Quotes from “The Rise and Fall of the Gold Standard in the United States”

By George Selgin (2013)

• [A] gold standard can be genuine without being “pure,” that is, despite the presence of paper money (or spendable bank deposits) backed by assets apart from gold itself.#
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• Hume’s price-specie-flow mechanism will operate only if nations’ price levels differ enough to move exchange rates beyond the so-called “gold export” points, reflecting transport and other costs associated with importing goods from abroad. In practice, however, disequilibrium seldom developed to the point of triggering it under the classical gold standard. Instead, so long as gold convertibility commitments remained credible, speculators had reason to buy currencies as they depreciated in the foreign exchange market, and to sell them as they appreciated. Capital movements thus served to keep exchange rates from varying beyond the gold points, making actual gold transfers largely unnecessary.#
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T.E. Gregory, The Gold Standard and its Future (1935)

• The only intelligible meaning to be assigned to the phrase ‘the international gold standard’ is the simultaneous presence, in a group of countries, of arrangements by which, in each of them, gold is convertible at a fixed rate into the local currency and the local currency into gold, and by which gold movements from any one of these areas to any of the others are freely permitted by all of them.#
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Giulio Gallarotti, The Anatomy of an International Monetary Regime: The Classical Gold Standard, 1880-1914 (1995)

• Not only can we say that the Bank [of England] did not manage the international monetary system, but it is questionable whether it even managed the British monetary system.#
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