The Glitter of Gold: France, Bimetallism, and the Emergence of the International Gold Standard, 1848-1873

The Glitter of Gold: France, Bimetallism, and the Emergence of the International Gold Standard, 1848-1873

The Glitter of Gold: France, Bimetallism, and the Emergence of the International Gold Standard, 1848-1873

The Glitter of Gold: France, Bimetallism, and the Emergence of the International Gold Standard, 1848-1873


This book studies the so far unexplored operation of the international monetary system that prevailed before the emergence of the international gold standard in 1873. Conventional wisdom has it that the emergence of gold as a global anchor was both an inescapable and desirable evolution, giventhe exchange rate stability it provided and Britain's economic predominance. This study draws on a wealth of archival sources and abundant new statistical evidence (fully detailed in the appendix) to demonstrate that global exchange rate stability always prevailed before the making of the gold standard. This was despite the heterogeneity among national monetary regimes,based on gold, silver, or both. The reason for the stability before the establishment of the gold standard is France's bimetallic system. France, by being in a position to trade gold for silver, and vice versa, effectively pegged the exchange rate between gold and silver at its legal ratio of 15.5. Part I of the book studiesexactly how this mechanism worked. Part II focuses on the respective behaviour of private concerns and arbitrageurs on the one hand, and authorities such as the Bank of France on the other hand, in order to underline the constraints and opportunities that were associated with bimetallism as aninternational regime. Finally, Part III provides a new view on the collapse of bimetallism and its replacement by a gold standard. It is argued that bimetallism might well have survived, and that the emergence of the gold standard was by no means inescapable. Rather, it resulted from a massivecoordination failure at both national and international levels - a failure that was a preview of the interwar collapse of the gold standard.


Deciding whether or not to publish a translation of my book L'Or du monde caused me a good deal of hesitation. A priori, the exercise promised to be boring. It required reopening old files, which I had not only shut down long ago for what I thought was an unlimited time, but which in addition used early versions of one popular brand of software whose maker is renowned for his products being unusable by their own later versions.

Moreover, pieces of the picture had already appeared in English-language journals and had hopefully been read by the same people who might be interested by this book. If they wanted the whole story—well, I decided they would have to study French.

But people turned out not to study French. And this gradually became a problem as controversy took on, and as several aspects of the views developed in the following pages began being discussed in English-language works. The result was that material relevant to some aspects of the discussion remained basically inaccessible to the general reader: this material makes up the entire subject of Part II of this book, and large chunks of Parts I and III, which in retrospect do contain some of the most important aspects of the argument, again from the vantage point of recent debates.

Economic historians have become aware of the main thesis put forward here—that bimetallism could have survived and that the emergence of the Gold Standard was not an inescapable outcome—this having been the subject of a 1996 paper in the Journal of Economic History. But several other themes, equally or more important in my opinion, have so far remained out of the discussion. They revolve around the following. The same movement that has led to seeing, inappropriately I believe, the Gold Standard of the late nineteenth century as the result of a natural and inevitable trend has also led researchers to downplay the importance of previous regimes, which have therefore gone largely unstudied—shockingly when one thinks of the massive amount of literature dealing with the period 1880-1914. It is as though the international monetary system was born in 1873, and nothing, or nothing worthy of interest, had existed before.

This situation is to be deplored. It means that huge portions of global monetary history and the lessons they may carry for us stay in the dark waiting to be investigated. In the meantime, the bulk of research is inexorably attracted, just like night insects, by the glitter of the Gold Standard. This is a pity, especially at a time when economic globalization should be forcing scholars to follow every possible lead in order better to understand its challenges. The consequences of this situation are compounded when it comes to European monetary history. In effect, the debate about European monetary unification did not follow the collapse of the inter-war Gold Standard. Rather, it preceded the creation of the pre-First World War International Gold Standard after 1873. The debate about bimetallism lies at the heart of European monetary history: whence its relevance to understanding the monetary infrastructures of the time and

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