gold standard

1. A monetary standard under which the basic unit of currency is equal in value to and exchangeable for a specified amount of gold.
2. A model of excellence; a paragon: "Several generations of the laser have been widely available in Europe; the FDA approved the one now considered the gold standard" (Daniel Goleman).

A monetary system in which a country's government allows its currency unit to be freely converted into fixed amounts of gold and vice versa. The exchange rate under the gold standard monetary system is determined by the economic difference for an ounce of gold between two currencies. The gold standard was mainly used from 1875 to 1914 and also during the interwar years.

Investopedia Says:
The use of the gold standard would mark the first use of formalized exchange rates in history. However, the system was flawed because countries needed to hold large gold reserves in order to keep up with the volatile nature of supply and demand for currency.

After World War II, a modified version of the gold standard monetary system, the Bretton Woods monetary system, was created as its successor. This successor system was initially successful, but because it also depended heavily on gold reserves, it was abandoned in 1971 when U.S president Nixon "closed the gold window".

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Monetary system that pegs or fixes the value of a nation's currency unit to a fixed amount of gold bullion. Paper currency in such systems is convertible freely into gold. The gold standard was introduced in Great Britain in 1821 and was the basis for the U.S. Monetary system from the 1870s to 1971, when the U.S. Treasury Department announced it would no longer back the U.S. Dollar, for foreign exchange purposes, with its gold reserves. (The Gold Act of 1934 abolished the right of U.S. Citizens to exchange paper currency for gold.) The gold standard insures a fixed rate of exchange in international trade, while limiting the amount of paper currency a central government can issue for domestic spending. Its main drawback is that it hinders the ability of a government to control the supply of money and it makes it very difficult for a country to isolate itself from depressions or inflation in the economies of its major trading partners. A country experiencing a large Balance of Payments deficit may thus find it impossible to properly address the situation without coming off the gold standard. See also Gold Exchange Standard.

For more information on gold standard, visit Britannica.com.

The gold standard is a monetary system in which gold is the standard or in which the unit of value—be it the dollar, the pound, franc, or some other unit in which prices and wages are customarily expressed and debts are usually contracted—consists of the value of a fixed quantity of gold in a free gold market.

U.S. experience with the gold standard began in the 1870s. From 1792 until the Civil War, the United States, with a few lapses during brief periods of suspended specie payments, was on a bimetallic standard. This broke down in the early days of the Civil War, and from 30 December 1861 to 2 January 1879, the country was on a depreciated paper money standard. The currency act of 1873 dropped the silver dollar from the list of legal coinage but continued the free and unlimited coinage of gold and declared the gold dollar to be the unit of value. There was a free market in the United States for gold, and gold could be exported and imported without restriction. Nonetheless, for six more years the United States continued on a de facto greenback standard. In accordance with the provisions of the Resumption Act of 1875, paper dollars became officially redeemable in gold on 2 January 1879.

Under the gold standard as it then operated, the unit of value was the gold dollar, which contained 23.22 grains of pure gold. Under free coinage, therefore, anyone could take pure gold bullion in any quantity to an American mint and have it minted into gold coins, receiving $20.67 (less certain petty charges for assaying and refining) for each ounce.

The Gold Standard Act of 1900 made legally definitive a gold-standard system that had existed de facto since 1879. This act declared that the gold dollar "shall be the standard unit of value, and all forms of money issued or coined by the United States shall be maintained at a parity of value with this standard." That meant that the value of every dollar of paper money and of silver, nickel, and copper coins and of every dollar payable by bank check was equal to the value of a gold dollar—namely, equal to the value of 23.22 grains of pure gold coined into money. Thenceforth global trends would contribute to domestic cycles of inflation and deflation. If the supply of gold thrown on the world's markets relative to the demand increased, gold depreciated and commodity prices increased in the United States and in all other gold-standard countries. If the world's demand for gold increased more rapidly than the supply of gold, gold appreciated and commodity prices in all gold-standard countries declined.

Until the Great Depression there was general agreement among economists that neither deflation nor inflation is desirable and that a stable unit of value is best. Since then, some economists have held that stable prices can be achieved only at the expense of some unemployment and that a mild inflation is preferable to such unemployment. While gold as a monetary standard during the half-century 1879–1933 was far from stable in value, it was more stable than silver, the only competing monetary metal, and its historical record was much better than that of paper money. Furthermore, its principal instability was usually felt during great wars or shortly thereafter, and at such times all other monetary standards were highly unstable.

During the late nineteenth century, the major nations of the world moved toward the more dependable gold coin standard; between 1873 and 1912 some forty nations used it. World War I swept all of them off it whether they were in the war or not. At the Genoa Conference in 1922, the major nations resolved to return to the gold standard as soon as possible (a few had already). Most major nations did so within a few years; more than forty had done so by 1931.

But not many could afford a gold coin standard. Instead, they used the gold bullion standard (the smallest "coin" was a gold ingot worth about eight thousand dollars) or the even more economical gold exchange standard, first invented in the 1870s for use in colonial dependencies. In the latter case the country would not re-deem in its own gold coin or bullion but only in drafts on the central bank of some country on the gold coin or gold bullion standard with which its treasury "banked." As operated in the 1920s, this parasitic gold standard, preferentially dependent on the central banks of Great Britain, France, and the United States, allowed credit expansion on the same reserves by two countries.

It was a hazardous system, for if the principal nation's central bank was in trouble, so were all the depositor nations. In 1931 the gold standards of Austria, Germany, and Great Britain successively collapsed, the last dragging down several nations on the gold exchange standard with it. This was the beginning of the end of the gold standard in modern times. Many of the British, notably economist J. M. Keynes, alleged that both the decline in Great Britain's foreign trade and its labor difficulties in the late 1920s had been caused by the inflexibility of the gold standard, although it had served the nation well for the previous two centuries. Others argued that Britain's problems were traceable to its refusal to devalue the depreciated pound after the war or to obsolescence in major industries. In any event, Britain showed no strong desire to return to the gold standard.

Meanwhile, in the United States the gold coin standard continued in full operation from 1879 until March 1933 except for a brief departure during the World War I embargo on gold exports. At first the panic of 1929, which ushered in the long and severe depression of the 1930s, seemed not to threaten the gold standard. Britain's departure from the gold standard in 1931 shocked Americans, and in the 1932 presidential campaign, the Democratic candidate, Franklin D. Roosevelt, was known to be influenced by those who wanted the United States to follow Britain's example. A growing number of bank failures in late 1932 severely shook public confidence in the economy, but it was not until February 1933 that a frightened public began to hoard gold. On 6 March 1933, soon after he took office, President Roosevelt declared a nationwide bank moratorium for four days to stop heavy withdrawals and forbade banks to pay out gold or to export it. On 5 April the president ordered all gold coins and gold certificates in hoards of more than a hundred dollars turned in for other money. The government took in $300 million of gold coin and $470 million of gold certificates by 10 May.

