Tariff Confrontation and Covert Strategies

The Grand Duchy of Finland joining first not only sounded the death knell of the gold standard, but also left the British people rather embarrassed.

The currency bloc had clearly been proposed by the British first, yet the first small or medium-sized country to join was Australasia's little brother.

This not only showed that the Grand Duchy of Finland and Australasia had an extraordinary relationship; it also indirectly proved that Britain's ties with its little brothers were not as strong as they seemed.

How could the British allow themselves to lose face like that? Almost at the same time, the British Government began contacting those little brothers and putting ample pressure on them.

Under British pressure, the countries that had originally abandoned the gold standard but were moving slowly suddenly sped up their progress.

In the latter half of June 1927, Sweden, Norway, Denmark, Portugal, Argentina, Brazil, Colombia, Paraguay, Bolivia, Thailand, Iran, Egypt, and Greece one after another chose to join the Pound Sterling–Australian Dollar currency bloc, instantly firing the opening shot in the world's abandonment of the gold standard.

So many countries joining the new monetary system naturally allowed the pound sterling and the Australian dollar to maintain relative stability.

Of course, such stability was ultimately only relative. Compared with their firmness under the gold standard, the pound sterling and the Australian dollar had already begun to depreciate sharply.

Calculated according to actual purchasing power, one pound sterling had previously been essentially equivalent to 7.3 grams of gold. Now, its purchasing power had fallen to 5.7 grams of gold, and it was still continuing to depreciate.

Unless something unexpected happened, the pound sterling's actual purchasing power should depreciate by at least half compared with before the abandonment of the gold standard.

After all, compared with trustworthy gold, the value