- Policy towards imperial trade went through two distinct phases in inter-war period.
- After 1920s, Britain recreated economic system existing before 1914 where Empire had no special preference. Returned to gold standard in 1925 in order to stabilise international trade. However, Colonial Development Act of 1929 still provided Treasury funds to support colonial development projects therefore some attention to Empire.
- After Great Depression however, emphasis on importance of Empire for British commerce and imports from Empire increased. Forced to abandon gold standard in 1931 but trade with Empire in sterling proved valuable.
Most countries of Empire fixed value of currency to sterling and some kept national reserves in sterling, reflecting close ties with Britain. Gave access to British market for countries in Sterling Area, ensuring profit outlet for British overseas investment at time when most international opportunities closed down. Britain used Empire to soften impact of Great Depression.