to Fisher, 4 05 1954.Google Scholar See also Uche, , ‘Bank of England’, pp. 231–4.Google Scholar

18 BoE: OV68/3, letter from A. M. Stamp to Ryan, 13 11 1954.Google Scholar

19 BoE: OV68/3, note of a meeting of Colonial Office and Bank of England in London with Carlyle (Nigerian finance minister), 22 05 1956.Google Scholar The introduction of a local currency was expected to be especially costly because of the large circulation of coin in Nigeria.

21 BoE: OV68/3, letter from Loynes, J. B. in Nigeria to Hawker (BoE), 16 03 1956.Google Scholar

22 The report was published in 11 1957.Google Scholar

23 BoE: OV68/4, letter from Loynes, J. B. to Jenkyns (BoE), 18 02 1958.Google Scholar

24 Jucker-Fleetwood, , Money and Finance in Africa, p. 42.Google Scholar

25 Trevor, C., Report on Banking Conditions in the Gold Coast and on the Question of Setting up a National Bank (Accra, 1951).Google Scholar Trevor was a retired deputy governor of the Reserve Bank of India. He was accompanied by Payton, S. W. of the Bank of England on his mission to the Gold Coast in 1951.Google Scholar

26 BoE: OV69/1, report by Paton, G. D., 4 12 1948.Google Scholar

27 For later criticisms, see the extracts from Parliamentary Debates in Accra in Jucker-Fleetwood, , Money and Finance in Africa, Appendix II.Google Scholar

28 Eggleston had previously been with the Reserve Bank of India.

29 BoE: OV69/3, memo by Fisher, for the Governor, 11 02 1955.Google Scholar

30 BoE: OV69/3, letter from Loynes to Fisher (BoE), 12 02 1956.Google Scholar

31 For some case studies which assess the usefulness of central banks, see Capie, F. and Wood, G. E. (eds), Unregulated Banking: Chaos or Order? (London, 1991).CrossRefGoogle Scholar

32 Collyns, , Alternatives, p. 22.Google Scholar

33 Fry, M. J., Money, Interest and Banking in Economic Development (Baltimore, 1988), p. 14.Google Scholar

34 Collyns, , Alternatives, p. 11.Google Scholar

35 Olakanapo, J. O. W., ‘Monetary management in dependent economies’, Economica (1961), pp. 395408CrossRefGoogle Scholar, quoted in Jucker-Fleetwood, , Money and Finance in Africa, p. 52.Google Scholar

36 Ayatey, S. B. Y., Central Banking, International Law and Economic Development: Studies on West Africa (Dubuque, 1968), p. 28.Google Scholar

37 The Malayan central bank did help to encourage a market in Treasury Bills during the early 1960s: Degani, A. H., ‘The monetary system of Malaysia and Singapore: an analytical description’, in Purcal, J. (ed.), The Monetary System of Singapore and Malaysia: Implications of the Split Currency (Singapore, 1967), pp. 1733.Google Scholar

38 Bank Negara Tanah Melayu, Annual Report (1959), p. 5.Google Scholar

39 Public Records Office, London [hereafter PRO]: T236/4797, report by Tampton, J. L., Office of the High Commissioner in Kuala Lumpur to Alistair McKay, HMT, 1 02 1960.Google Scholar

40 Bank Negara Tanah Melayu, Annual Report (1959), p. 5.Google Scholar

41 Lock, Lee Hock, Central Banking in Malaysia (Singapore, 1987), p. 159.Google Scholar

42 Brown, C. V., The Nigerian Banking System (London, 1966), p. 179.Google Scholar

43 Loynes, J. B., On the Establishment of a Nigerian Central Bank, the Introduction of a Nigerian Currency and other Related Matters (Lagos, 1957).Google Scholar

44 Gold Coast Legislative Assembly Debates, 5 02 1957, p. 702.Google Scholar

45 Bank Negara Tanah Melayu, Annual Report (1959), p. 12.Google Scholar

46 Lock, , Central Banking, p. 324.Google Scholar

47 IBRD, The Economic Development of Malaya (Baltimore, 1955), p. 472.Google Scholar

48 Lock, , Central Banking, Table 8.3., p. 332.Google Scholar Assets of domestic banks totalled M$551.4m. and those of foreign banks totalled M$1585m.

49 BoE: OV68/2, report by Levy, Banking Officer in Nigeria, 21 12 1953.Google Scholar

50 IBRD, The Economic Development of Nigeria (Baltimore, 1955), p. 157.Google Scholar

51 Loynes, , On the Establishment of a Nigerian Central Bank, Annex I. The London banks were dominated by Barclays (DCO) and BBWA.Google Scholar

52 Onoh, J. K., ‘Commercial banks' deposit liabilities and credit generation’Google Scholar, in idem (ed.), The Foundations of Nigeria's Financial Infrastructure (London, 1980), p. 85.Google Scholar

53 Trevor, , Report on Banking Conditions, para 34.Google Scholar

54 IBRD, Economic Development in Nigeria, pp. 156–7.Google Scholar

55 IBRD, Economic Development of Malaya, p. 472.Google Scholar

56 IBRD, Economic Development of Nigeria, p. 152.Google Scholar

57 For an account of Barclay's efforts to increase local lending in Africa, see Bostock, F., ‘The British overseas banks and development finance in Africa after 1945’, in Jones, G. (ed.), Banks and Money: International and Comparative Finance in History (London, 1991), pp. 157–76.Google Scholar

58 Lewis, W. A., Report on Industrialisation and the Gold Coast (06 1953)Google Scholar, quoted in Metcalfe, G. E. (ed.), Great Britain and Ghana: Documents of Ghana History 1807–1957 (Ghana, 1964), pp. 706–7.Google Scholar

59 BoE: OV69/5, telegram from Colonial Office to Snelling (UK High Commissioner, Accra), 8 09 1960.Google Scholar

60 BoE: OV69/6, note by Loynes, 7 10 1960.Google Scholar

61 See for example, Wood, G. E., ‘Comment’, in Capie and Wood, Unregulated Banking, pp. 2935Google Scholar; and, also, Cameron, R. (ed.), Banking and Economic Development: Some Lessons of History (Oxford, 1972), p. 25.Google Scholar

62 Fry, , Money, Interest and Banking, pp. 429–30.Google Scholar

63 The minimum amounts of paid-up capital necessary to establish a bank were £12,500 for indigenous banks and £0.1m. for foreign banks.

64 Fry, , Money, Interest and Banking, p. 315.Google Scholar

65 This is noted in Newlyn and Rowan, Money and Banking, p. 272.Google Scholar

66 Bangura, , Britain and Commonwealth Africa, p. 49.Google Scholar

67 Sayers, R. S., Central Banking after Bagehot (Oxford, 1957), p. 109.Google Scholar

68 Huq, M. M., The Economy of Ghana (London, 1989), p. 216.CrossRefGoogle Scholar