Winston Churchill Returns Britain To The Gold Standard

Despite his readmission to office in 1917, after a spell commanding an infantry battalion on the Western Front, he failed to re-establish the reputation as a future national statesman he had won before the war.

Dispirited, he chose the issue of the Liberal Party's support for the first government formed by the Labour Party in 1924 to rejoin the Conservatives, after a spell when he had been out of Parliament altogether. The Conservative Prime Minister appointed Churchill Chancellor of the Exchequer, but when he returned the country to the gold standard, it proved financially disastrous, and he further weakened his political position by opposing measures to grant India limited self-government. He resigned office in 1931 and entered what appeared to be a terminal political decline.

During the 1939- 1942 period, Britain depleted much of its gold stock in purchases of munitions and weaponry on a "cash and carry" basis from the US and other nations. This depletion of Britain's reserve signalled to Winston Churchill that returning to a pre-war style gold standard was impractical, instead, John Maynard Keynes, who had argued against such a gold standard, became increasingly influential: his proposals, a more wide ranging version of the "stability pact" style gold standard, would find expression the Bretton Woods Agreement.