CHAPTER 8

I cannot say why I specialized in Banking and Currency – I think it was a hunch and perhaps literature was more readily available in Ceylon. (From an undated document (c.1950) in N.U. Jayawardena Personal Files. NU seemed to have an instinct for perceiving things that would become important in the economic and commercial development of Sri Lanka, as persons who watched his career over the years would observe. This would be only the first of such “hunches.”)

(N.U. Jayawardena reminiscing in the 1950s on why he selected this subject for his B.Sc. (Econ.) degree in 1931)

The 1930s were transitional years in NU’s career, when he added to his academic knowledge of economics in its practical and operational aspects. During this period, his abilities were recognized by persons of standing under whom he worked. This helped greatly in his development. What is more, his marriage gave him a certain degree of financial security and a congenial environment in which, while employed, to pursue his studies. NU in later years, often spoke with deep gratitude of the support and encouragement that his wife Gertrude gave him in his studies.

NU, even after entering the Clerical Service, did not relinquish hopes of studying for a degree. The circumstances in which he realized them were in part accidental. Shortly after he passed the London Matriculation in the First Division, he received a letter from Wolsey Hall, the well-known Correspondence College in Britain, enclosing a prospectus of study for degrees including the B.Sc. Economics. It also suggested that a knowledge of economics was greatly advantageous for public servants, especially those in colonial countries. Spurred on by this letter, NU registered for the course while working as a clerk. According to NU, if not for the Wolsey Hall letter, he never would have thought of studying economics. He had always wanted to be a doctor or lawyer but could only aspire to the clerical service. The letter from Wolsey Hall placed him on a path that would take him to heights far beyond what he then could have imagined.

Wolsey Hall, Oxford, was founded by J. William Knipe in 1894, at a time when access to a higher education – which had been largely the preserve of the elite – was beginning to become more widely available to other classes in society. Catering to this increasing demand

for education, Wolsey Hall offered tuition by correspondence for British university degrees and other examinations, especially for persons holding jobs, as well as others unable to study on campus for one reason or other. It also was a great boon for those in the colonies who wanted to qualify through external studies. Such correspondence courses and external examinations were a type of social revolution, which gave those who were poor and underprivileged, the chance for a higher education.

Montage of correspondence related to NU’s Economics degree

After four years, while working as a clerk in the Public Works Department, NU completed his B.Sc. (Econ.) degree. The degree was divided into the Intermediate, Parts I & II, and the Finals. Parts I & II included Economics, Economic History, British Constitution, Geography, Mathematics, Logic, and a language (French or German). ( According to notes in his Personal Files, NU studied both German and French. As part of its course requirements, the LSE required B.Sc. (Econ.) candidates to learn one of the two languages. The 1930 Calendar of the LSE B.Sc. (Econ.) stated that the Intermediate Part I examination would require candidates to read from works in either French, German and Italian and that they would pass the examination only if they proved able to read “with intelligence” French or German or Italian. NU’s grounding in Latin would certainly have helped him in learning French and German.) The final part consisted of Economics, Banking and Currency,

Economic History, English Law, and Statistics. Several months after his final examination in June 1931, NU was informed by Wolsey Hall that he had passed with Second Class Honours and that he was the only overseas candidate to be awarded an honours degree at the External B.Sc. (Econ.) examination. (Letter from the Registrar of Wolsey Hall, dated 11 November 1931 (N.U. Jayawardena Personal Files). NU now was also the only person in the Ceylon Clerical Services to hold a B.Sc. (Econ.) degree.

Aiming for a Higher Degree

NU’s desire for higher education did not end with this achievement. Even before he received his results, he made direct inquiries to London University about the possibility of doing externally a Masters degree in Economics from the London School of Economics (LSE). He began correspondence with some of its lecturers about the courses available and the required reading. He wrote to the Advisory Service for External Students of the University of London, and registered for the postgraduate M.Sc. (Econ.) degree in 1931.

