Gold standard

Two golden 20 kr coins from the Scandinavian Monetary Union, which was based on a gold standard. The coin to the left is Swedish and the one on the right is Danish.
Gold certificates were used as paper currency in the United States from 1882 to 1933. These certificates were freely convertible into gold coins.
The British gold sovereign or £1 coin was the preeminent circulating gold coin during the classical gold standard period.
Huge quantities of $20 double eagles were minted as a result of the California gold rush.
The US dollar was said to be on a limping standard due to huge quantities of Morgan silver dollars continuing to circulate at par with gold dollars despite their silver value being less.
William McKinley ran for president on the basis of the gold standard.
Ending the gold standard and economic recovery during the Great Depression.
Gold prices (US dollars per troy ounce) from 1914, in nominal US dollars and inflation adjusted US dollars.

Monetary system in which the standard economic unit of account is based on a fixed quantity of gold.

- Gold standard

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Monetary system

System by which a government provides money in a country's economy.

World administrative levels

(This is known as the gold standard.) The silver standard was widespread after the fall of the Byzantine Empire, and lasted until 1935, when it was abandoned by China and Hong Kong.

Dutch guilder

The currency of the Netherlands from the 15th century until 2002, when it was replaced by the euro.

Vierlander stuiver of Philip the Good
This Burgundian double patard (or 2-stuiver) found in England was current there for four English pence from 1469-1475.
Rijksdaalder of the Dutch Republic, 1622
Silver rider Ducaton of the Dutch Republic
Silver coin: 3 gulden Utrecht, Dutch Republic - 1795
Silver coin: 2½ gulden Willem III - 1871'''
Guilder, 1897 (1st type of obverse). Queen Wilhelmina. Silver.
Zinc coins minted in the 1940s during the German occupation of the Netherlands (obverse)
Zinc coins minted in the 1940s during the German occupation of the Netherlands (reverse)
One guilder, playing card money (1801). Prior to the formal introduction of paper currency, playing card money, denominated in Dutch guilders, was used in Dutch Guiana (1761–1826).
Dutch 2 1⁄2-guilder silver certificate from 1927
U.S.-printed Dutch guilder, 1943

This table summarizes the gulden's value in terms of silver until the gold standard was introduced in 1875.

Silver standard

Monetary system in which the standard economic unit of account is a fixed weight of silver.

The Spanish silver dollar created a global silver standard from the 16th to 19th centuries.

The move away from the silver to the gold standard began in the 18th century when Great Britain set the gold guinea’s price in silver higher than international prices, attracting gold and putting them on a de facto gold standard.

Central bank

Institution that manages the currency and monetary policy of a state or formal monetary union,

The Eccles Federal Reserve Board Building in Washington, D.C. houses the main offices of the Board of Governors of the United States' Federal Reserve System
The European Central Bank building in Frankfurt
Central bank independence versus inflation. This often cited research published by Alesina and Summers (1993) is used to show why it is important for a nation's central bank (i.e.-monetary authority) to have a high level of independence. This chart shows a clear trend towards a lower inflation rate as the independence of the central bank increases. The generally agreed upon reason independence leads to lower inflation is that politicians have a tendency to create too much money if given the opportunity to do it. The Federal Reserve System in the United States is generally regarded as one of the more independent central banks
Sealing of the Bank of England Charter (1694), by Lady Jane Lindsay, 1905.
The Bank of England, established in 1694.
Walter Bagehot, an influential theorist on the economic role of the central bank.
The Bank of Finland in Helsinki
The headquarters of the People's Bank of China (established in 1948) in Beijing.

At the most basic level, monetary policy involves establishing what form of currency the country may have, whether a fiat currency, gold-backed currency (disallowed for countries in the International Monetary Fund), currency board or a currency union.


Chemical element with the symbol Au and atomic number 79, making it one of the higher atomic number elements that occur naturally.