Suspension of specie payments was still regarded as temporary; dollar exchange was only a trifle below par. But the president had been listening to the advice of inflationists, and it is likely that the antihoarding order was part of a carefully laid plan. Suddenly, on 20 April, he imposed a permanent embargo on gold exports, justifying the step with the specious argument that there was not enough gold to pay all the holders of currency and of public and private debts in the gold these obligations promised. There never had been, nor was there expected to be. Dollar exchange rates fell sharply. By the Thomas Amendment to the Agricultural Adjustment Act of 12 May 1933, Congress gave Roosevelt power to reduce the gold content of the dollar as much as 50 percent. A joint resolution of Congress on 5 June abrogated the gold clauses to be found in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In four cases the Supreme Court later upheld this abrogation.

During the autumn of 1933, the Treasury bid up the price of gold under the Gold Purchase Plan and finally set it at $35 an ounce under the Gold Reserve Act of 30 January 1934. Most of the resulting profit was subsequently used as a stabilization fund and for the retirement of national bank notes. The United States was now back on a gold standard (the free gold market was in London). But the standard was of a completely new kind, and it came to be called a "qualified gold-bullion standard." It was at best a weak gold standard, having only external, not internal, convertibility. Foreign central banks and treasuries might demand and acquire gold coin or bullion when the exchange rate was at the gold export point, but no person might obtain gold for his money, coin, or bank deposits. After France left gold as a standard in 1936, the qualified gold-bullion standard was the only gold standard left in a world of managed currencies.

Although better than none at all, the new standard was not very satisfactory. The thirty-five-dollar-an-ounce price greatly overvalued gold, stimulating gold mining all over the world and causing gold to pour into the United States. The "golden avalanche" aroused considerable criticism and created many problems. It gave banks excess reserves and placed their lending policies beyond the control of the Federal Reserve System. At the same time citizens were not permitted to draw out gold to show their distrust of the new system or for any other reason. As for its stated intent to raise the price of gold and end the Depression, the arrangement did neither. Wholesale prices rose only 13 percent between 1933 and 1937, and it took the inflation of World War II to push them up to the hoped-for 69 percent. Except for a brief recovery in 1937, the Depression lasted throughout the decade of the 1930s.

The appearance of Keynes's General Theory of Employment, Interest and Money in 1936 and his influence on the policies of the Roosevelt administration caused a revolution in economic thinking. The new economics deplored oversaving and the evils of deflation and made controlling the business cycle to achieve full employment the major goal of public policy. It advocated a more managed economy. In contrast, the classical economists had stressed capital accumulation as a key to prosperity, deplored the evils of inflation, and relied on the forces of competition to provide a self-adjusting, relatively unmanaged economy. The need to do something about the Great Depression, World War II, the Korean War, and the Cold War all served to strengthen the hands of those who wanted a strong central government and disliked the trammels of a domestically convertible gold-coin standard. The rising generation of economists and politicians held such a view. After 1940 the Republican platform ceased to advocate a return to domestic convertibility in gold. Labor leaders, formerly defenders of a stable dollar when wages clearly lagged behind prices, began to feel that a little inflation helped them. Some economists and politicians frankly urged an annual depreciation of the dollar by 2, 3, or 5 percent, allegedly to prevent depressions and to promote economic growth; at a depreciation rate of 5 percent a year, the dollar would lose half its buying power in thirteen years (as in 1939–1952), and at a rate of 2 percent a year, in thirty-four years. Such attitudes reflected a shift in economic priorities because capital seemed more plentiful than before and thus required less encouragement and protection.

There remained, however, a substantial segment of society that feared creeping inflation and advocated a return to the domestically convertible gold-coin standard. Scarcely a year passed without the introduction in Congress of at least one such gold-standard bill. These bills rarely emerged from committee, although in 1954 the Senate held extensive hearings on the Bridges-Reece bill, which was killed by administration opposition.

After World War II a new international institution complemented the gold standard of the United States. The International Monetary Fund (IMF)—agreed to at a United Nations monetary and financial conference held at Bretton Woods, New Hampshire, from 1 July to 22 July 1944 by delegates from forty-four nations—went into effect in 1947. Each member nation was assigned a quota of gold and of its own currency to pay to the IMF and might, over a period of years, borrow up to double its quota from the IMF. The purpose of the IMF was to provide stability among national currencies, all valued in gold, and at the same time to give devastated or debt-ridden nations the credit to reorganize their economies. Depending on the policy a nation adopted, losing reserves could produce either a chronic inflation or deflation, unemployment, and stagnation. Admittedly, under the IMF a nation might devalue its currency more easily than before. But a greater hazard lay in the fact that many nations kept part of their central bank reserves in dollars, which, being redeemable in gold, were regarded as being as good as gold.

For about a decade dollars were much sought after. But as almost annual U.S. deficits produced a growing supply of dollars and increasing short-term liabilities in foreign banks, general concern mounted. Some of these dollars were the reserve base on which foreign nations expanded their own credit. The world had again, but on a grander scale, the equivalent of the parasitic gold-exchange standard it had had in the 1920s. Foreign central bankers repeatedly told U.S. Treasury officials that the dollar's being a reserve currency imposed a heavy responsibility on the United States; they complained that by running deficits and increasing its money supply, the United States was enlarging its reserves and, in effect, "exporting" U.S. inflation. But Asian wars, foreign aid, welfare, and space programs produced deficits and rising prices year after year. At the same time, American industries invested heavily in Common Market nations to get behind their tariff walls and, in doing so, transmitted more dollars to those nations.

Possessing more dollars than they wanted and preferring gold, some nations—France in particular—demanded gold for dollars. American gold reserves fell from $23 billion in December 1947 to $18 billion in 1960, and anxiety grew. When gold buying on the London gold market pushed the price of gold to forty dollars an ounce in October 1960, the leading central banks took steps to allay the anxiety, quietly feeding enough of their own gold into the London market to lower the price to the normal thirty-five dollars and keep it there. When Germany and the Netherlands upvalued their currencies on 4 and 6 March 1961, respectively, their actions had somewhat the same relaxing effect for the United States as a devaluation of the dollar would have had. On 20 July 1962 President John Kennedy forbade Americans even to own gold coins abroad after 1 January 1963. But federal deficits continued, short-term liabilities abroad reaching $28.8 billion by 31 December 1964, and gold reserves were falling to $15.5 billion.

