The Australian role in Britain's return to the gold standard

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The part played by Australian policy-makers in the UK's return to the gold standard in I925 has been largely ignored. It receives no consideration in biographies of Montagu Norman, the Governor of the Bank of England.' Indeed, Sayers has argued that decisions by Australia and other dominions to return to gold were the result of British encouragement and leadership.2 In his important monograph on the subject Moggridge documented the process of British decision-making and focused mainly on the role of the British Treasury and the Bank of England, and their influence on Winston Churchill, the Chancellor of the Exchequer.3 In a later, more extensive study which echoed the themes of the earlier monograph, Moggridge noted that Australia and South Africa had decided to return to gold in January I925, whereas the Bank of England preferred that no announcement be made before March I925. He pointed out that Australia 'agreed to move with the UK'.4 While he was quite correct to portray the outcome as a compromise between Australia and the UK, he did not give much attention to the assertive and relatively independent elements in Australian behaviour. Nevertheless, Moggridge also showed that 'the most important considerations were not rate choice or management criteria but rather matters of timing'.5 Once market expectations developed that sterling would be returning to gold, the UK's freedom of action would have been substantially reduced, and delay could have led to currency speculation. Moggridge added that 'the parallel movement of currencies abroad to stability and to gold was also of some moment' and the British had to take into consideration the fact that 'Australia had privately decided' to return to gold and only delayed its announcement 'in response to British promises of a decision'. 6 More recently Drummond commented on the role of the dominions in the timing of the British decision, although it was Pressnell who provided the thorough and seminal discussion of the dominion factor.7 He surveyed the historical background, before discussing the financial and trading problems which compelled South Africa and Australia to seek a restoration of the gold standard, but did not analyse the motives, actions, and objectives of Australian decision-makers, and gave greater attention to South Africa than