Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

2 reserved for colonial residents. The Royal Charter that established the bank was granted by King William IV on June 1, 1836. So it was that onMay 15, 1837, the Colonial Bank started operations in Barbados, Trinidad and British Guiana. By 1841, Barbados was the regional headquarters for the Colonial Bank with branches in Trinidad, Tobago, British Guiana, St. Lucia, Grenada, Antigua, Dominica, St. Kitts and St. Vincent. 2 The establishment of the Colonial Bank was greeted in some quarters with hostility and suspicion. One outspoken opponent was the Barbadian sugar cane technologist John Redman Bovell, whose likeness is found on the Barbados $2 note. He joined with interests in the region and the UK to set up the rival West India Bank around 1840. The West India Bank failed in 1848 but not before providing such fierce competition for the Colonial Bank that the latter suffered losses for most of the 1840s. The passage of the Savings Bank Bill in June 1848 paved the way for the establishment of the Government Savings Bank in 1852. This institution did not pose any real threat to the Colonial Bank since it mainly accepted small savings deposits and the Colonial Bank became its banker. Early currency arrangements Its charter empowered the Colonial Bank to issue currency in the territories in which it operated. However, apart from the Colonial Bank’s notes, Spanish doubloons, Mexican dollars, Colombian coins and sterling also circulated freely in Barbados. This proliferation of currencies in the West Indian colonies had long been a cause of concern to the British Government. In 1825, an unsuccessful attempt had been made to rationalise the situation and, in 1836, the Governor of Barbados, Sir Lionel Smith, had proclaimed that four shillings and two pence were equivalent to a dollar. However, the most drastic steps were taken in 1893, when the Barbados Legislature banned the use of Spanish, Mexican and Colombian currency as legal tender. The legislature determined that the term “dollar” should be taken to mean the sum of four shillings and two pence in British money. 3