Word: chamberlaine
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Dates: during 1930-1939
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...capitalists, he knew, had reached a state of mind in which they preferred francs or pounds to dollars. They would therefore prefer, he reasoned, sterling bonds paying a low rate of interest to dollar bonds with a higher rate. Abruptly Chancellor Chamberlain offered holders of British 5½% "gold dollar" bonds the option to convert them into sterling bonds paying only...
...Chamberlain's proposal it took more than $4.85 in depreciated dollars to buy an English pound. He offered to convert at a rate of $3.85-thus giving a premium of one dollar in every pound to bondholders willing to convert. This premium, Mr. Chamberlain told the House of Commons, would be paid because of His Majesty's Government's "moral obligation" to compensate holders of the bonds injured by the U. S. Congress' cancellation of their "gold clause." Up from a Labor bench popped Sir Stafford Cripps. "This is the first time," he shouted, "that...
Only the National Government's huge following enabled Chancellor Chamberlain to push his measure through the House of Commons. Meanwhile, however, the New York fiscal community began to call Mr. Chamberlain not generous but Machiavellian...
...offer of a $3.85 bond conversion rate when the monetary exchange was above $4.85 was to stop the decline of the dollar and give it an upward fillip. Simultaneously the recent Wall Street boom, partly induced by a falling dollar, collapsed (see p. 45). On the theory that Chancellor Chamberlain's fiscal acumen is very great indeed, he was credited with a deliberate and successful move to start sterling downhill...
...their own money lower. Technically the rise of the dollar and the fall of sterling was supposed to have resulted from the fact that U. S. holders of the 5½% British bonds sold sterling short last week at the current market rate of $4.85, knowing that through Mr. Chamberlain's bond conversion they would be able to cover at $3.85. Short sales of course depressed the pound, buoyed the dollar...