© Roy Davies & Glyn Davies, 1996 & 1999.
Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).
1935-c.1970 | Continuous moderate inflation in Britain |
---|---|
The general level of prices rises every year but at a moderate rate.
p 395-396 |
|
1944-1971 | The Bretton Woods agreement |
The agreement, reached at Bretton Woods in New Hampshire, USA, envisages a
system of convertible currencies, fixed exchange rates, and free trade. New
financial institutions are to be established; the International Monetary Fund
and the International Bank for Reconstruction and Development. Plans for an
International Trade Organization fail as they are not ratified by the US
Congress but they pave the way for the General Agreement on Tariffs and Trade
(GATT).
p 21,444-445,516 |
|
1950-1970 | Japanese economic miracle |
Average annual growth in the 1950s is 9.2%, comfortably exceeding an ambitious
plan for doubling the average income in a decade. In the 1960s growth is even
higher, averaging 10.7% annually.
p 589 |
|
1952-1967 | Mergers and amalgamations greatly reduce the number of Indian banks |
The authorities encourage mergers and amalgamation among smaller banks to
strengthen the banking system. The number of reporting banks declines
from 517 in 1952 to reach its low point of 90 in 1967.
p 624 |
|
c. 1960- | The Population Explosion becomes a matter of increasing concern |
The rapid increase in the world's population, especially in the Third World,
hampers the attempts of the poorest nations to escape from their poverty and
adds to inflationary pressures, which tend to be far worse in developing
countries than industrial ones, as well as exacerbating environmental problems.
p 5-9,43,593-597 |
|
c. 1960 | Primitive money largely superseded |
By the 1960s primitive forms of money, e.g. cowrie shells and manillas, that
were still in widespread circulation only a few decades earlier have virtually
disappeared from use in most countries, with a few minor exceptions (e.g. the
use of fei stones in Yap). The replacement of primitive by modern money,
together with the move from subsistence to market economies, means that the
lives of more people are directly affected by monetary policy.
p 8,36,600 |
|
1960 | French currency reform |
The main recommendation of the Rueff committee is carried out with the
replacement of the old franc by a new heavy franc equivalent to 100 of
the old.
p 564 |
|
1961 | Organization for Economic Cooperation and Development founded |
This is created by broadening the membership of the old Organization for
European Economic Co-operation.
p 444 |
|
1961 | Lagos Stock Exchange starts operations in Nigeria |
Initially it deals in only 19 securities but by 1983 the total reaches 168 and
the number of shareholders exceeds 700,000.
p 612,620 |
|
1962 | West African Currency Board abolished |
The new central banks in Ghana and Nigeria have taken over its functions.
p 609-610 |
|
1963 | Repeal of the US Silver Purchase Act |
The longevity of the Act, passed in 1934, was a sign of the lingering power of
the silver lobby.
p 515 |
|
1965-1987 | Rapid expansion of US banks abroad |
From 13 US banks with a total of about 200 foreign branches the numbers
increase to about 200 banks with around 800 branches. The growth is temporarily
interrupted by the stock market crash of 1987.
p 525 |
|
1965-1967 | Liberalization of the French financial markets |
The rigid barriers between deposit and investment banking are broken down and
opening new bank branches is made easier. Freedom is given for the leasing of
capital goods on hire purchase and various other restrictions are removed.
p 564 |
|
c. 1965 | Fei stone currency still in use in Yap |
Despite the inroads of coins and banknotes the use of fei stones as currency in
the central Pacific islands of Yap has still not completely disappeared by the
mid-1960s. These stones, varying in size from saucers to millstones were
quarried in Palau, 260 miles from Yap, or the even more distant Guam.
p 37 |
|
1967 | Britain devalues the pound against the dollar, from $2.80 to $2.40 |
The prime minister Harold Wilson's pronouncement that the pound in your
pocket is not devalued is rendered invalid by an increase in inflation.
p 398,521 |
|
1968 | National Giro set up in Britain |
Much later than most European countries, Britain sets up a postal giro system
for money transfer. Because of the lateness of its creation the clearing banks
and building societies have already captured a large part of the working class
market that is one of its main targets.
p 405 |
|
1968 | US balance of payments in deficit |
For the first time since 1893 the US runs a deficit in its balance of trade.
p 521 |
|
1968 | Development Bank of Singapore founded |
It is created to provide long-term finance for industry and to support the
government's chosen priority sectors.
p 628 |
|
1969-1983 | Number of banking offices in India increases five-fold |
The government's attempts to control rural moneylenders result in such a
shortage of credit in many villages that agricultural output falls. The
authorities react by stimulating the growth of cooperatives and the formation
of bank branches in villages. The number of banking offices increases from
8,262 to 42,016.
p 624-625 |
|
1969 | India nationalizes its 14 largest private banks |
Later other private Indian banks are also nationalized but not foreign banks.
p 624 |
|
1969 | International Monetary Fund creates Special Drawing Rights |
These are to tide over countries with balance of payments difficulties. By this
time all countries have dispensed with internal circulation of gold and, in
most cases, do without gold backing for their currencies. The creation of SDRs
makes international trade less dependent on the constraints of an almost fixed
supply of gold or the vagaries of favourite currencies.