Repeatedly the Treasury took steps to discourage foreign creditors from exercising their right to demand gold for dollars. The banks felt it wise to cooperate with the Americans in saving the dollar, everyone's reserve currency. By late 1967, American gold reserves were less than $12 billion. In October 1969 Germany upvalued the mark again, and American gold reserves were officially reported at $10.4 billion. The patience of foreign creditors was wearing thin. During the first half of 1971, U.S. short-term liabilities abroad shot up from $41 billion to $53 billion, and the demand for gold rose. On 15 August 1971 President Richard M. Nixon announced that the U.S. Treasury would no longer redeem dollars in gold for any foreign treasury or central bank. This action took the nation off the gold standard beyond any lingering doubt and shattered the dollar as a reliable reserve currency. At a gathering of financial leaders of ten industrial nations at the Smithsonian Institution in Washington, D.C., on 17 to 18 December 1971, the dollar was devalued by 7.89 percent in the conversion of foreign currencies to dollars, with some exceptions. In 1972 gold hit seventy dollars an ounce on London's free market for gold, and the United States had its worst mercantile trade deficit in history.

In early 1973 another run on the dollar began. The Treasury announced a 10 percent devaluation of the dollar on 12 February, calling it "a means toward easing the world crisis" and alleging that trade concessions to the United States and greater freedom of capital movements would follow. The new official price of gold was set at $42.22, but on the London market gold soon reached $95 and went to $128.50 in Paris in mid-May. A third devaluation seemed possible but was avoided, at least outwardly. The nine Common Market nations all "floated" their currencies, and Germany and Japan announced they would no longer support the dollar. By midsummer the dollar had drifted another 9 percent downward in value. The U.S. Treasury refused to discuss any plans for a return to gold convertibility. Nevertheless the United States and all other nations held on to their gold reserves. Several European nations, notably France and Germany, were willing to return to a gold basis.

In the 1970s opponents of the gold standard insisted that the monetary gold in the world was insufficient to serve both as a reserve and as a basis for settling large balances between nations, given the rapid expansion of world trade. Supporters of the gold standard distrusted inconvertible paper money because of a strong tendency by governments, when unrestrained by the necessity to redeem paper money in gold on demand, to increase the money supply too fast and thus to cause a rise in price levels. Whereas opponents of the gold standard alleged there was insufficient monetary gold to carry on international trade—they spoke of there being insufficient "liquidity"—supporters stressed that national reserves did not have to be large for this purpose, since nations settled only their net balances in gold and not continually in the same direction.

A period of severe inflation followed the Nixon administration's decision to abandon the gold standard. Nevertheless, despite the economic turmoil of the 1970s, the United States did not return to the gold standard, choosing instead to allow the international currency markets to determine its value. In 1976 the International Monetary Fund established a permanent system of floating exchange rates, a development that made the gold standard obsolete and one that allowed the free market to determine the value of various international currencies. Consequently, as inflation weakened the American dollar, the German Mark and Japanese Yen emerged as major rivals to the dollar in international currency markets.

In the 1990s the American dollar stabilized, and, by the end of the decade, it had regained a commanding position in international currency markets. The robust global economic growth of the 1980s and 1990s appeared to vindicate further the decision to vacate the gold standard. In 2002 the European Union introduced into circulation the Euro, a single currency that replaced the national currencies of nearly a dozen European nations, including major economic powers such as Germany, France, and Italy. The Euro quickly emerged as a highly popular currency in international bond markets, second only to the dollar. Although the long-term direction of international currency markets remains unclear, it seems certain that neither the United States nor Europe will ever return to the gold standard.

Bibliography

Chandler, Lester Vernon. American Monetary Policy, 1928–1941. New York: Harper & Row, 1971.

De Cecco, Marcello. The International Gold Standard: Money and Empire. New York: St. Martin's Press, 1984.

Eichengreen, Barry J. Golden Fetters: The Gold Standard and the Great Depression, 1919–1939. New York: Oxford University Press, 1992.

Gallarotti, Giulio M. The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1880–1914. New York: Oxford University Press, 1995.

Kemmerer, Edwin Walter. Gold and the Gold Standard: The Story of Gold Money, Past, Present and Future. New York: McGraw-Hill, 1944.

Mehrling, Perry G. The Money Interest and the Public Interest: American Monetary Thought, 1920–1970. Cambridge, Mass.: Harvard University Press, 1997.

Ritter, Gretchen. Goldbugs and Greenbacks: The Antimonopoly-Tradition and the Politics of Finance, 1865–1896. New York: Cambridge University Press, 1997.

Schwartz, Anna, and Michael D. Bordo, eds. A Retrospective on the Classical Gold Standard, 1821–1931. National Bureau of Economic Research. Chicago: University of Chicago Press, 1984.

A gold standard is a monetary system in which a country backs its currency with gold reserves and allows the conversion of its currency into gold. Tsarist Russia introduced the gold standard in January 1897 and maintained it until 1914. The policy was adopted both as a means of attracting foreign capital for the ambitious industrialization efforts of the late tsarist era, and to earn international respectability for the regime at a time when the world's leading economies had themselves adopted gold standards. Preparation for this move began under Russian Finance Minister Ivan Vyshnegradsky (1887 - 1892), who actively built up Russia's gold supply while restricting the supply of paper money. After a brief setback, the next finance minister, Sergei Witte (1892 - 1903), continued to amass gold reserves and restrict monetary growth through foreign borrowing and taxation. By 1896, Russian gold reserves had reached levels commensurate (in relative terms) with other major European nations on the gold standard. The gold standard proved so controversial in Russia that it had to be introduced directly by imperial decree, over the objections of the State Council (Duma). This decree was promulgated on January 2, 1897, authorizing the emission of new five-and tenruble gold coins. At this point the state bank (Gosbank) became the official bank of issue, and Russia pegged the new ruble to a fixed quantity of gold with full convertibility. This meant that the ruble could be exchanged at a stable, fixed rate with the other major gold-backed currencies of the time, which facilitated trade by eliminating foreign exchange risk.

