https://fee.org/articles/winston-churchill-s-gold-standard-folly/

The late Austrian School economist Percy Greaves explained this flaw in his excellent book, Understanding the Dollar Crisis. Greaves, Murray Rothbard, Henry Hazlitt, and Hans Sennholz were the four best economists I ever personally knew. They were all in agreement on Greaves’ analysis of Churchill’s error:

When England went back on the gold standard in April 1925, with the pound valued at $4.86, she had raised the value of the pound about 10 percent above its average value of about $4.40 on the open market the previous year. This meant that England, which operated largely as a factory, importing raw materials and exporting finished goods, had raised its export prices by roughly 10 percent. For Americans, buying a British product that cost a pound sterling, the price was now $4.86 instead of the earlier $4.40.

This seemingly minor price-fixing mistake cascaded into a series of destructive results. British export industries suffered hugely, especially coal, leading to strikes and slowdowns.

At the pound’s artificial exchange rate Churchill fixed against gold and the dollar, Britain would have lost gold to the US. To help avoid that, America’s Federal Reserve Bank depressed interest rates at home and deliberately weakened America’s currency. In other words, to help Britain pretend its pound was stronger than it was, America’s central bank acted to make the dollar weaker than it was.

We know the rest of the painful story. Much of the currency and credit expansion—and the artificially cheap interest rates and Roaring 1920s boom that set us up for the Great Depression—was prompted by the Churchill blunder and the Fed’s efforts to paper it over. (See Great Myths of the Great Depression for more on this sad saga of failed interventions.)