Date of Award
Business, Accounting & Economics
Rev. Joseph Mackin
The gold problem can only be understood in the light of history. Gold is the only universal form of money, and has been so for thousands of years. The scarcity of gold pushed mankind to develop the whole complex money system we have today --- paper money, checks and credit, now the chief form of money used in daily business transactions. Throughout time gold has remained the ultimate security for all forms of money. By the 19th century the system crystallized as the gold standard operated, in the main, by the Bank of England, a private institution. By giving the British pound a constant value in terms of a specific quantity of gold, the Bank of England established the pound as universally accepted substitute for gold.3- Other countries similarly guaranteed their money in gold, with the result that almost the entire world had, in effect, a single monetary system. This was literally free enterprise's golden age because of the convertibility of virtually all nations' money into gold, capital flowed freely from country to country. Under this system, world industrial output expanded by nine times in a century and the United States grew from a puny colony to a great world power.
Hurley, Michael, "An Analysis Of The Gold Crisis: Its Development And Proposed Remedies" (1963). Business, Accounting and Economics Undergraduate Theses. 66.