Private foreign capital inflows increased considerably after the introduction of the gold standard, and currency stability increased as well. By World War I, Russia had been transformed from a state set somewhat apart from the international financial system to the world's largest international debtor. Proponents argue that the gold standard accelerated Russian industrialization and integration with the world economy by preventing inflation and attracting private capital (substituting for the low rate of domestic savings). They also point out that the Russian economy might not have recovered so quickly after the Russo-Japanese war and civil unrest in 1904 and 1905 without the promise of stability engendered by the gold standard. Critics, however, charge that the gold standard required excessively high foreign borrowing and tax, tariff, and interest rates to introduce. They further charge that once in place, the gold standard was deflationary, inflexible, and too preferential to foreign investment. Economist Paul Gregory argues that the entire debate may be moot, inasmuch as Russia had no choice but to adopt the gold standard in an international environment that practically required it for countries wishing to take advantage of the era's large-scale cross-border trade and investment opportunities. Russia abandoned the gold standard in 1914 under the financial pressure of World War I.

Bibliography

Drummond, Ian. (1976). "The Russian Gold Standard, 1897 - 1914." Journal of Economic History 36(4): 633 - 688.

Gerschenkron, Alexander. (1962). Economic Backwardness in Historical Perspective: A Book of Essays. Cambridge, MA: Belknap Press of Harvard University Press.

Gregory, Paul. (1994). Before Command: An Economic History of Russia from Emancipation to the First Five-Year Plan. Princeton, NJ: Princeton University Press.

Von Laue, Theodore. (1963). Sergei Witte and the Industrialization of Russia. New York: Columbia University Press.

—JULIET JOHNSON

A system in which a nation's currency has a value measured in gold and can be exchanged for gold. Most nations, including the United States, went off the gold standard in the 1930s.

For other uses, see Gold standard (disambiguation).

Under a gold standard, paper notes are convertible into pre-set, fixed quantities of gold.

The gold standard is a monetary system in which a region's common medium of exchange are paper notes that are normally freely convertible into pre-set, fixed quantities of gold. The gold standard is not currently used by any government, having been replaced completely by fiat currency.^{[citation needed]}

Gold certificates were used as paper currency in the United States from 1882 to 1933, these certificates were freely convertible into gold coins.

Contents 1 History 1.1 Dates of adoption of a gold standard 1.2 Suspension of the gold standard 1.3 Gold standard from peak to crisis (1901–1932) 1.3.1 Suspending gold payments to fund the war 1.4 Depression and World War II 1.4.1 British hesitate to return to gold standard 1.5 Post-war international gold standard (1946–1971) 2 Theory 2.1 Differing definitions of gold standard 3 Advantages 4 Disadvantages 5 Advocates of a renewed gold standard 6 Gold as a reserve today 7 See also 8 References 9 Further reading 10 External links

History

This article may not provide balanced geographical coverage on the region in question. Please improve this article or discuss the issue on the talk page.

The use of paper money, convertible into gold, to replace gold coins, originated in China in the 9th century AD.^{[citation needed]} Gold standards replaced the use of gold coins as currency in the 17th-19th centuries in Europe.

In the 1790s Britain suffered a massive shortage of silver coinage and ceased to mint larger silver coins. It issued "token" silver coins and overstruck foreign coins. With the end of the Napoleonic Wars, Britain began a massive recoinage program that created standard gold sovereigns and circulating crowns, half-crowns, and eventually copper farthings in 1821. In 1833, Bank of England notes were made legal tender, and redemption by other banks was discouraged. In 1844 the Bank Charter Act established that Bank of England notes, fully backed by gold, were the legal standard. According to the strict interpretation of the gold standard, this 1844 Act marks the establishment of a full gold standard for British money.^{[citation needed]}

Dates of adoption of a gold standard

• 1717: United Kingdom at 1 guinea to 129.438 grains (8.38 g) of 22 carat crown gold .^[1][2]
• 1816: United Kingdom at one sovereign to 123.27447 grains of 22 carat crown gold.
• 1818: Netherlands at 1 guilder to 0.60561 g gold.^{[citation needed]}
• 1834: United States de facto at 20.67 dollars to 1 troy oz (31.1 g) gold^[3]
• 1854: Portugal at 1000 réis to 1.62585 g gold.^{[citation needed]}
• 1871: Germany at 2790 Goldmarks to 1 kg gold.^{[citation needed]}
• 1871: Japan at 1 yen to 1.5 g gold.^{[citation needed]}
• 1873: United States (See Coinage Act of 1873)
• 1873: Latin Monetary Union (Belgium, Italy, Switzerland, France) at 31 francs to 9.0 g gold
• 1875: Scandinavian monetary union: (Denmark, Norway and Sweden) at 2480 kroner to 1 kg gold.^{[citation needed]}
• 1876: France internally.^{[citation needed]}
• 1876: Spain at 31 pesetas to 9.0 g gold.^{[citation needed]}
• 1878: Finland at 31 marks to 9.0 g gold.^{[citation needed]}
• 1879: Austria (see Austrian florin and Austrian crown).^{[citation needed]}
• 1881: Argentina at 1 peso to 1.4516 g gold.^{[citation needed]}
• 1893: Russia at 31 roubles to 24.0 g gold.^{[citation needed]}
• 1897: Japan at 1 yen devalued to 0.75 g gold.^{[citation needed]}
• 1898: India (see Indian rupee).^{[citation needed]}
• 1900: United States de jure (see Gold Standard Act).

Throughout the 1870s deflationary and depressionary economics created periodic demands for silver currency. However, attempts to introduce such currency generally failed, and continued the general pressure towards a gold standard. By 1879, only gold coins were accepted through the Latin Monetary Union, composed of France, Italy, Belgium, Switzerland and later Greece, even though silver was, in theory, a circulating medium.^{[citation needed]}

Suspension of the gold standard

Governments faced with the need to fund high levels of expenditure, but with limited sources of tax revenue, suspended convertibility of currency into gold on a number of occasions in the 19th century. The British government suspended convertibility during the Napoleonic wars and the US government during the US Civil War. In both cases, convertibility was resumed after the war.

Gold standard from peak to crisis (1901–1932)

Suspending gold payments to fund the war

As in previous major wars under its gold standard, the British government suspended the convertibility of Bank of England notes to gold in 1914 to fund military operations during World War I.^[4] By the end of the war Britain was on a series of fiat currency regulations, which monetized Postal Money Orders and Treasury Notes. The government later called these notes banknotes, which are different from US Treasury notes. The United States government took similar measures. After the war, Germany, having lost much of its gold in reparations, could no longer coin gold "Reichsmarks" and moved to paper currency, although the Weimar Republic later introduced the "rentenmark" and later the gold-backed reichsmark in an effort to control hyperinflation.

