British economic conditions and policy in the reconstruction phase after the Second World War were dominated by the external setting, and above all by the dollar shortage. Yet although British historians have analysed the economic relationship with the United States very fully, Britain's other dollar problem, that with Canada, has not received the attention it warrants. Canadian finance and supplies were vital to Britain during the years of reconstruction. Reflecting the scale of these, an enormous amount of time and effort was devoted in Whitehall to the Canadian 'problem', and the frequency of bilateral discussions between London and Ottawa is witness to the importance policy-makers attached to it. Part of the difficulty was that Canada found itself in the anomalous position of being a Commonwealth member outside the charmed circle of the sterling area, and, because Britain was short of dollars, being actively discriminated against in the British market when London was simultaneously attempting to encourage alternative supplies from the sterling area Commonwealth.