Tables of Modern Monetary Systems by Kurt Schuler ( Return to home page )


Saint Helena

Political sketch

Today a British overseas territory. Ascension Island and the Tristan de Cunha Islands are dependencies of Saint Helena.

Saint Helena was discovered on 21 May 1502--in the Eastern church, the feast day of Saint Helena--by the Spanish navigator João de Novo, who was working for the Portuguese. The Portuguese kept the existence of the island a secret until 1588, when the English navigator Thomas Cavendish visited it on a voyage around the world. Saint Helena soon became a stop for ships en route between Europe and the East Indies around the Cape of Good Hope. The Dutch may have occupied Saint Helena about 1645 to 1651, but in 1659 the English East India Company (then formally known as the Governor and Company of Merchants of London Trading into the East Indies) took possession of the island. After a brief Dutch occupation in 1673, the East India Company retook ownership. By 1673 nearly half the inhabitants were imported slaves, but between 1826 and 1836 all slaves were freed. Napoleon was exiled to Saint Helena from October 1815 until his death in May 1821. During that period the island was placed under the jurisdiction of the British crown. Subsequently, the East India Company resumed control until 1834, when the authority of the crown was restored. Saint Helena remained reasonably prosperous as a port of call until about 1870; then steam started replacing sail, and the opening of the Suez Canal (1869) changed the pattern of sea routes. In the early 1960s the development of a telecommunications center on the island dependency of Ascension and employment there of workers from Saint Helena somewhat restored prosperity. Saint Helena was given some measure of self-rule through an Order in Council and Royal Instructions in 1966, which became effective in January 1967. The Order in Council provided for local executive and legislative councils. In 1988 Saint Helena received a constitution, which became effective in January 1989. It remains a British overseas territory today (2005). The economy depends heavily on subsidies from the British government. The main export is fish.

Wars since 1500

None.

Convertibility

The sterling area:

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914 gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925 the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973 the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong had abandoned sterling as its anchor currency. The United Kingdom abolished exchange controls on 24 October 1979, ending the sterling area.

Saint Helena alone:

Saint Helena, as a British colony, remained part of the sterling area until the area ended 24 October 1979.

Other

Defaults on or restructurings of debt to the private sector (mainly from Purcell and Kaufman 1993 and Standard & Poor's 2004): None.

Banking crises (data since 1970s mainly from Caprio and Klingebiel 1999 and Frydl 1999): None.

Currency crashes: None separate from the United Kingdom while dollarized, and none since establishing own currency.

No exchange rate data in Reinhart and Rogoff (2003).

References

Primary sources:

--Laws and decrees:

Great Britain (United Kingdom). Gazette. 1665-present. Oxford Gazette (1996-1666); London Gazette (1666-present). Oxford (1665-1666); London (1666-present): His/Her Majesty's Stationery Office from 1903. Online at <http://www.gazettes.online.co.uk>; as of September 2005, gazettes since 1900 are available.

Saint Helena. Gazette. 1845-1849, 1947-present. Saint Helena Gazette (1845-1849); The Saint Helena Government Gazette (new series, 1947-present). Jamestown.

--Publications of monetary authorities:

Apparently none.

--Web site of the current monetary authority (viewed 20 September 2005):

None; the government has a Web page, listed below, with some information on the financial system, though no statistics.

--Other publications or Web sites:

Great Britain (United Kingdom). Colonial Office. Report on Saint Helena. 1920-1938, 1947-present. St. Helena. Report for 1920 [etc.] (1920-1930); Annual Report on the Social and Economic Progress of the People of St. Helena (1921-1938); Annual Report on St. Helena for the Year 1947 [etc.] (1947-present). London (1920-1938); Jamestown (1947-present).

Saint Helena. 1914-1932. Blue Book. Jamestown. (British colonial blue books were brief surveys that included statistics of government affairs and sometimes more general statistics.)

Saint Helena, government Web site, <http://www.sainthelena.gov.sh>, viewed 20 September 2005.

Main secondary sources:

Barclays Bank (Dominion, Colonial and Overseas). 1938. A Banking Centenary: Barclays Bank (Dominion, Colonial and Overseas), 1836-1936. Plymouth, England: Mayflower Press, for private circulation. (Brief mention of a branch of the National Bank of South Africa on Saint Helena.)

Chalmers, [Sir] Robert. 1893. A History of Currency in the British Colonies. London: Eyre and Spottiswoode for Her Majesty's Stationery Office.

Henry, J[ames] A., and H. A. Siepmann. 1963. The First Hundred Years of the Standard Bank. London: Oxford University Press. (The Standard Bank operated widely in Africa; there is a one-line mention of a branch it had on Saint Helena.)

IMF ARER. 1950-present. International Monetary Fund. Annual Report on Exchange Restrictions (1950-1978), Annual Report on Exchange Arrangements and Exchange Restrictions (1979-1988), Exchange Arrangements and Exchange Restrictions: Annual Report (1989-present). Washington: International Monetary Fund. (Contains information on IMF member countries and some of their dependencies.)

Vice, David. 1983. The Coinage of British West Africa and St. Helena, 1684-1958. Birmingham: Peter Ireland (Format) Ltd.

Monetary authorities: Saint Helena

Exchange rate arrangements: Saint Helena