Canada and Newfoundland
Canada and Newfoundland did not join the sterling area because their dollar had effectively been linked to the US dollar until they were forced off the gold standard in 1931 along with Britain. But while countries like Australia, New Zealand and South Africa responded to the end of the gold standard by pegging their pounds to the pound sterling, Canada and Newfoundland instead pegged their dollars to the US dollar. So Canada and Newfoundland did not stand to gain by joining an exchange control bloc intended to protect the external value of sterling. The absence of Canada and Newfoundland from the sterling area was beneficial to Britain as it curtailed capital flight to the North American mainland. Canada nevertheless introduced its own exchange controls at the outbreak of war; they were kept until 1953. Canada's exchange controls were 'sterling area friendly' in that their purpose was more to prevent capital flight to the USA than to the sterling area.
Read more about this topic: Sterling Area
Famous quotes containing the word canada:
“What makes the United States government, on the whole, more tolerable—I mean for us lucky white men—is the fact that there is so much less of government with us.... But in Canada you are reminded of the government every day. It parades itself before you. It is not content to be the servant, but will be the master; and every day it goes out to the Plains of Abraham or to the Champs de Mars and exhibits itself and toots.”
—Henry David Thoreau (1817–1862)