As had happened after previous major wars, the UK was returned to the gold standard in 1925, by Winston Churchill. Although a higher gold price and significant inflation had followed the wartime suspension, Churchill followed tradition by resuming conversion payments at the pre-war gold price. For five years prior to 1925 the gold price was managed downward to the pre-war level, causing deflation throughout those countries of the British Empire and Commonwealth using the Pound Sterling. But the rise in demand for gold for conversion payments that followed the similar European resumptions from 1925 to 1928 meant a further rise in demand for gold relative to goods and therefore the need for a lower price of goods because of the fixed rate of conversion from money to goods. In order to attract gold, Britain needed to increase the value of investing in its domestic assets. They needed to increase the demand for the pound. By doing this, Britain attracted gold from the stronger US, which decreased the US money supply as well as depressed Britain’s own economy. Because of these price declines and predictable depressionary effects, the British government finally abandoned the standard September 21, 1931. Sweden abandoned the gold standard in October 1931; and other European nations soon followed. Even the U.S. government, which possessed most of the world's gold ($175 million flowed into the U.S. in 1929, and $280 million in 1930)^[5] moved to cushion the effects of the Great Depression by raising the official price of gold (from about $20 to $35 per ounce) and thereby substantially raising the equilibrium price level in 1933-4.

Depression and World War II

British hesitate to return to gold standard

During the 1939–1942 period, the UK depleted much of its gold stock in purchases of munitions and weaponry on a "cash and carry" basis from the U.S. and other nations.^{[citation needed]} This depletion of the UK's reserve convinced Winston Churchill of the impracticality of returning to a pre-war style gold standard. To put it simply the war had bankrupted Britain. John Maynard Keynes, who had argued against such a gold standard, proposed to put the power to print money in the hands of the privately owned Bank of England. Keynes, in warning about the menaces of inflation, said "By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some".^[6] Quite possibly because of this, the 1944 Bretton Woods Agreement established the International Monetary Fund and an international monetary system based on convertibility of the various national currencies into a U.S. dollar that was in turn convertible into gold. It also prevented countries from manipulating their currency's value to gain an edge in international trade.

Post-war international gold standard (1946–1971)

Main article: Bretton Woods system

After the Second World War, a system similar to a Gold Standard was established by the Bretton Woods Agreements. Under this system, many countries fixed their exchange rates relative to the U.S. dollar. The U.S. promised to fix the price of gold at $35 per ounce. Implicitly, then, all currencies pegged to the dollar also had a fixed value in terms of gold. Under the regime of the French President Charles de Gaulle up to 1970, France reduced its dollar reserves, trading them for gold from the U.S. government, thereby reducing U.S. economic influence abroad. This, along with the fiscal strain of federal expenditures for the Vietnam War, led President Richard Nixon to eliminate the fixed gold price in 1971, causing the system to break down.

Theory

The history of money consists of three phases:^{[citation needed]} commodity money, in which actual valuable objects are bartered; then representative money, in which paper notes (often called 'certificates') are used to represent real commodities stored elsewhere; and finally fiat money, in which paper notes are backed only by use of' "lawful force and legal tender laws" of the government, in particular by its acceptability for payments of debts to the government (usually taxes).

Commodity money is inconvenient to store and transport^{[citation needed]}. It also does not allow the government to control or regulate the flow of commerce within their dominion with the same ease that a standardized currency does. As such, commodity money gave way to representative money, and gold and other specie were retained as its backing.

Gold was a common form of money due to its rarity, durability, divisibility, fungibility, and ease of identification,^[7] often in conjunction with silver. Silver was typically the main circulating medium, with gold as the metal of monetary reserve.

It is difficult to manipulate a gold standard to tailor to an economy’s demand for money, providing practical constraints against the measures that central banks might otherwise use to respond to economic crises.^[8]

The gold standard variously specified how the gold backing would be implemented, including the amount of specie per currency unit. The currency itself is just paper and so has no intrinsic value, but is accepted by traders because it can be redeemed any time for the equivalent specie. A U.S. silver certificate, for example, could be redeemed for an actual piece of silver.

Representative money and the gold standard protect citizens from hyperinflation and other abuses of monetary policy, as were seen in some countries during the Great Depression. However, they were not without their problems and critics, and so were partially abandoned via the international adoption of the Bretton Woods System. That system eventually collapsed in 1971, at which time all nations had switched to full fiat money.

According to later analysis, the earliness with which a country left the gold standard reliably predicted its economic recovery from the great depression. For example, Great Britain and Scandinavia, which left the gold standard in 1931, recovered much earlier than France and Belgium, which remained on gold much longer. Countries such as China, which had a silver standard, almost avoided the depression entirely. The connection between leaving the gold standard as a strong predictor of that country's severity of its depression and the length of time of its recovery has been shown to be consistent for dozens of countries, including developing countries. This partly explains why the experience and length of the depression differed between national economies.^[9]

Differing definitions of gold standard

A 100% reserve gold standard, or a full gold standard, exists when a monetary authority holds sufficient gold to convert all of the representative money it has issued into gold at the promised exchange rate. It is sometimes referred to as the Gold Specie Standard to more easily identify it from other forms of the gold standard that have existed at various times. A 100% reserve standard is generally considered^[who?] difficult to implement as the quantity of gold in the world is too small to sustain current worldwide economic activity at current gold prices. Its implementation would entail a many-fold increase in the price of gold. Furthermore, the "necessary" quantity of money (i.e. one that avoids either inflation or deflation) is not a fixed quantity, but varies continuously with the level of commercial activity.^{[citation needed]}

This is due to the Fractional-reserve banking system. As money is created by the central bank and spent into circulation, the money expands via the money multiplier. Each subsequent loan and redeposit results in an expansion of the monetary base. Therefore, the promised exchange rate would have to be constantly adjusted.

In an international gold-standard system (which is necessarily based on an internal gold standard in the countries concerned)^[10] gold or a currency that is convertible into gold at a fixed price is used as a means of making international payments. Under such a system, when exchange rates rise above or fall below the fixed mint rate by more than the cost of shipping gold from one country to another, large inflows or outflows occur until the rates return to the official level. International gold standards often limit which entities have the right to redeem currency for gold. Under the Bretton Woods system, these were called "SDRs" for Special Drawing Rights.^{[citation needed]}

Advantages

The theory of the gold standard rests on the idea that maximal increases in governmental purchasing power during wartime emergencies require post-war deflations, which would not occur without monetary institutions like the gold standard, which insist upon return to pre-war price-levels and therefore deflationary wartime expectations.^[11]

The gold standard limits the power of governments to inflate prices through excessive issuance of paper currency. It may tend to reduce uncertainty in international trade by providing a fixed pattern of international exchange rates. Under the classical international gold standard, disturbances in price levels in one country would be partly or wholly offset by an automatic balance-of-payment adjustment mechanism called the "price specie flow mechanism."

