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The curious incident of the franc in the Gambia: exchange rate instability and imperial monetary systems in the 1920s

Published online by Cambridge University Press:  18 January 2016

Leigh Gardner
Leigh Gardner*
Affiliation:
London School of Economics and Stellenbosch University
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Abstract

In 1922, British colonial Gambia demonetized the French 5-franc coin, which had been legal tender at a fixed rate in the colony since 1843. Until World War I, this rate was close to the international rate under the gold standard. When the franc began to depreciate in 1918, however, a gap emerged between the Gambian rate and the international rate, prompting a rapid influx of the coins. The demonetization cost the colonial administration over a year's revenue, affecting the later development of the colony. The 1920s have long been a fruitful period for the study of monetary history owing to the instability of exchange rates during and after the war. This article extends the study of this period to examine the impact of these changes on dependent colonies in West Africa, highlighting the importance of local compromises and particularities in colonial monetary systems.

Keywords

colonialismexchange ratesWest Africa

JEL classification

N47: Africa • Oceania N27: Africa • Oceania N17: Africa • Oceania
Type
Articles
Information
Financial History Review , Volume 22 , Issue 3 , December 2015 , pp. 291 - 314
Copyright
Copyright © European Association for Banking and Financial History e.V. 2016 

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