The Age Of Stars

sterling area / dollar pool · 20 August 1947

Sterling convertibility suspended (Anglo-American Loan convertibility crisis)

UK convertibility lasted 1947-07-15 to 1947-08-20

Pushed London to limit India's dollar drawings. It was the background to the Feb 1948 Raisman mission.

ReportedPeer-reviewed. Source: general histories (Schenk 1994; Cairncross)

Government of India · 14 August 1947

Government of India: Conclusion of the first interim sterling balances agreement between India and the UK, for the period to…

£65m

Conclusion of the first interim sterling balances agreement between India and the UK, for the period to end-December 1947; £65m released for current expenditure

VerifiedOfficial record. Source: RBIH1; KAUS1966

Government of India · regulation · 1 March 1947

Government of India: Exchange controls are put on a statutory footing by the Foreign Exchange Regulation Act, March 1947, under…

Exchange controls are put on a statutory footing by the Foreign Exchange Regulation Act, March 1947, under sterling-area arrangements

VerifiedOfficial record. Source: RBIH2-PLENTY

Reserve Bank of India / Bank of England · 15 July 1947

Reserve Bank of India / Bank of England: Sterling becomes convertible for balances released on or after 15 July 1947, as required by Section 10 of the…

Sterling becomes convertible for balances released on or after 15 July 1947, as required by Section 10 of the Anglo-American Financial Agreement

VerifiedOfficial record. Source: FRUS48v05p2d48

Banking · regulation · 14 August 1947

Reserve Bank of India / Government of India: Financial Agreement between the UK and India signed at London, fixing the sterling assets of the Reserve Bank…

1160

Financial Agreement between the UK and India signed at London, fixing the sterling assets of the Reserve Bank of India at £1,160 million, creating the blocked No. 2 Account and the free No. 1 Account at the Bank of England, and providing for an immediate transfer of £35 million (less an adjustment) and a £30 million working balance. Signed for the UK by Wilfrid Eady (Second Secretary, HM Treasury) and for India by V. Narahari Rao. Article X(a) extends the meaning of "the Government of India" to both new Dominions after 15 August 1947. In force 14 August 1947; terminates 31 December 1947

VerifiedOfficial record. Source: UNTS11-176; HAN4907

Government of India / HM Treasury · 14 August 1947

Government of India / HM Treasury: Side letters of the same date record understandings on (i) Indian private sterling balances, (ii) India's…

Side letters of the same date record understandings on (i) Indian private sterling balances, (ii) India's Post-War Dollar Fund, (iii) the Silver Redemption Reserve maintained under section 36 of the Reserve Bank of India Act, 1934, (iv) the rate of interest on the sterling balances (the Reserve Bank undertakes not to alter the disposition of its sterling assets so as to increase appreciably the overall rate then earned), and (v) that the Agreement is interim and without prejudice

VerifiedOfficial record. Source: UNTS11-176

Reserve Bank of India · 15 August 1947

The Reserve Bank of India continues as central bank and banker to the Government of Pakistan from 15 August…

The Reserve Bank of India continues as central bank and banker to the Government of Pakistan from 15 August 1947 until 1 July 1948, when the State Bank of Pakistan takes over

VerifiedPeer-reviewed. Source: ANKIT2023; RBIH2-PLENTY

Government of the United Kingdom · 20 August 1947

Government of the United Kingdom: Sterling convertibility is suspended, technically breaching Section 10 of the Anglo-American Financial…

Sterling convertibility is suspended, technically breaching Section 10 of the Anglo-American Financial Agreement. A US Treasury memorandum of 20 February 1948 records that "this same problem has existed generally since the suspension of convertibility on August 20, 1947"

VerifiedOfficial record. Source: FRUS48v05p2d48

Reserve Bank of India · 1 December 1947

Reserve Bank of India: Partition Council meeting, Case No

6.95

PC/218/20/47, "Sterling Assets of the Reserve Bank of India." The two Dominions agree: (para. 2) each will negotiate separately with HMG for releases beyond 1 January 1948, and the Reserve Bank will open a separate "Pakistan" account or accounts with the Bank of England; (para. 3) from 1 January 1948 each Dominion retains its own foreign-exchange earnings, invisible earnings being allocated by the territory in which the transaction arises; (para. 4) India will transfer to Pakistan's account a sterling sum equal to the difference between Rs 6.95 crores and the c.i.f. value of "limit" items actually imported into Pakistan ports between 1 July and 31 December 1947

VerifiedOfficial record. Source: PC218; UNTS134-1796; UNTS134-1797

Westminster Bank Ltd, London · 22 October 1947

The Hyderabad State Bank Account was opened at Westminster Bank with £2,000,000 received from the Imperial…

GBP 2000000

The Hyderabad State Bank Account was opened at Westminster Bank with £2,000,000 received from the Imperial Bank of India, London, on the instruction of the Nizam's Government

VerifiedOfficial record. Source: [2019] EWHC 2551 (Ch), paras 87–95 (Transaction 1, Annex 3)

Government of Hyderabad · regulation · 22 December 1947

The Nizam's Government promulgated an Ordinance (effective 22 December 1947) requiring all cash receipts and…

The Nizam's Government promulgated an Ordinance (effective 22 December 1947) requiring all cash receipts and payments for goods sold, property conveyed or services rendered in Hyderabad to be made only in the State's currency (Hali Sicca). The official exchange rate in December 1947 was Hali Sicca Rs 116-7-0 for Indian Rs 100