Gold can be drawn into a monatomic wire, and then stretched more before it breaks.
A gold nugget of 5 mm in size can be hammered into a gold foil of about 0.5 m2 in area.
Different colors of Ag–Au–Cu alloys
Gold(III) chloride solution in water
Schematic of a NE (left) to SW (right) cross-section through the 2.020-billion-year-old Vredefort impact crater in South Africa and how it distorted the contemporary geological structures. The present erosion level is shown. Johannesburg is located where the Witwatersrand Basin (the yellow layer) is exposed at the "present surface" line, just inside the crater rim, on the left. Not to scale.
Oldest golden artifacts in the world (4600 BC - 4200 BC) from Varna necropolis, Bulgaria - grave offerings on exposition in Varna Museum.
An Indian tribute-bearer at Apadana, from the Achaemenid satrapy of Hindush, carrying gold on a yoke, circa 500 BC.
The Muisca raft, between circa 600-1600 AD. The figure refers to the ceremony of the legend of El Dorado. The zipa used to cover his body in gold dust, and from his raft, he offered treasures to the Guatavita goddess in the middle of the sacred lake. This old Muisca tradition became the origin of the legend of El Dorado. This Muisca raft figure is on display in the Gold Museum, Bogotá, Colombia.
Ancient golden Kritonios Crown, funerary or marriage material, 370–360 BC. From a grave in Armento, Basilicata
Gold coin of Eucratides I (171–145 BC), one of the Hellenistic rulers of ancient Ai-Khanoum. This is the largest known gold coin minted in antiquity (169.2 g; 58 mm).
An early mention of gold in the Beowulf
Gold crafts from the Philippines prior to Western contact.
The Agusan image, depicting a deity from northeast Mindanao.
Time trend of gold production
A miner underground at Pumsaint gold mine, Wales; c. 1938.
Grasberg mine, Indonesia is the world's largest gold mine.
Relative sizes of an 860 kg block of gold ore and the 30 g of gold that can be extracted from it, Toi gold mine, Japan.
Gold prospecting at the Ivalo River in the Finnish Lapland in 1898
Gold Nuggets found in Arizona.
Two golden 20 kr coins from the Scandinavian Monetary Union, which was based on a gold standard. The coin to the left is Swedish and the right one is Danish.
Gold price history in 1960–2020.
Moche gold necklace depicting feline heads. Larco Museum Collection, Lima, Peru.
A 21.5k yellow gold pendant watch so-called "Boule de Genève" (Geneva ball), ca. 1890.
Cake with gold decoration served at the Amstel Hotel, Amsterdam
Mirror for the James Webb Space Telescope coated in gold to reflect infrared light
Kamakshi Amman Temple with golden roof, Kanchipuram.
Iron pyrite or "fool's gold"
Minoan jewellery; 2300–2100 BC; various sizes; Metropolitan Museum of Art (New York City)
Pair of Sumerian earrings with cuneiform inscriptions; 2093–2046 BC; Sulaymaniyah Museum (Sulaymaniyah, Iraq)
Ancient Egyptian statuette of Amun; 945–715 BC; gold; {{cvt|175x47|mm}}; Metropolitan Museum of Art
Ancient Egyptian signet ring; 664–525 BC; gold; diameter: {{cvt|30|x|34|mm}}; British Museum (London)
Ancient Greek stater; 323–315 BC; {{cvt|18|mm}}; Metropolitan Museum of Art
Etruscan funerary wreath; 4th–3rd century BC; length: {{cvt|333|mm}}; Metropolitan Museum of Art
Roman aureus of Hadrian; 134–138 AD; 7.4 g; Metropolitan Museum of Art
Quimbaya lime container; 5th–9th century; gold; height: {{cvt|230|mm}}; Metropolitan Museum of Art
Byzantine scyphate; 1059–1067; diameter: {{cvt|25|mm}}; Cleveland Museum of Art (Cleveland, Ohio, USA)
Pre-Columbian pendant with two bat-head warriors who carry spears; 11th–16th century; gold; overall: {{cvt|76.2|mm}}; from the Chiriqui Province (Panama); Metropolitan Museum of Art
English Neoclassical box; 1741; overall: {{cvt|44|x|116|x|92|mm}}; Metropolitan Museum of Art
French Rococo glass bottle mounted in gold; circa 1775; overall: {{cvt|70|x|29|mm}}; Cleveland Museum of Art

In the past, a gold standard was often implemented as a monetary policy.

Monetary policy

Policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing or the money supply, often as an attempt to reduce inflation or the interest rate, to ensure price stability and general trust of the value and stability of the nation's currency.

Clockwise from top-left: Federal Reserve, Bank of England, European Central Bank, Bank of Canada
Banknotes with a face value of 5000 in different currencies. (United States dollar, Central African CFA franc, Japanese yen, Italian lira, and French franc)
Reproduction of a Song dynasty note, possibly a Jiaozi, redeemable for 770 mò.
Yield curve becomes inverted when short-term rates exceed long-term rates.
2016 meeting of the Federal Open Market Committee at the Eccles Building, Washington, D.C.
Mechanics of open market operations: Demand-Supply model for reserves market
1979 $10,000 United States Treasury bond
A run on a Bank of East Asia branch in Hong Kong, caused by "malicious rumours" in 2008.
Gold certificates were used as paper currency in the United States from 1882 to 1933. These certificates were freely convertible into gold coins.
The Bank of Japan, in Tokyo, established in 1882.
The Bank of Finland, in Helsinki, established in 1812.
The headquarters of the Bank for International Settlements, in Basel (Switzerland).
The Reserve Bank of India (established in 1935) Headquarters in Mumbai.
The Central Bank of Brazil (established in 1964) in Brasília.
The Bank of Spain (established in 1782) in Madrid.

