The Life and Death of the Gold Standard

C11　—　Chain of people

The gold standard was not born of nature.

Supervised by: Mitsuru Hayama　／　Reading time (main text): course text ~8 min + textbook ~32 min = ~40 min　／　Beyond the text: 11 exercises · 2 coins · 13 readings · 2 references

What this course teaches you to do

• You can state, with grounds, the year the gold standard began and the year it ended.
• You can explain why Newton's report on the ratio is taken as the beginning.
• You can explain why returning at the pre-war rate brings pain.
• You can point out what is missing from "go back to gold and things will be stable."
• Can narrate Japan's return to the gold standard (the old parity, the Shōwa Depression, terrorism), including the ultimate fates of the key figures.
• Can explain the end of the gold standard (from Bretton Woods to Camp David) from the perspective of the decision-making process.

TEXTBOOK

Lessons (8)

1. It was a physicist who set the ratioThe gold standard did not begin with a declaration. A ratio was set, the undervalued silver left, and gold remained.
2. The theory was written while convertibility was suspendedThe theory was written not before the system but after it had stopped. Do not remember the order backwards.
3. What happened in the year of the returnThe trouble was not the gold standard itself but the rate of return. Match the nominal to the past and the real takes the pain.
4. The day the window was closedIn the end only the dollar was tied to gold. So when the dollar closed, everything came undone.
5. At the Old Parity — The Door of Inoue JunnosukeThe question was not whether to open it, but how. The choice of the old parity led to depression and an assassin's bullet.
6. Not the Glory of the Currency — Keynes's OppositionThe opposition to the return to the old parity was argued from the perspective of wages on the street. The prediction became reality the following year.
7. Entrusting Gold to a Single Nation — The Thirty-Five Dollars of the White PlanThe gold standard did not die; it rode on the back of the dollar. Thirty-five dollars per ounce of gold—the reality of the nation where the world's gold gathered.
8. A Weekend at the Mountain Lodge — August 1971The gold window was closed on Sunday night television. The administrative last day of a two-thousand-year metallic era.

Case studies — applied in the materials (13)

• Newton's Great Recoinage　Britain　1696　The mint in the Tower of London
  §1. The scene of replacing clipped silver with milled coin.
• Newton's Great Recoinage　Britain　1717　The Mint in the Tower of London
  §1. Newton's report fixing the ratio. From here the silver goes out.
• Churchill's mistake　Britain　1925　Whitehall, the Treasury
  §3. The scene of the decision to return at the pre-war rate.
• Churchill's mistake　Britain　1926　The streets of London
  §3. What happened the year after the return. Read without settling on a single cause.
• Churchill's mistake　Britain　1925–1931　The Bank of England
  §3. How the man who decided looked back on it years later. ⚠ Mind the hedge "it is said."
• Bretton Woods　United States　July 1944　Bretton Woods, the seat of the British delegation
  §4. The plan that was not adopted. See what was different about it.
• 15 August 1971　United States　August 1971　Camp David, the lodge in Maryland
  §4. The scene of the weekend on which the decision was taken.
• 15 August 1971　United States　15 August 1971　All America, before the television
  §4. The three pillars announced on television. Check them in the original.
• From the lifting of the gold embargo to war　Japan　1930　Tokyo and the silk-raising villages
  Section 5. The choice of how to open the way, and its price. A record from an era when lives were on the line.
• Churchill's mistake　Britain　1925　London, a study
  Section 6. A real-world example of the art of dissent. Look to the wages in the street.
• Bretton Woods　United States　July 1944　Bretton Woods, the seat of the American delegation
  Section 7. The thirty-five-dollar design. The reality of power becomes the system.
• The gold of Brazil (3)　Portugal　the 18th century　The Royal Mint, London
  This stop looks at where the gold came from before the gold standard was established. Please trace why the gold mined in Brazil and passed through Lisbon remained in London.
• The Gold Never Came　India　1898–1913　The site of settlement
  This is an account of the gold standard from the perspective of a side that did not receive gold. Please ascertain the meaning of Keynes's rephrasing when, in a book written at the age of thirty, he called this not a gold standard but a pound sterling exchange standard.

Assessment

11 exercises in this course (7 check, 1 compare, 3 written). Progress is recorded by self-assessment.

References

• Gold Reserve Act of 1934 — Federal Reserve History (Federal Reserve Bank of Richmond ほか)　Signed on 1934-01-30. Transferred ownership of all monetary gold in the US to the Treasury and prohibited the redemption of dollars for gold.
• Roosevelt's Gold Program — Federal Reserve History　The United States was on a de facto gold standard from the 1830s and a de jure one from 1900, which was incorporated into the framework of the Federal Reserve System in 1913.

Only works and primary sources whose existence has been verified are listed.