At the same time, NU asked the local Director of Education in Sri Lanka, to inquire if this examination could be held locally, a request that was eventually granted. NU also asked for written course material. This, he was told, was not possible, but the University Correspondence College could provide the services of a tutor to help devise a list of course material, that would cost 7 shillings an hour, with a minimum fee for 4 hours. NU scribbled in the margin of this letter, “too expensive!”

Excerpt from the letter

Copious correspondence followed between NU and the University to decide on both his general and special subjects. In the end, NU and his LSE advisor settled on “Organisation of Monetary and Banking Institutions” as his general subject, and significantly, “Central Banks” as his special subject. It is remarkable that NU should have chosen Central Banks as a special subject, given the relatively undeveloped banking sector existing at that time in Sri Lanka.

The cost of books and the difficulties in securing them were a hurdle.( In a letter to his father-in-law, NU estimated the cost for the required books to be Rs.125 (N.U. Jayawardena Personal Files). His LSE advisor probably mistook NU’s delay in resolving this dilemma as indecision on his part. A letter from the External Department conveys what his advisor felt about NU’s interminable inquiries:

This student appears to be asking innumerable questions to postpone making up his own mind. I sympathize with the very real difficulty he must have in procuring books, but he must face the facts and realize that the M.Sc. Examination… must necessarily call for more intensive reading.

Not to be beaten, NU inquired about borrowing books from the University Library, but was told that it was against the rules for books to be sent out of Britain. Many important economic works were written in French or German, and according to his advisor, few translations were available. In deciding which subjects would be the most feasible for an external student, his advisor observed that:

The General subject of the ‘Organisation of Monetary and Banking Institutions’ with ‘Central Banks’ as a special subject would offer certainadvantages in the way of available literature.

Among the subjects available, he suggested that “Monetary Theory… might be of greater practical value to a person engaged in Government Service.”( Letter from the Secretary of the LSE External Department to NU, dated 12 September 1932 (N.U. Jayawardena Personal Files).

Page from NU’s appeal to his father-in-law

NU persisted in trying to find the means to pursue his goal. In December 1931, in a moving four-page letter, he turned to his father- in-law for financial assistance. He did so “with a certain amount of diffidence.” There were three things, he wrote, that made for success in the examination: “a good brain; a strong will and money to carry on the studies.” “I believe,” he added, “I have got the first two, but am lacking the third.” NU estimated the cost of the M.Sc. (Econ.) to be a total of Rs. 548, and added that he would only be able to bear some of the cost if he got “a better appointment,” or if rubber prices improved, enabling “us to get something from the estate,” which was part of his marriage settlement. He added that, if successful in the M.Sc. (Econ.) examination, he would be “the only Ceylonese with that degree.

” He ended the letter, disarmingly, saying he would understand if his “preposterous” request was turned down, but reasoned why he had to make this request. It was to ensure that he would have “no lost opportunities to regret later in my life,” and because, in his own words: “I am like that elastic piece of rubber which bounces up highest when it is pressed and trampled most” (Letter to Norman Wickramasinghe, 19 Dec. 1931). These last words would prove to be prescient. NU’s request was granted, and his letter returned to him with the emphatic words: “I would gladly comply with your wishes to enable you to take up the higher exam!” written in blue pencil at the top of the letter. However, for reasons unknown, NU did not take up his studies.

From his protracted correspondence with the university, it appears that he had managed to postpone the examination until 1935. He was, in fact, compelled to do so. Rubber prices had crashed in the early 1930s, and much of his father-in-law’s wealth came from his holdings in rubber. Two other factors may have contributed to his decision. One was an increasing workload, especially connected with the Banking Commission of 1934 (see Chapter 9); and the other was the births of his sons, Lalith (Lal) in 1934 and Nimal in 1936. However, NU’s ambition to continue his studies would be realized in 1938, when he was given a scholarship to attend the London School of Economics (LSE) to study Business Administration.

Early Interest in Central Banking

Even though NU did not formally study for the M.Sc. (Econ.) degree, it is interesting to take note of the advice and reading list his advisor had sent and the latter’s comments about Central Banking, which was a newly emerging area of study at the time (Letter from the Secretary of the LSE External Department to NU, dated 12 September 1932 (N.U. Jayawardena Personal Files).

