7 - The End of the Gold Standard (Sept. 27, 1931) 1

There are few Englishmen who do not rejoiceat the breaking of our gold fetters. We feelthat we have at last a free hand to do what issensible. The romantic phase is over, and wecan begin to discuss realistically what policyis for the best.

It may seem surprising that a move whichhad been represented as a disastrous catastropheshould have been received with so much en-thusiasm. But the great advantages to British trade and industry of our ceasing artificialefforts to maintain our currency above its realvalue were quickly realised.

The division of inside opinion was largelyon a different point. The difficult question todecide was one of honour. The City of Londonconsidered that it was under an obligation ofhonour to make every possible effort to maintainthe value of money in terms of which it hadaccepted large deposits from foreigners, eventhough the result of this was to place an in-tolerable strain on British industry. At what

1 [On Sept. 21 , 1931, the Gold Standard in Great Britain wassuspended.]