Economic Tensions and Conflict in the Commonwealth, 1945-c.1951

In the immediate aftermath of the Second World War, economicrelations between Britain and the Commonwealth were very close,and the Empire was of greater economic importance to Britainthan at any previous time. International economic conditionswere dominated by the dollar shortage, and especially afterthe sterling crisis of 1947 most of the sterling area membersof the Commonwealth were drawn into even closer interdependence.But, in contrast to the expectations of many policy makers,the world economy after the war was characterized by buoyantdemand and limited supply. In particular, the demands placedon British production and finance highlighted the limitationsof capacity. Development in both the independent and ColonialCommonwealth was frustrated. The inadequacies of the closedsystem revealed in the late 1940s encouraged Commonwealth countriesto push for the restoration of currency convertibility and ofmultilateralism in the 1950s.