Britain places the pound on the gold standard

Date

1821

Category

Economy & trade

Region

United Kingdom; spreading globally

Era

Modern

Significance

In 1821 the Bank of England resumed full convertibility of its notes into gold, putting the gold standard into operation in the United Kingdom following the framework set by the Coinage Act of 1816.

For centuries silver, or a bimetallic mixture, had been the principal monetary metal; Britain's move made gold the single reference standard to which other forms of money were adjusted. Because Britain was the dominant trading and financial power of the era, its choice exerted a powerful gravitational pull on the rest of the world. Over the following half-century other states gradually linked their currencies to gold, a process that accelerated after Germany adopted gold in 1871–73 and the United States returned to convertibility in 1879. By the 1870s a classical gold standard had emerged: major economies fixed their currencies to gold at stable parities, producing fixed exchange rates, relatively free capital movement and price stability across the North Atlantic and beyond. This monetary architecture became a defining institution of the first age of globalisation, lubricating an explosion of international trade, investment and migration until the system collapsed at the outbreak of the First World War in 1914.

Empires active in 1821

• Russian Empire
  1721 CE – 1917 CE
• British Empire
  1583 CE – 1997 CE
• Qing Dynasty
  1636 CE – 1912 CE
• Spanish Empire
  1492 CE – 1976 CE
• Portuguese Empire
  1415 CE – 1999 CE
• Mughal Empire
  1526 CE – 1857 CE

Related economy & trade events

• Wall Street Crash and onset of the Great Depression
  24–29 October 1929
• The German Zollverein creates a customs union
  1834
• The Australian gold rushes begin
  1851
• The Panic of 1873 and the Long Depression
  1873–1896
• Weimar hyperinflation
  1922–1923 (peak November 1923)
• Soviet First Five-Year Plan and forced collectivisation
  1928–1933

Further reading

The Silk Roads: A New History of the World

The wider story

The Silk Roads: A New History of the World

Peter Frankopan

Best-selling world history told through the trade routes that moved goods, faiths and ideas.

Get it on Amazon →

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