Silver standard

A silver standard is a monetary standard under which the monetary value is defined in the currency units used as the value of a fixed amount of silver. Usually, a silver standard with the embossing and the circulation of silver coins is connected as Kurantmünzen. Also, silver bars were - in addition to coins - at times, such as used the Chinese tael bullion coins as official currency units or as a money value coverage for banknotes (see cash statement) and coins used.

History and function of silver standards

In Germany there were about 800 ( Carolingian coinage reform of Charlemagne ) to 1871 (introduction of the Empire gold ) a silver currency. Applies a silver standard, the value of each good or service is compared with the value of silver or based on this. Even compared to the total amount of tradable goods and services, the value of the silver is not stable for long periods of time. Rather, the value varies often over time periods at an average value which is dependent on the silver procurement costs and psychological factors. Silver itself is a tradable commodity whose price depends on supply and demand (see commodity money ).

The comparison of the value of every commodity and service with silver as a standard of value, did not mean that would always "price stability" prevailed. In particular, crop failures, wars and population and productivity developments of trade and industry had from the Middle Ages to the modern era, major impact on prices. Coins and paper money later subject in times of crisis compared to a Kurantmünzen increased depreciation, so that legal stipulations between the different Münznominalen (varieties ) were then no longer be enforceable. See the classic example of " Kipper und Wipper " time of 1621/23 ( Thirty Years War).

At the same time of the silver standard circulating gold coins had a course Silberkurantgeld, which was read on the exchange lists of stock exchanges. The parallel to the silver money at the same circumferential gold coins had the function of " special money " for certain transactions. With gold, for example, expensive goods have been paid for and it was handled with the international trade (trade coin). In commercial contracts for goods and larger amounts of money or promissory notes has been drawn between the agreed " Geldart ," such as " Prussian Courant " or " Friedrich d'or ". In Prussia the 18th century, a relatively large amount of gold " Friedrich d'or " for higher payments ran to find the official Silberkurantgeld eg. Since the fluctuation in the price of gold coins was usually restricted by law, had the former system certain features of bimetallism.

Transition to the gold standard

( see main article Gold Standard) The replacement of silver standards in Europe by the gold standard went from England, who was then by far the world's leading industrial and trading nation. Immediate cause was that the British government under a one bimetallism - compared to the market price - determined to set high price of English gold coins. In England, therefore, was a lot of gold coins - again compared to the market price - be converted into "too much" silver in the form of silver coins. This silver could be sold profitably abroad. Silver coins disappeared from circulation, then in England (see Gresham's Law). In fact, a gold standard had been formed from a bimetallism.

In wake of the global silver inflation after the abandonment of silver standards by the German Empire came in 1873 in British India to a creeping devaluation of the rupee against the gold-backed pounds. The rupee based namely still on the silver standard. This was particularly significant for the payment of the Home Charges. The Home Charges were billed in pounds spending that had to pay India to the "mother country".