VerifiedOfficial record. Source: RBIH1, "The Bank and the Partition", pp. 581–582

Banking · regulation · 1 August 1947

The Pakistan Monetary System and Reserve Bank Order 1947 is issued, prescribing a transition period of one…

The Pakistan Monetary System and Reserve Bank Order 1947 is issued, prescribing a transition period of one year during which the Reserve Bank of India continues to perform central banking functions for Pakistan. The Order also contains the formula for Pakistan's share of the Reserve Bank's assets

ReportedOfficial record. Source: VAKIL1950; RBIAR4748` (snippet only)

Banking · 2 December 1947

Government of India / Government of Pakistan: An agreement on the transfer of the remaining Pakistani share of the cash balances is reached

75

Brecher: "An agreement on the transfer of the remaining Pakistani share of the cash balances was reached on December 2nd, 1947, and Patel was expected to announce its terms one week later." Patel instead told Parliament on 9 December that implementation would be delayed

ReportedPeer-reviewed. Source: BRECHER1953

Banking · 11 December 1947

Government of India / Government of Pakistan: An eight-point India–Pakistan agreement is issued in New Delhi; the New York Times reports it on 13 December…

An eight-point India–Pakistan agreement is issued in New Delhi; the New York Times reports it on 13 December 1947 under the headline "India and Pakistan Get Pact Details; 8-Point Agreement Is Issued in New Delhi". A New Zealand newspaper carries a "PAKISTAN-INDIAN AGREEMENT" item under 11 December 1947

ReportedPress. Source: NYT1947-12-13

foreign exchange

Foreign Exchange Regulation Act, 1947

The statutory basis of India's post-war exchange restrictions; the RBI administered restrictions on remittances to Pakistan and Afghanistan under it from 27 February 1951

VerifiedOfficial record. Source: RCF5051

RBI sterling balances

Sterling balances agreement (August 1947)

Interim six-month agreement; two-account structure (No. 1 operative, No. 2 blocked); £1,160m RBI sterling assets taken as the base; £65m released; published as Cmd. 7195

VerifiedOfficial record. Source: eparlib.nic.in.57701 ch. II.2.20–2.21; HC Deb 15 Jul 1948 vol 453 c1404 (Cripps naming Cmd. 7195)

sterling area

Sterling-area exchange control

The IOR files at IOR/L/E/9/303–365 are the India Office's running record of the sterling-balances negotiation, including No. I and II account estimates (50/18), policy regarding sterling releases (50/36) and the future of sterling balances (50/39)

VerifiedOfficial record. Source: IOR/L/E/9/321; /356; /360; /361

Hyderabad State

Hyderabad currency Ordinance

All cash receipts and payments in Hyderabad to be made only in Hali Sicca currency; the Ordinance did not affect bank accounts kept in Indian rupees or the free transfer of funds to settle liabilities outside the State

VerifiedOfficial record. Source: RBIH1 pp. 581–582

Government of India · regulation · 1 August 1947

Government of India: Pakistan Monetary System and Reserve Bank Order 1948", not found

The Order dated 1948 referred to in the brief for this file could not be located in any source I opened. What is documented is (a) the Pakistan Monetary System and Reserve Bank Order 1947 (above) and (b) a separate instrument establishing the State Bank of Pakistan with effect from 1 July 1948, whose title and date I did not verify

UnconfirmedOfficial record. Source: VAKIL1950` (for the 1947 Order)

Imports and Exports (Control) Act, 1947 (Act XVIII of 1947, March 1947)

The statutory basis for the licensing regime that lasted until 1992

It carried the wartime controls over into peacetime.

ReportedOfficial record. Source: India Code

Foreign Exchange Regulation Act, 1947

Exchange control administered by the RBI. Dollar spending governed by the sterling-area dollar pool.

ReportedOfficial record. Source: RBI

GATT: India an original contracting party (signed at Geneva 1947-10-30; provisional application for India from 1948-07-08)

India bound some tariffs, and its existing Commonwealth preferences were grandfathered under Art

I:2 (margins frozen, no new ones).

ReportedOfficial record. Source: WTO, GATT 1947 legal text; PIIE "India in the GATT and the WTO" (ch. 3)

South Asia (J&K)

First India–Pakistan war (Kashmir); UN-brokered ceasefire 1949-01-01

Defence spending on top of Partition refugee burden (~15 mn displaced across both sides); drawdown of sterling balances; rupee devalued with sterling 1949-09

ReportedOfficial record. Source: UNCIP reports / UN SC Res. 47 (1948); Govt of India Ministry of Defence official history

South Asia

Partition of British India; mass migration and violence

Refugee rehabilitation spending. Division of assets and liabilities: Pakistan's share of the sterling balances, about £180 mn transferred by mid-1949. Jute and cotton supply areas cut off from Indian mills (Calcutta, Bombay).

ReportedPeer-reviewed. Source: Abreu TD 643; general histories

South Asia

First Kashmir war

Defence spending in the first budgets. Suspension of Pakistan's partition cash balance (Rs 55 crore dispute, released Jan 1948).

ReportedPeer-reviewed. Source: general histories

general cargo

Partition-period coastal and Karachi–Bombay trade

UnconfirmedOfficial record. Source: Not found by me.