The International Gold Standard System before the First World War

THIS chapter treats the international monetary system from 1900 to 1914. A fuller treatment, which covers the entire period 1870–1914, may be found in the eighth volume of the Cambridge Economic History of Europe [67]. During these years most of the world’s trading countries were said to be ‘on the gold standard’. A drift toward gold had begun in 1871, when the new German Empire adopted the gold standard. Yet although the United States made provision for the gold-convertibility of its paper currency in 1879 it adhered firmly to gold only in 1900, with the passage of the Gold Standard Act; even then there were important states, such as China, which from a variety of viewpoints were not members of the system. The result can properly be called a ‘gold standard system’, in so far as the arrangements of the several countries fitted together in a reasonably coherent way, even though no one had consciously designed it, and even though no international agency administered it, assisted it, or brooded about it. Each country did what it liked, taking its own decisions about monetary matters.