Disadvantages

Gold prices (US$ per ounce) since 1968, in nominal US$ and inflation adjusted US$.

• The total amount of gold that has ever been mined has been estimated at around 142,000 metric tons.^[12] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $8.3 trillion is in circulation or in deposit (M2).^[13] Therefore, a return to the gold standard, if also combined with a mandated end to fractional reserve banking, would result in a significant increase in the current value of gold, which may limit its use in current applications.^[14] For example, instead of using the ratio of $1,000 per ounce, the ratio can be defined as $2,000 per ounce effectively raising the value of gold to $8 trillion. However, this is specifically a disadvantage of return to the gold standard and not the efficacy of the gold standard itself. Some gold standard advocates consider this to be both acceptable and necessary^[15] whilst others who are not opposed to fractional reserve banking argue that only base currency and not deposits would need to be replaced.^{[citation needed]} The amount of such base currency (M0) is only about one tenth as much as the figure (M2) listed above.^[16]
• Many economists believe that economic recessions can be largely mitigated by increasing money supply during economic downturns.^[17] Following a gold standard would mean that the amount of money would be determined by the supply of gold, and hence monetary policy could no longer be used to stabilize the economy in times of economic recession.^[18] Such reason is often employed to partially blame the gold standard for the Great Depression, citing that the Federal Reserve couldn't expand credit enough to offset the deflationary forces at work in the market. Opponents of this viewpoint have argued that gold stocks were available to the Federal Reserve for credit expansion in the early 1930s. Fed operatives simply failed to utilize them. In this case, a causal factor of the Great Depression was not the gold standard but rather a politically usurped monetary system.^[19]
• Monetary policy would essentially be determined by the rate of gold production. Fluctuations in the amount of gold that is mined could cause inflation if there is an increase, or deflation if there is a decrease.^[20][21] Some hold the view that this contributed to the severity and length of the Great Depression.^[14][22]
• Some have contended that the gold standard may be susceptible to speculative attacks when a government's financial position appears weak. For example, some believe the United States was forced to raise its interest rates in the middle of the Great Depression to defend the credibility of its currency.^[22]
• If a country wanted to devalue its currency, it would produce sharper changes, in general, than the smooth declines seen in fiat currencies, depending on the method of devaluation.^[23]

Advocates of a renewed gold standard

The return to the gold standard is supported by many followers of the Austrian School of Economics, Objectivists and libertarians[2] largely because they object to the role of the government in issuing fiat currency through central banks. A significant number of gold standard advocates also call for a mandated end to fractional reserve banking; however, this view is far from universal.

Few lawmakers^[15] today advocate a return to the gold standard, other than adherents of the Austrian school and some supply-siders. However, many prominent economists have expressed sympathy with a hard currency basis, and have argued against fiat money, including former U.S. Federal Reserve Chairman Alan Greenspan (himself a former Objectivist), and macro-economist Robert Barro.^[24] Greenspan famously argued the case for returning to a gold standard in his 1966 paper "Gold and Economic Freedom", in which he described supporters of fiat currencies as "welfare statists" intent on using monetary policies to finance deficit spending. He has argued that the fiat money system of today has retained the favorable properties of the gold standard because central bankers have pursued monetary policy as if a gold standard were still in place.^[25] U.S. Congressman Ron Paul and many others argue for the reinstatement of the gold standard because gold has intrinsic value as representative money due to its physical properties. That is, it is fungible, liquid, divisible, easily recognizable, and rare.

The current global monetary system relies on the U.S. dollar as a reserve currency by which major transactions, such as the price of gold itself, are measured.^{[citation needed]} A host of alternatives have been suggested, including energy-based currencies, market baskets of currencies or commodities, gold being one of the alternatives.

In 2001 Malaysian Prime Minister Mahathir bin Mohamad proposed a new currency that would be used initially for international trade among Muslim nations. The currency he proposed was called the Islamic gold dinar and it was defined as 4.25 grams of pure (24 carat) gold. Mahathir Mohamad promoted the concept on the basis of its economic merits as a stable unit of account and also as a political symbol to create greater unity between Islamic nations. The purported purpose of this move would be to reduce dependence on the United States dollar as a reserve currency, and to establish a non-debt-backed currency in accord with Islamic law against the charging of interest.^[26] However, to date, Mahathir's proposed gold-dinar currency has failed to take off.

Gold as a reserve today

Main article: Official gold reserves

During the 1990s Russia liquidated much of the former USSR's gold reserves, while several other nations accumulated gold in preparation for the Economic and Monetary Union. The Swiss Franc left a full gold-convertible backing. However, gold reserves are held in significant quantity by many nations as a means of defending their currency, and hedging against the U.S. Dollar, which forms the bulk of liquid currency reserves. Weakness in the U.S. Dollar tends to be offset by strengthening of gold prices. Gold remains a principal financial asset of almost all central banks alongside foreign currencies and government bonds. It is also held by central banks as a way of hedging against loans to their own governments as an "internal reserve". Approximately 19% of all above-ground gold is held in reserves by central banks.^{[dubious – discuss]}

Both gold coins and gold bars are widely traded in deeply liquid markets, and therefore still serve as a private store of wealth. Some privately issued currencies, such as digital gold currency, are backed by gold reserves.

In 1999, to protect the value of gold as a reserve, European Central Bankers signed the Washington Agreement on Gold which stated that they would not allow gold leasing for speculative purposes, nor would they "enter the market as sellers" except for sales that had already been agreed upon.

See also

Numismatics portal

• Bank for International Settlements
• Bimetallism
• Federal Reserve System
• Full-reserve banking
• Gold as an investment
• Gold bug
• International Monetary Fund
• Silver standard
• The Great Deflation
• United Nations Monetary and Financial Conference
• World Bank