Central Banking policy is in the centre of modern theoretical discussions, and acquaintance with and understanding of these is essential for the candidate. Keynes’ Treatise and Hayek’s Prices and Production are perhaps the most important recent contributions. (N.U. Jayawardena personal files)

NU was also advised that, “in the study of modern central banks” he should “concentrate chiefly on England, USA, Germany and France,” but to also give some attention “to other countries… where the organization of commercial banks is less developed – and to countries which have at present no central bank but are thinking of establishing one” (Letter from the Secretary of the LSE External Department to NU, dated 12 September 1932 (N.U. Jayawardena Personal Files).).

The exhaustive reading list sent by the advisor for the degree included documents and books on central banking in England, France, Germany and the United States. For the United States he recommended studying the annual reports of the Federal Reserve Board, as well as the Senate Banking and Currency Subcommittee report covering the operation of the national and Federal Reserve banking systems. He also advised him to read the Economist magazine, to “keep abreast of current events” (Letter from the Secretary of the LSE External Department to NU, dated 12 September 1932 (N.U. Jayawardena Personal Files). This NU was to do inhis later years, also ordering the Economist Diary annually.

For a full-time internal student, the requirements for a London M.Sc. were daunting enough. Textbooks were rare at the time, and LSE students – according to one of them – had to study “an enormous number of primary sources, books and articles” (B.K. Nehru, quoted in Dahrendorf, 1995, p.190). Works also had to be read in their original languages. For an external student separated by distance, with no direct access to specialist libraries and tutors, one can only imagine how much more daunting the challenge would have been.

It is interesting to speculate that NU, who seized every opportunity and tenaciously pursued his goals, may have begun to acquaint himself with some of these recommended works, even after he was unable to take up his M.Sc. (Econ.) studies. In this context, one can better appreciate why NU often said with much pride throughout his life, “if to be educated means to be taught, then I am an uneducated man.”

Temporary Disappointments

With his degree in Economics, NU had applied for posts in which he could put his newly acquired knowledge into use. A letter of recommendation written in January 1932 by the Director of Public Works, H.B. Lees, sums up NU’s qualities at this point in time:

Mr. Jayawardena is a very promising officer and has by his own exertions succeeded in obtaining by private study good academic qualifications in Economics… He has carried out his duties… with marked efficiency and

conscientiousness… his conduct… has been exemplary. (N.U. Jayawardena personal files)

NU first applied for the post of Probationary Assessor in the Department of Inland Revenue and was interviewed by J. H. Huxham, who a few years later became the Financial Secretary. Unfortunately, NU was not selected. He then applied for the post of Assistant Accountant in the Labour Department. Here again he was not taken, apparently due to his lack of accountancy qualifications. These failures, far from discouraging him, made him more determined to press on. Apparently, during this period he took a correspondence course in Accountancy from Bennett College in Sheffield, England and “served… [his] articles under N. Sabamoorthy, an Indian who had an office in Sea Street” (N.U. Jayawardena, interviewed by”Eriq,” The Island, 25 Feb. 1998).

Constitutional Reforms and New Vistas for NU

The political situation in the country had moved forward with the Donoughmore Reforms, and the first general election was held under universal franchise in 1931. These reforms provided the country with a greater degree of autonomy and training towards self-governance and democracy. Under the Donoughmore Constitution, a “State Council” (as the legislature was known) was set up. It was composed of 50 elected members and 6 members nominated to represent minorities and special interests. There were also three “Officers of State,” the Financial Secretary, the Legal Secretary and the Chief Secretary – all British – and a Governor, with controlling powers. Each State Council member was assigned to one of seven committees, chaired by a Minister.

Several capable and dedicated Sri Lankans were selected as Ministers, including Peri Sunderam, who was the first Minister of Labour, Industries and Commerce. Peri Sunderam recognized NU’s capabilities, and over the next several years, provided him the opportunities

to apply his knowledge and to excel. Like NU, Peri Sunderam had also risen from humble origins. He had his secondary education at Trinity College, Kandy, then graduated from Cambridge University, and also qualified as a barrister in London. After returning to Sri Lanka, he won the Hatton seat, uncontested in the State Council, in the election of 1931. As Minister, he scouted for intelligent persons for his Ministry. Although NU’s application to the Labour Department had been turned down, Peri Sunderam took note of his qualifications and wanted NU at the Registrar General’s Office, which was under his Ministry. NU was transferred there in July 1932.

