1920-1939 | India

Chancellor ecstatic as ‘India’s hordes’ forced to sell gold

Neville Chamberlain – c. 1936 – ©NPG x81269

20 February 1932

On 20 February 1932, Neville Chamberlain, the Chancellor of the Exchequer, in a letter to his sister, happily acknowledged that ‘the astonishing gold mine we have discovered in India’s hordes has put us in clover.’ At the time many Indian farmers were being forced to liquidate their entire savings, often held in gold, to cover the losses they were suffering from the low crop prices resulting from a worldwide depression. Meanwhile, Britain was short of gold reserves, which were needed to help bolster the pound’s exchange rate against the dollar. Sterling had fallen significantly in previous months, but thanks to the greatly increased gold inflow from India, had now stabilised. This in turn, Chamberlain maintained, would allow for lower interest rates for British businesses.  Consequently, he gleefully noted, ‘there is great rejoicing in the City and sterling remains steady while stocks are beginning to mount again.1


  1. Robert Self,  Neville Chamberlain: A Biography, Routledge, 2006 and Piers Brendon, The Rise and Fall of the British Empire: 1781-1997, Jonathan Cape, London 2007 p. 385.

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