Southern Rhodesia and Britain’s Discriminatory Sterling Area: The Dollar Crisis and Post-War Colonial Tobacco Trade, 1947–1960

Abstract

ABSTRACT Drawing on archival material from the National Archives of Zimbabwe, Adam Matthews Digital Archives and newspaper reports, this study locates Southern Rhodesia’s tobacco industry within post-war currency developments and the politics of international trade. Following the Second World War, the shift in the financial balance of economic power triggered by the shift from the gold standard to the reformed gold standard had a lasting impact on global trade. This resulted in the British retreat from the position of hosting the global key currency denominated in sterling towards the US dollar from 1944 onwards. This study utilises the effects of this shift in the case of Southern Rhodesia, a British colony, and its impact on one specific commodity: tobacco. Because of the dollar crisis of 1947 in Britain, however, and Cold War geopolitical considerations explored in this paper, Britain was extended some leeway by the United States to recover from the losses of two world wars and a depression, as well as the loss of key currency status in ways that resulted in the establishment of a discriminatory sterling area that informed colonial trade dynamics in interesting ways. This paper thus brings the experience of Southern Rhodesia’s tobacco industry into sharp focus by centring it in the context of international exchange arrangements and trade considerations in the post-Second World War period. In doing so, it illuminates imperial-colonial relations in a settler colonial setting against the background of post-war Anglo-American economic relations.