Initially, sterling circulated as the Tongan currencies, supplemented from 1921 by banknotes issued by the Tongan government.
When the Australian pound devalued relative to sterling at the beginning of the Great Depression, this caused considerable confusion on the smaller islands of the British Western Pacific.
In the mid-1930s, people in these islands were asking whether or not the money in their sterling accounts were to be considered as sterling or the Australian pound, and clarification was sought.
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