The Commercial Intelligence Unit

The Ministry of Labour, Industries and Commerce would be the initial training ground for NU during the 1930s and the first few years of the 1940s. The varying capacities in which he served over this period provided him with many opportunities to develop a solid grounding in commercial activities, trade, administrative and banking matters. In his work, he displayed his usual perseverance and industry. Peri Sunderam, who served as Labour Minister from 1931 to 1936, recognized the need to strengthen trade links with India. In 1932 he led the first Ceylon Government Delegation to attend the Annual Sessions of the Chamber of Industries in New Delhi, and took NU and a civil servant with him. This was NU’s first trip abroad. On his return, he reported on the need for a commercial intelligence agency.

During this period, NU served under L.J.B. Turner, who was the Registrar General. Turner was in the process of setting up a Commercial Intelligence Unit within the Ministry. Peri Sunderam suggested that NU be assigned to write up the report. On the basis of the recommendations that NU made in his report, the new unit was set up. NU was full of admiration for Turner, whom he described as “a fine civil servant,” from whom he learnt “the necessity of being terse in language, the importance of accuracy, to never print any statistic without double checking and dating all papers and correspondence” (Roshan Pieris, 1988). Turner, it may be noted, who had been in charge of the Census of 1921 and had analysed the data and authored the Report.

Turner was succeeded by J.C.W. Rock as Registrar General, who acknowledged NU’s contribution to setting up the new department. Rock stated in 1943: “N.U. Jayawardena… and two clerks formed the nucleus from which the present Department has developed and

it was he who assisted me throughout in shaping its design and

growth” (N.U. Jayawardena Personal Files).

NU, who had not only worked on the report on the Commercial Intelligence Unit, but had also advised on its creation and organization, had hoped to be appointed Assistant Director of the new unit. Much to NU’s disappointment, E.C. Paul, a barrister, was appointed instead. NU, determined to move forward, applied for other posts. On 6 September 1933, Rock wrote a letter of recommendation for NU, whom he said “possesses ability above the average and has a well-formed grasp of economic problems,” adding, “I am sorry to be losing him” (N.U. Jayawardena Personal Files).

However, NU remained in the department and, a short time later, at the age of 26 in November 1934, was promoted to the post of Commercial Assistant to J.C.W. Rock. His new duties included finding markets abroad for local products, making trade investigations, dealing with changes in tariffs and trade agreements, and supplying commercial intelligence – in short, to look after the interests of Sri Lankan trade. The Sri Lankan government at this time had two trade commissioners abroad, in London and in Bombay. The Department of Commerce functioned on the lines of the Department of Overseas Trade in the UK (N.U. Jayawardena Personal Files). NU held this post until 1942. In assessing NU’s performance

as his assistant, in 1938, Rock noted that:

[NU] has acquired a very thorough knowledge of the trade and the industries of Ceylon… [and] has a sound knowledge of economics, both in its theoretical and applied aspects, and he has been of the greatest assistance

to me in carrying out the work of this Department… [He] has shown a high degree of industry, initiative and executive ability. His work is of a character requiring considerable research. (J.C.W. Rock, recommendation

dated 30 March 1938)

Shortly before his promotion, NU was to receive an even bigger break – enabling him to gain a comprehensive overview of the existing problems in banking and credit in Sri Lanka. This landmark event was his appointment by Peri Sunderam in April 1934 to the Banking Commission as its Assistant Secretary. The Commission was established to examine the deficiencies in the island’s banking system. His work in the Commission would not only provide NU with insights into the economic realities of Sri Lanka in the 1930s, but also propel his career forward. (N.U. JAYAWARDENA The First Five Decades Chapter 7 can read online on )

(Excerpted from N.U. JAYAWARDENA The first five decades)

By Kumari Jayawardena and Jennifer Moragoda ✍️