Currency in the modern world

As the British Empire expanded so did the possibilities of trade and commerce. Financial speculation both at home and abroad, whilst often lucrative, could lead to financial crisis. A truly global economy therefore suffered on a global scale.

Away from a capitalist system, in communist states, money has a different role to play in society, but one which can still be beset with problems.

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British empire notes – Mauritius Commercial Bank<br>To be written by BA following discussions with Leigh Gardner.
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    $20 banknote issued by the Mauritius Commercial Bank, Mauritius, 1839 

    The practicalities of banknotes…

    As the British Empire expanded, the governments of the newly-claimed territories wanted to make international trade easier. To do this they produced paper notes rather than coins because they were cheaper to make and easier to transport. Private banks obtained charters to issue notes, often in too great a number which led to inflation.

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    George III gold sovereign  

    The bimetallic standard…

    In the 1800s precious metals were used as the basis for issuing currency. Countries used gold, silver, or a combination (called a bimetallic standard) to back the currency they issued. Currencies had fixed rates of exchange with precious metals which helped stabilise exchange rates and encourage trade. However, the choice of precious metal could cause economic difficulties, and was sometimes politically controversial.

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    Silver satirical medal, attributed to Christian Wermuth, Made in Germany, 1720  

    Bubbles and bankruptcy…

    Financial crises have been a common feature of global economic history. They have been triggered by wars, speculative manias linked to demand for government debt, infrastructure projects like canals and railways, and demand for a range of commodities including cotton and tulips. New ways of expanding the money supply have also led to speculative bubbles, which burst if people lose confidence.

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    South sea annuities certificate 

    Bubbles and bankruptcy…

    Financial crises have been a common feature of global economic history. They have been triggered by wars, speculative manias linked to demand for government debt, infrastructure projects like canals and railways, and demand for a range of commodities including cotton and tulips. New ways of expanding the money supply have also led to speculative bubbles, which burst if people lose confidence.