References

1. ^ Kindleberger, Charles P. (1993). A financial history of western Europe. Oxford: Oxford University Press. pp. 60–63. ISBN 0-19-507738-5. OCLC 26258644. 
2. ^ Newton, Isaac, Treasury Papers, vol. ccviii. 43, Mint Office, 21 Sept. 1717.
3. ^ The Pocket money book: a monetary chronology of the United States. Great Barrington, Massachusetts: American Institute for Economic Research. 2006. pp. 4–6. ISBN 0-913610-46-1. OCLC 75968548. 
4. ^ Snowdon, Brian; Howard R. Vane (2002). "Gold Standard". An Encyclopedia of Macroeconomics. Edward Elgar Publishing. p. 293. ISBN 1840643870. http://books.google.com/books?id=HSVakrh8TToC&pg=PA293. Retrieved 2008-12-15. 
5. ^ Shlaes, Amity, The Forgotten Man: A History of the Great Depression (HarperCollins 2008), p. 90.
6. ^ John Maynard Keynes Economic Consequences of the Peace, 1920.
7. ^ Krech, Shepard; John Robert McNeill and Carolyn Merchant (2004). Encyclopedia of world environmental history. New York City: Routledge. p. 597. ISBN 0-415-93734-5. OCLC 174950341. 
8. ^ Demirgüç-Kunt, Asli; Enrica Detragiache (April 2005). "Cross-Country Empirical Studies of Systemic Bank Distress: A Survey". National Institute Economic Review 192 (1): 68–83. doi:10.1177/002795010519200108. ISSN 0027-9501. OCLC 90233776. http://ner.sagepub.com/cgi/reprint/192/1/68. Retrieved 2008-11-12. 
9. ^ Bernanke, Ben (March 2, 2004), "Remarks by Governor Ben S. Bernanke: Money, Gold and the Great Depression", At the H. Parker Willis Lecture in Economic Policy, Washington and Lee University, Lexington, Virginia.
10. ^ The New Palgrave Dictionary of Economics, 2nd edition (2008), Vol.3, S.695
11. ^ Thompson, Earl A. (1997). "The Gold Standard: Causes and Consequences". in David Glasner. Business cycles and depressions: an encyclopedia. New York: Garland Publishing. pp. 267–272. ISBN 0-8240-0944-4. OCLC 34651539. 
12. ^ Butterman, W. C.; Earle B. Amey III (2005) (PDF). Mineral Commodity Profiles—Gold. Reston, Virginia: United States Geological Survey. OCLC 62034878. http://pubs.usgs.gov/of/2002/of02-303/OFR_02-303.pdf. Retrieved 2008-11-12. ^{[page needed]}
13. ^ "Money Stock and Debt Measures". Federal Reserve Board. 2008-03-13. http://www.federalreserve.gov/releases/h6/current/default.htm. Retrieved 2008-03-16. 
14. ^ ^{a b} Warburton, Clark (1966). "The Monetary Disequilibrium Hypothesis". Depression, Inflation, and Monetary Policy: Selected Papers, 1945-1953. Baltimore: Johns Hopkins University Press. pp. 25–35. OCLC 736401. 
15. ^ ^{a b} Paul, Ron; Lewis Lehrman (1982) (PDF). The case for gold: a minority report of the U. S. Gold Commission. Washington, D.C.: Cato Institute. p. 160. ISBN 0-932790-31-3. OCLC 8763972. http://www.mises.org/books/caseforgold.pdf. Retrieved 2008-11-12. 
16. ^ Data from http://www.federalreserve.gov/releases/h6/hist/ as interpreted in File:Components of the United States money supply2.svg
17. ^ Mankiw, N. Gregory (2002). Macroeconomics (5th ed.). Worth. pp. 238–255. 
18. ^ Krugman, Paul. "The Gold Bug Variations". Slate.com. http://www.slate.com/id/1912/. Retrieved 2009-02-13. 
19. ^ Timberlake, Richard H. 2005. "Gold Standards and the Real Bills Doctrine in US Monetary Policy". Econ Journal Watch 2(2): 196-233. [1]
20. ^ DeLong, Brad (1996-08-10). "Why Not the Gold Standard?". Berkeley, California: University of California, Berkeley. http://www.j-bradford-delong.net/Politics/whynotthegoldstandard.html. Retrieved 2008-09-25. 
21. ^ Bordo, Michael D. (2008). "Gold Standard". in David R. Henderson. Concise Encyclopedia of Economics. Indianapolis: Liberty Fund. ISBN 0-86597-666-X. OCLC 123350134. http://www.econlib.org/library/Enc/GoldStandard.html. Retrieved 2008-11-12. 
22. ^ ^{a b} Hamilton, James D. (2005-12-12). "The gold standard and the Great Depression". Econbrowser. http://www.econbrowser.com/archives/2005/12/the_gold_standa.html. Retrieved 2008-11-12.  See also Hamilton, James D. (April 1988). "Role of the International Gold Standard in Propagating the Great Depression". Contemporary Economic Policy 6 (2): 67–89. doi:10.1111/j.1465-7287.1988.tb00286.x (inactive 2008-11-12). http://www3.interscience.wiley.com/journal/120017201/abstract. Retrieved 2008-11-12. 
23. ^ McArdle, Megan (2007-09-04). "There's gold in them thar standards!". The Atlantic Monthly. http://meganmcardle.theatlantic.com/archives/2007/09/theres_gold_in_them_thar_stand.php. Retrieved 2008-11-12. 
24. ^ Salerno, Joseph T. (1982-09-09). "The Gold Standard: An Analysis of Some Recent Proposals". Cato Policy Analysis. Cato Institute. http://www.cato.org/pubs/pas/pa016.html. Retrieved 2009-03-23. 
25. ^ Greenspan, Alan (July 1966). "Gold and Economic Freedom". The Objectivist 5 (7). http://www.constitution.org/mon/greenspan_gold.htm. Retrieved 2008-10-16. 
26. ^ al-'Amraawi, Muhammad; Al-Khammar al-Baqqaali, Ahmad Saabir, Al-Hussayn ibn Haashim, Abu Sayf Kharkhaash, Mubarak Sa'doun al-Mutawwa', Malik Abu Hamza Sezgin, Abdassamad Clarke and Asadullah Yate (2001-07-01). "Declaration of 'Ulama on the Gold Dinar". Islam i Dag. http://www.islamidag.dk/ulamaongold.html. Retrieved 2008-11-14. 

