Dedominionization: the Anglo-Australian experience, 1939–1945

Abstract

The role of decolonization in the decline of the British empire has received a great deal of attention. In comparison there has been little research or analysis of the process of dedominionization affecting Australia and the other dominions. During the Second World War economic ties were seriously weakened and there were substantial conflicts over economic policy between the British and Australian governments. Australia refused to reduce imports in order to conserve foreign exchange, thus contributing to the United Kingdom's debt burden. The Australian government insisted that the British guarantee Australia's sterling balances and refused to adopt the stringent fiscal policies requested by the Bank of England and the British treasury. Australia also took the opportunity to expand domestic manufacturing industry at the expense of British manufacturers. Economic separation and conflict were complemented by political and strategic differences. In particular, the Australian government realized that British military priorities made it impossible for the United Kingdom to defend Australia. This led the Australians towards a policy of cooperating with the British embargo on Japan, only to the extent that this would be unlikely to provoke Japanese military retaliation. In general, the Australians preferred a policy of compromise in the Far East to one of deterrence preferred by the British.