The establishment of national banks by industrializing nations was associated then with the desire to maintain the currency's relationship to the gold standard, and to trade in a narrow currency band with other gold-backed currencies.

Great Depression

Severe worldwide economic depression between 1929 and 1939 that began after a major fall in stock prices in the United States.

Dorothea Lange's Migrant Mother depicts destitute pea pickers in California, centering on Florence Owens Thompson, age 32, a mother of seven children, in Nipomo, California, March 1936.
The unemployment rate in the U.S. during 1910–60, with the years of the Great Depression (1929–39) highlighted
The Dow Jones Industrial Average, 1928–1930
Money supply decreased considerably between Black Tuesday and the Bank Holiday in March 1933 when there were massive bank runs across the United States.
Crowd gathering at the intersection of Wall Street and Broad Street after the 1929 crash
U.S. industrial production, 1928–1939
The Great Depression in the U.S. from a monetary view. Real gross domestic product in 1996-Dollar (blue), price index (red), money supply M2 (green) and number of banks (grey). All data adjusted to 1929 = 100%.
Crowd at New York's American Union Bank during a bank run early in the Great Depression
Crowds outside the Bank of United States in New York after its failure in 1931
Power farming displaces tenants from the land in the western dry cotton area. Childress County, Texas, 1938
The Depression in international perspective
The overall course of the Depression in the United States, as reflected in per-capita GDP (average income per person) shown in constant year 2000 dollars, plus some of the key events of the period. Dotted red line = long-term trend 1920–1970.
A female factory worker in 1942, Fort Worth, Texas. Women entered the workforce as men were drafted into the armed forces.
An impoverished American family living in a shanty, 1936
Unemployed men march in Toronto, Ontario, Canada.
Adolf Hitler speaking in 1935
Benito Mussolini giving a speech at the Fiat Lingotto factory in Turin, 1932
Unemployed people in front of a workhouse in London, 1930
Unemployed men standing in line outside a depression soup kitchen in Chicago 1931.
Burning shacks on the Anacostia flats, Washington, D.C. put up by the Bonus Army (World War I veterans) after the marchers with their wives and children were driven out by the regular Army by order of President Hoover, 1932
Buried machinery in a barn lot; South Dakota, May 1936. The Dust Bowl on the Great Plains coincided with the Great Depression.
CCC workers constructing drainage culvert, 1933. Over 3 million unemployed young men were taken out of the cities and placed into 2,600+ work camps managed by the CCC.
The WPA employed 2–3 million at unskilled labor.
Black Friday, May 9, 1873, Vienna Stock Exchange. The Panic of 1873 and Long Depression followed.

One reason why the Federal Reserve did not act to limit the decline of the money supply was the gold standard.


Quality that allows money or other financial instruments to be converted into other liquid stores of value.

This old building for sale in Cheshire, England, has relatively low liquidity. It could be sold in a matter of days at a low price, but it could take several years to find a buyer who is willing to pay a reasonable price.

Under the gold and silver standards, notes were redeemable for coin at face value, though often failing banks and governments would overextend their reserves.

German mark (1871)

The currency of the German Empire, which spanned from 1871 to 1918.

German 5-mark Art Nouveau banknote from 1904, designed by Alexander Zick
Gold mark coins (1⁄2, 1, 5 and 20 mark)
Gold mark coins (1⁄2, 1, 5 and 20 mark)
100 Mark banknote from 1908

The mark was on the gold standard from 1871–1914, but like most nations during World War I, the German Empire removed the gold backing in August 1914, and gold and silver coins ceased to circulate.

Portuguese real

The unit of currency of Portugal and the Portuguese Empire from around 1430 until 1911.

A 500 reais gold coin, King Sebastião of Portugal (1557–1578)
Portuguese Malacca tin coins of King Manuel I's (1495–1521) and King João III's (1521–1557) reigns were discovered during an excavation near the Malacca River mouth by W. Edgerton, Resident Councilor of Malacca, in 1900.
Onça or 12$800 réis minted in 1730 during the Brazilian Gold Rush.
200 réis, King Manuel II of Portugal, 1909.

In 1854, Portugal adopted a gold standard with the milréis equal to 1.62585 g fine gold.