Further reading

• Bensel, Richard Franklin (2000). The political economy of American industrialization, 1877-1900. Cambridge: Cambridge University Press. ISBN 0-521-77604-X. OCLC 43552761. 
• Eichengreen, Barry J.; Marc Flandreau (1997). The gold standard in theory and history. New York City: Routledge. ISBN 0-415-15061-2. OCLC 37743323. 
• Bordo, Michael D. (1999). Gold standard and related regimes: collected essays. Cambridge: Cambridge University Press. ISBN 0-521-55006-8. OCLC 59422152. 
• Bordo, Michael D; Anna Jacobson Schwartz and National Bureau of Economic Research (1984). A Retrospective on the classical gold standard, 1821-1931. Chicago: University of Chicago Press. ISBN 0-226-06590-1. OCLC 10559587. 
• Officer, Lawrence H. (2007). Between the Dollar-Sterling Gold Points: Exchange Rates, Parity and Market Behavior. Chicago: Cambridge University Press. ISBN 0-521-03821-9. OCLC 124025586. 
• Eichengreen, Barry J. (1995). Golden Fetters: The Gold Standard and the Great Depression, 1919-1939. New York City: Oxford University Press. ISBN 0-19-510113-8. OCLC 34383450. 
• Einaudi, Luca (2001). Money and politics: European monetary unification and the international gold standard (1865-1873). Oxford: Oxford University Press. ISBN 0-19-924366-2. OCLC 45556225. 
• Roberts, Mark A (March 1995). "Keynes, the Liquidity Trap and the Gold Standard: A Possible Application of the Rational Expectations Hypothesis". The Manchester School of Economic & Social Studies (Blackwell Publishing) 61 (1): 82–92. doi:10.1111/j.1467-9957.1995.tb00270.x. 
• Thompson, Earl A.; Charles Robert Hickson (2001). Ideology and the evolution of vital institutions: guilds, the gold standard, and modern international cooperation. Boston: Kluwer Acad. Publ.. ISBN 0-792-37390-1. OCLC 46836861. 
• Pollard, Sidney (1970). The gold standard and employment policies between the Wars. London: Methuen. ISBN 0-416-14250-8. OCLC 137456. 
• Hanna, Hugh Henry; Charles Arthur Conant, Jeremiah Jenks (1903). Stability of international exchange: Report on the introduction of the gold-exchange standard into China and other silver-using countries. OCLC 6671835. 
• Elks, Ken. "The complete history of British Coinage in 12 parts". Predecimal.com. Chris Perkins. http://www.predecimal.com/p1celtic.php. Retrieved 2008-11-13. 
• Banking in modern Japan. Tokyo: Fuji Bank. 1967. OCLC 254964565. 
• Officer, Lawrence H. (2008). "bimetallism". in Steven N. Durlauf and Lawrence E. Blume. The New Palgrave Dictionary of Economics, 2nd Edition. Basingstoke: Palgrave Macmillan. doi:10.1057/9780230226203.0136. ISBN 0-333-78676-9. OCLC 181424188. http://www.dictionaryofeconomics.com/article?id=pde2008_B000137&goto=bimetalism&result_number=140. Retrieved 2008-11-13. 
• Drummond, Ian M.; The Economic History Society (1987). The gold standard and the international monetary system 1900-1939. Houndmills, Basingstoke, Hampshire: Macmillan Education. ISBN 0-333-37208-5. OCLC 18324084. 
• Hawtrey, Ralph George (1927). The Gold Standard in theory and practice. London: Longman. OCLC 250855462. 
• Flandreau, Marc (2004). The glitter of gold: France, bimetallism, and the emergence of the international gold standard, 1848-1873. Oxford: Oxford University Press. ISBN 0-19-925786-8. OCLC 54826941. 
• Lalor, John (2003) [1881]. Cyclopedia of Political Science, Political Economy and the Political History of the United States. London: Thoemmes Continuum. ISBN 1-84371-093-5. OCLC 52565505. 
• Bernanke, Ben; Harold James (October 1990). The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison. Working Paper Series. 3488. Cambridge, Massachusetts: National Bureau of Economic Research. OCLC 22840844. http://www.nber.org/papers/w3488. Retrieved 2008-11-13.  Also published as: Bernanke, Ben; Harold James (1991). "The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison". in R. Glenn Hubbard. Financial markets and financial crises. Chicago: University of Chicago Press. pp. 33–68. ISBN 0-226-35588-8. OCLC 231281602. 
• Rothbard, Murray Newton (2006). "The World Currency Crisis". Making Economic Sense. Burlingame, California: Ludwig von Mises Institute. pp. 295–299. ISBN 0-945466-46-3. OCLC 78624652. 
• Cassel, Gustav (1936). The downfall of the gold standard. Oxford: Clarendon Press. OCLC 237252. 
• Braga de Macedo, Jorge; Barry J. Eichengreen and Jaime Reis (1996). Currency convertibility: the gold standard and beyond. New York City: Routledge. ISBN 0-415-14057-9. OCLC 33132906. 
• Russell, William H. (1982). The Deceit of the Gold Standard and of Gold Monetization. American Classical College Press. ISBN 0-892-66324-3. 
• Mitchell, Wesley C. (1908). Gold, prices, and wages under the greenback standard. Berkeley, California: The University Press. OCLC 1088693. 
• Mouré, Kenneth (2002). The gold standard illusion: France, the Bank of France, and the International Gold Standard, 1914-1939. Oxford: Oxford University Press. ISBN 0-19-924904-0. OCLC 48544538. 
• Bayoumi, Tamim A.; Barry J. Eichengreen and Mark P. Taylor (1996). Modern perspectives on the gold standard. Cambridge: Cambridge University Press. ISBN 0-521-57169-3. OCLC 34245103. 
• Keynes, John Maynard (1925). The economic consequences of Mr. Churchill. London: Hogarth Press. OCLC 243857880. 
• Keynes, John Maynard (1930). A treatise on money in two volumes. London: MacMillan. OCLC 152413612. 
• Ferderer, J. Peter (1994). Credibility of the interwar gold standard, uncertainty, and the Great Depression. Annandale-on-Hudson, New York: Jerome Levy Economics Institute. OCLC 31141890. 
• Aceña, Pablo Martín; Jaime Reis (2000). Monetary standards in the periphery: paper, silver and gold, 1854-1933. London: Macmillan Press. ISBN 0-333-67020-5. OCLC 247963508. 
• Gallarotti, Giulio M. (1995). The anatomy of an international monetary regime: the classical gold standard, 1880-1914. Oxford: Oxford University Press. ISBN 0-19-508990-1. OCLC 30511110. 
• Dick, Trevor J. O.; John E. Floyd (2004). Canada and the Gold Standard: Balance of Payments Adjustment Under Fixed Exchange Rates, 1871-1913. Cambridge: Cambridge University Press. ISBN 0-5216-1706-5. OCLC 59135525. 
• Kenwood, A.G.; A. L. Lougheed (1992). The growth of the international economy 1820–1990. London: Routledge. ISBN 91-44-00079-0. 
• Hofstadter, Richard (1996). "Free Silver and the Mind of "Coin" Harvey". The Paranoid Style in American Politics and Other Essays. Harvard: Harvard University Press. ISBN 0-674-65461-7. OCLC 34772674. 
• Lewis, Nathan K. (2006). Gold: The Once and Future Money. New York: Wiley. ISBN 0-470-04766-6. OCLC 87151964. 
• Withers, Hartley (1919). War-Time Financial Problems. London: J. Murray. OCLC 2458983. http://www.gutenberg.org/etext/13045. Retrieved 2008-11-14. 

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