gold standard

金本位 ／ gold-standard-short　—　Institutions

Settling the value of money by gold.

GuineaAD 1663–1814 Seated Liberty dollar1860 Twenty-mark gold coin1873

A short way of saying 'gold standard system'. Both forms appear in this course material. To be tied to gold means to promise exchange for gold at any time; to keep this promise, one must hold enough gold to meet all demands for exchange.

In England, which adopted a gold-only standard by the law of 1816, convertibility was resumed in 1821, putting the legally established gold standard into practice for the first time. In 1871, a newly unified Germany declared a gold standard and sold off its silver reserves, causing the price of silver to fall continuously. Russia went on gold in 1897, while Spain never formally made the transition.

⚠ The gold standard was not a matter of prestige, but a qualification for borrowing from abroad.