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On this day in 1931

Despite the fuss about it, the global gold standard only lasted for a century and it collapsed before World War II. Britain had created the standard in its modern form in 1821 and left it in 1931.

Ernest Harvey, the Bank’s deputy governor at the time, wrote to Ramsay MacDonald, the prime minister, and Philip Snowden, the chancellor, on September 19, 1931, saying that reserves worth more than £100m were close to running out.

"‘Gentlemen, His Majesty’s Government have given the most serious consideration to your letter of the 19th instant in which you inform them of the grave difficulties with which you are faced in meeting the obligation placed on the Bank of England by the Gold Standard Act… ‘His Majesty’s Government are of the opinion that the Bank of England should place such restrictions on the supply of gold as the Bank may deem requisite in the national interest.’"

From "How the Bank of England abandoned the gold standard - Telegraph".

 

As Ed Conway points out in his excellent book "The Summmit", which is about the 1994 Bretton Woods agreement and the foundation of the modern monetary system, the run on the reserves was because of the Invergordon Mutiny, which was an industrial action by around a thousand sailors in the British Navy that took place on 15–16 September 1931. For two days navy ships at Invergordon were on strike (one of the few military strikes in British history). This mutiny caused a panic on the London Stock Exchange and a run on the pound, bringing Britain’s economic troubles to a head and finally forcing it off the gold standard for good on 21 September 1931.

The United States left on 5 June 1933.

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