Depression to Decolonisation:UWI lecturer produces first major history of banking operations in the region
Many modern features of the commercial banking sector today were established in the 19th and early 20th centuries, when the sector first emerged. Senior lecturer in the department of history at the University of the West Indies, Dr Kathleen Monteith, explored these early developments in her research into the history of the West Indian operations of Barclays Bank (DCO) during the period 1926-1962. The result is a book, Depression to Decolonisation: Barclays Bank (DCO) in the West Indies, 1926-1962, the first major history of a commercial bank's operation in the region.
The book, which was launched at the university's Mona campus recently, contributes to the broadening of the scope of West Indian historiography into the global field of business history. It also makes a significant contribution to the economic and social history of the West Indies, during the first half of the 20th century.
loans guarantee scheme
The publication explores the reasons the bank's operations in the West Indies was able to survive the most devastating economic depression of the 20th century, which involved a drastic decline in the price of sugar on the international market, a commodity in which the majority of the bank's clients in the West Indies specialised. According to Dr Monteith, the answer rests in the special arrangements in the form of the British Government's loans guarantee scheme, by which it agreed to share the risks with the bank in its provision of credit to the sugar industry.
Even more helpful was the extension of the imperial preferential tariff rate on colonial produce entering the British market in 1932. This had the immediate effect of increasing the returns on production and export of sugar from the West Indies, since the commodity was assured of an expanded market and a profitable price under the cover of preferential rates of duty. The result was a tremendous growth in exports to the British market, which meant more profitable business for the bank.
Collusion and competition - The Canadian banks
The publication also explores the extent to which Barclays Bank (DCO) coped with competition from the Canadian banks and, in particular, the Bank of Nova Scotia (BNS) in Jamaica. Dr Monteith says, it is clear that collusion allowed for some degree of price competition. What was even clearer was that the Canadian banks were prepared to use a variety of non-price-competitive strategies to undermine the position of the British bank.
She contends that during those years, Barclays Bank (DCO) exhibited inflexibility and insufficient sagacity, both of which contributed to a poor image in the eyes of the public - particularly in Jamaica in the 1930s. The Canadian banks, particularly BNS, were only too willing to exploit. Indeed, it was in Jamaica that Barclays Bank (DCO) faced its greatest competitive threat, which was attributed largely to the presence of BNS.
Dr Monteith's work demonstrates that there was a strong tradition of commercial bank regulation in place from the 19th century, and this continued into the period leading up to independence.
There were modern features of commercial bank regulation in place in the period before political independence. These included paid up capital requirements, inspection and publication of financial statements, protection of depositors' and currency note holders' interests in the form of security requirements for bank notes in circulation.
Change - Economic expansion and decolonisation
The range of bank products and services was also broadened in response to the economic expansion in the region during the 1940s and 1950s.
During this same period, as Barclays Bank (DCO) recruitment practices came under severe criticism, the bank, like the Canadian banks, was forced to modify these practices, which resulted in changes in terms of race, nationality and gender. No longer was bank staff all-white, predominantly male and mostly expatriate. The increased recruitment of West Indians, and more so West Indian women, was in the interest of keeping operational costs down. As a consequence, there was increased feminisation of the banking industry in the region during the 1950s and beyond.
Decentralisation of the banks operations was on the cards after 1940 and was fully realised in 1952 with the establishment of the Local Directorship in Barbados.
This was necessary given the structural changes taking place within the region's economy, which necessitated a more rapid response, as well as the fact that regulation of the banking sector would now be from within the region instead of London.
The Jamaican branch operations of Barclays Bank (DCO) became the National Commercial Bank when, in 1977, these assets were bought by the Jamaican government.