Gold and Coins in the Age of Standardization

2020 ◽  
pp. 63-84
Author(s):  
Einar Lie
Keyword(s):  
Monetary Union ◽  
Gold Standard ◽  
National Politics ◽  
Monetary System ◽  
Silver Standard ◽  
Monetary Unit ◽  
Heated Debate ◽  
Area Of Influence ◽  
Objective Being ◽  
Metal Basis

This chapter addresses the changeover from a silver standard to a gold standard for the Norwegian monetary system. On 8 May 1873, after a long and heated debate, the Storting decided to establish a new metal basis for the Norwegian monetary system, by transitioning from silver to gold. In the same resolution, the Storting rejected the proposal to join Sweden and Denmark in a monetary union. The gold standard eventually prevailed, thanks to Great Britain’s financial weight and pragmatic arguments regarding gold’s superiority to silver as a basis for metal-based monetary systems. However, the larger dream, partly forgotten because it did not materialize, was the establishment of a universal coin (universal coinage), intended to give all people access to the same monetary unit for cross-border payments. In its first round, this initiative was aborted as a result of international events and national politics. Two years later, as a strictly regional solution, Norway finally joined its two neighbouring countries in the Scandinavian Monetary Union. Along with two other national banks, Norges Bank contributed to the ever-expanding monetary union in its area of influence and improved it with new and efficient ways of settling payments, the main objective being the promotion of trade.

The Macro-Social Meaning of Money

Money Talks ◽  
2017 ◽  
Author(s):  
Eric Helleiner
Keyword(s):  
United States ◽  
Nineteenth Century ◽  
Monetary Union ◽  
Gold Standard ◽  
International Monetary System ◽  
The United States ◽  
Social Meaning ◽  
Monetary System ◽  
Late Nineteenth ◽  
Meaning Of Money

This chapter explores ways in which nationalist values helped to shape the emergence of modern territorial currencies in the United States and elsewhere during the nineteenth century. Turning to international monetary systems, it shows how more cosmopolitan nonpecuniary values helped to inspire a failed initiative to create a world monetary union in the 1850s and 1860s. It also examines the international gold standard of the late nineteenth and early twentieth centuries, offering a critique of what many have seen as Karl Polanyi's well-known argument about the economy's socially disembedded nature. The chapter concludes with a discussion of the creation of the Bretton Woods system in the early 1940s, the gold standard's successor, as a clear example of an international monetary system invested from the start with social meaning.

scholarly journals A Model of the International Monetary System*

2017 ◽  
Vol 133 (1) ◽  
pp. 295-355 ◽  
Author(s):  
Emmanuel Farhi ◽  
Matteo Maggiori
Keyword(s):  
Simple Model ◽  
Gold Standard ◽  
Supply And Demand ◽  
International Monetary System ◽  
Rate System ◽  
Monetary System ◽  
The World ◽  
The Common ◽  
Triffin Dilemma ◽  
World Supply

AbstractWe propose a simple model of the international monetary system. We study the world supply and demand for reserve assets denominated in different currencies under a variety of scenarios: a hegemon versus a multipolar world; abundant versus scarce reserve assets; and a gold exchange standard versus a floating rate system. We rationalize the Triffin dilemma, which posits the fundamental instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world, the Nurkse warning that a multipolar world is more unstable than a hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold standard or at the zero lower bound is recessionary. Our analysis is both positive and normative.

Money metrology

2020 ◽  
pp. 42-50
Author(s):  
V. N. Krutikov ◽  
V. V. Okrepilov
Keyword(s):  
Gold Standard ◽  
Supply And Demand ◽  
Precious Metals ◽  
Legal Metrology ◽  
Important Principle ◽  
Monetary System ◽  
Stage Of Development ◽  
Fixed Weight ◽  
Long Time ◽  
Material Measure

The influence of the provisions of legal metrology on the formation and functioning of the monetary environment in market conditions is studied. It is shown that the use of material (reference) measures for determining the value of goods in monetary units makes it possible to form a stable monetary system, equal for all market participants. This system can reasonably be attributed to information measuring systems. Systems based on the use of constant material measures that determine the value of goods and money in international trade have been formed and functioned for a long time. In the XIX-XX centuries, the monetary system, in which a fixed weight of gold served as the material measure of money, was called the “gold standard”. In the 1970s, this system was abandoned without objective reasons. Nowadays, many people believe that the main reason is the uncontrolled issuance of paper money (US dollars). As a result, the material measure of money was replaced by a monetary measure. The money of a number of selected countries turned out to be a measure of the national currencies of other countries. Then money was made a commodity – an object of market trading, the price of which is determined by supply and demand. Thus, the most important principle of metrology was violated – the invariability (constancy) of the measure of system objects. The resulting monetary system became unstable. This situation has led to an increase in the number of proposals for a return to the gold standard. The analysis carried out in the paper confirmed the relevance of these proposals. At the present stage of development of metrology, it is advisable to explore the possibility of a broader (not only at the expense of precious metals) resource provision of material monetary measures, in particular, to consider the possibility of using materials and (or) goods that are in high demand in the international market as monetary measures.

The Fall

Money ◽  
2017 ◽  
Author(s):  
John Kenneth Galbraith ◽  
James K. Galbraith
Keyword(s):  
United States ◽  
New York ◽  
World War I ◽  
Gold Standard ◽  
Stock Exchange ◽  
The United States ◽  
World War ◽  
Industrial Countries ◽  
Monetary System ◽  
York Stock Exchange

This chapter examines the end of the international gold standard during World War I. The creation of the Federal Reserve System—with its idea of centralized banking carried out by twelve central banks—ended the United States's long struggle to perfect a sensible, conservative monetary system. Everywhere in the industrial countries money of whatever kind was now exchangeable, without pretense or delay, into gold. The chapter considers how the major industrial participants—Germany, France, Britain, Austria—suspended specie payments and went off the gold standard when World War I broke out; the dumping of securities on the New York market in the first nervous days of the war; the shutdown of the New York Stock Exchange; and how the United States eventually abandoned the gold standard. The increase in whole prices in the United States during all the war years is also discussed.

A Bank of Issue Forged in Silver and Tears

2020 ◽  
pp. 10-29
Author(s):  
Einar Lie
Keyword(s):  
Exchange Rate ◽  
Market Value ◽  
Purchasing Power ◽  
Napoleonic Wars ◽  
Not Given ◽  
The Public ◽  
Paper Money ◽  
Monetary System ◽  
Monetary Unit ◽  
Government Financing

This chapter discusses the formation of Norges Bank. Norges Bank was formed in 1816 by resolution of the Storting, Norway’s new parliament. The bank was not given any explicit role in government financing. However, two tasks—providing credit for the public and stability in the monetary system—were fundamental to the bank’s creation and almost every discussion of its operations for the next quarter of a century. Moreover, when chartering Norges Bank in 1816, the Storting resolved that the Norwegian monetary unit—the speciedaler—should be convertible into silver at an exchange rate that was well above the note’s purchasing power and market value at the time. Indeed, one fundamental premise in all of the proposals that proliferated in 1816, influenced by the monetary chaos during the Napoleonic Wars, was that the value of the nation’s new paper money must be backed by silver.

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