Birth zolotodeviznogo standard

Birth zolotodeviznogo standard

In August 1914, started the First World War, the country split into two nuclei of gold block. The exodus of investors in the pound due to military conflict, has led to an imbalance of payments, and Britain was left with nothing to do, how to enter an extremely tight foreign exchange controls in the form of deferral of domestic and international payments.

The transition to floating rates
Since the beginning of the First World War the convertibility of the pound sterling has not been suspended in legal terms, but the pressure of the Bank of England to the market players and new regulatory procedures, it was almost tantamount to abandonment of fixed exchange rate. The export of gold was restricted, while its imports went directly to reserves the Bank of England. Almost all European countries have followed the gold bloc and Britain have introduced similar measures in the 1914-1915 biennium. The United States entered the war later, the remaining countries, which restrict the convertibility of the dollar was introduced only in 1917, the Truth, in 1914, the New York banks to temporarily put the unofficial embargo on the export of the yellow metal. The result of the widespread restrictions on convertibility was a shift to floating exchange rates.

After the war the international community has attempted to return to the former stability. Laws golden monometallizma implied gradual return to a monetary standard. First, central banks through currency intervention should be to stabilize the exchange rate of national currency. In the second stage for a smooth restore the prewar parity, they had to implement deflationary policies. Many countries have followed the classical pattern (Table 1).

By 1928 the international monetary system regained stability, but lasted only until the beginning of the Great Depression. Contrast to the classical system of interwar gold standard has several distinctive characteristics compared with classical monometallic system. Significantly changed the configuration of national monetary systems (Table 2). Some countries, in accordance with the classical tradition restored convertibility at pre-war parity, while others, devalued their currencies, fixed exchange rates on a new, often maloobosnovannoy mark.

Third countries (included in the German-Austrian coalition) because of the hyperinflationary explosion had to introduce new currency into circulation. The fourth group of countries only gained political independence, and first joined the gold cluster. The fifth group, composed mostly of Latin America, has moved from the silver and bimetallic to a gold standard. Finally, the countries that made up the last group were left out of the world monetary zone. They either came from a gold standard (such as Russia after the revolution), or has not participated in it (like many countries in Asia).

Gold bloc gained extreme heterogeneity. At the same time, there were three types of gold standard. As you can see from Table 1 that dominated the classical period, gold coin standard was much less common in the interwar period. In particular, Britain and France moved to the gold bullion standard, the United States kept the gold coin standard, but Germany has introduced zolotodevizny standard. In the UK law in 1925 restricted the convertibility of the currency amounts in excess of 1.5 thousand pounds sterling. In France a law of 1928, Poincaré allow the exchange of banknotes into gold bullion price of not more than 225 thousand francs. Most countries, as well as Germany, renounced in favor of gold coin zolotodeviznogo standard. The central banks of the Group of States convert their bank is not in gold and currency reserves in secured with precious metals.

The dollar goes to the leaders
Gold Standard steadily drifting toward bivalyutnoy system based on the pound sterling and U.S. dollar. The transition to the new system with two types of reserve assets held before the end of the First World War. By the end of XIX century, after the rejection of bimetallism and silver standard, some countries (mainly «second-line», such as India and Argentina) were of the system zolotosterlingovogo standard. Other countries that have or the larger economy, or significant political weight (Russia, Holland, Austria-Hungary, Japan, Scandinavian countries) to keep some reserves in foreign currencies.

By the end of the war, the general price level of about twice the pre-war. At the same time, gold production declined by one third, but the real sentence reduced because of the refusal of the leading countries to undertake revaluation of metal. As a result, the majority of home search tools, to avoid shortages of gold. In 1922, the Genoese Conference urged States «to keep their reserves in foreign assets».

Genoese conference adopted 12 resolutions on the currencies to allow for zolotodeviznogo standard in order to save metal reserves. In most countries, heeded the recommendations and changed the statutes of central banks, allowing them to keep reserves in foreign currency. Some countries that have imposed restrictions, setting the minimum proportion of gold in total reserves.

Before the war, central nucleus of the gold cluster kept as reserves only monetary gold. An exception is the German Reyhsbank, 13% of reserves which accounted for foreign currency. In 1928 the situation changed radically. In France, the Bank's currency reserves amounted to 51% in reserves Reyhsbanka - 16% in reserves and even the Bank of England - 10% of the portfolio (Table 3).

The positions of the British currency strengthened markedly since the war. If in 1913 to pound sterling accounted for 47% of total foreign exchange reserves, in 1928, its share has increased by nearly half, to 77%. On the role of the leading international currency in the classical period, claimed the French franc, but the post-war devastation undermined confidence in the currency of France (as well as to the currency of the enemy - Germany). The gains from the reallocation of the portfolios of foreign exchange banks were central United States: the share of dollar increased to ten times, which made it to second place in popularity after the British currency.