p 519-522 |
|
1970 | Building society deposits overtake those of London clearing banks |
The building societies' success in capturing a growing share of the rising
total of personal savings is partly due to the huge growth in their branch
network and partly due to the official belief that only banks create money and
hence need to have their powers controlled.
p 408-410 |
|
1970 | American banks in Britain overtake the London clearing banks |
By the end of 1970 deposits in American banks in Britain have grown seventy-one
times since 1959 and exceed those of the London clearing banks and are also 10
times those of the Scottish banks.
p 408,412-418 |
|
1970 | US Bank Holding Company Amendment Act |
This is intended to close the loophole allowing banks to evade restrictions on
opening branches. However its effect is limited as subsidiaries are allowed to
engage in certain banking activities.
p 539 |
|
1971 | The Bretton Woods agreement breaks down |
After a big drop in US gold reserves and a large increase in foreigners' claims
on US dollars, the US suspends the convertibility of the dollar to gold.
Although the IMF had been set up to promote exchange rate stability it adapts
quickly to a world of floating exchange rates.
p 445,518,521 |
|
1971 | Britain decimalises its currency |
Instead of 12 pence in a shilling and 20 shillings in a pound, the pound is
divided into 100 new pence.
p 442 |
|
1972 | Britain leaves the EEC Snake and floats the pound |
The EEC narrower margins scheme (the so-called snake) sets narrow
limits for fluctuations in the values of members' currencies. After only 6
weeks Britain leaves and the pound floats freely against all other currencies
for the next 18 years.
p 445-446 |
|
1973 | Britain joins the European Economic Community |
The European Economic Community is enlarged by the accession of Britain,
Denmark and Ireland in January 1973.
p 443 |
|
1973 | The US abandons the gold standard |
As the system of fixed exchange rates starts to break down the US devalues the
dollar twice and then gives up the attempt to fix its price in terms of gold.
p 521-522 |
|
1973-1974 | Secondary banking crisis in Britain |
Partly as a result of the Bank of England's adoption of a new policy in 1971 of
increasing competition in the supply of credit a crisis develops in finance
houses lending money for the purchase of consumer durables. A lifeboat
operation prevents about 30 secondary banks from collapsing and at least
another 30 receive other forms of assistance.
p 406-407,414,419-423 |
|
1974 | OPEC oil shock |
The price of oil is quadrupled transferring large sums which would have been
spent, to OPEC countries whose powers of absorption are low and savings high.
The rate of growth of world trade is greatly reduced as is the growth of the
Japanese economy compared with its miracle years. Although western
economies are badly hit the less developed countries fare worst of all.
p 590,594,597,599,615,632 |
|
1974 | Eurodollar market crisis |
The failure of the West German Bankhaus I.D. Herstatt precipitates an
international crisis. Prompt co-operation by various international authorities
averts widespread failure.
p 427 |
|
1976 | Maine legalizes entry by banks from other states |
This starts a widespread move in other states to legalize interstate banking.
In most cases entry is restricted to banks from neighbouring states but some
states allow entry from any part of the US.
p 541 |
|
1976 | British government adopts monetarism |
A financial crisis causes the socialist government to abandon Keynesian
policies after inflation reaches over 25% and adopt monetarism instead.
p 429-430 |
|
1976 | Friedrich Hayek calls for choice in currency and the denationalization of money |
Hayek argues that the freedom of consumers to use whatever currency they choose
would be a better guarantor of the value of money than government monopoly.
p 647-648,650 |
|
1978-1980 | 2nd OPEC oil price shock |
OPEC doubles the price of oil between 1978 and 1980. This leads to an increase
in interest rates, pushes industrial countries into a deep recession, and is a
contributing factor in the Third World debt crisis of the 1980s and 1990s.
p 633-634 |
|
1978 | US Humphrey-Hawkins or Full Employment and Balanced Growth Act |
This seeks to combine Keynesian concern for full employment with monetarism:
two incompatible bed-mates.
p 531 |
|
1978 | Occidental Petroleum in $20 billion barter deal with Soviet Union |
Barter is still widely used in world trade, particularly in deals involving
communist countries and countries short of hard currency.
p 20,21 |
|
1979-1990 | Thatcherism in Britain |
Margaret Thatcher greatly strengthens the commitment to monetarism.
Manufacturing industry is badly affected but the financial sector is
strengthened. The average rate of inflation is actually higher than during the
Keynesian era from 1934-1976.
p 431-441 |
|
1979 | European Monetary System created |
This includes an exchange rate mechanism allowing narrow fluctuations of 2.25%
(6% in the case of certain weak currencies) either side of an agreed central
rate, a strengthening of the European Monetary Cooperation Fund, founded in
1973, by the deposit of 20% of each member's gold and dollar reserves, and the
creation of the new European Currency Unit or Ecu, based on the weighted
average of 10 European currencies.
p 447-448 |
|
1979 | Britain abolishes all foreign exchange controls |
Their removal strengthens the role of the City of London in the world's
financial markets.
p 448 |
|
1979 | Banking Act increases regulatory powers of the Bank of England |
The purpose of the Act is to rectify weaknesses in the financial system
revealed by the secondary banking crisis in 1973-1974.
p 424-425 |
Go to the Top | Top |
Go the the Chronology of Money | Go to the previous part of the chronology | Go to the next part of the chronology |
Home Page | 1939 - 1959 | 1980 - 2002 |