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The Monetary History of Gold: A Documentary History, 1660-1999

Author(s):Duckenfield, Mark
Reviewer(s):Officer, Lawrence H.

Published by EH.NET (December 2004)

Mark Duckenfield, editor, The Monetary History of Gold: A

Documentary History, 1660-1999. London: Pickering & Chatto,

2004. xix + 536 pp. ?99/$160 (hardcover), ISBN: 1-85196-785-0.

Reviewed for EH.NET by Lawrence H. Officer, Department of

Economics, University of Illinois at Chicago.

A Review Article

A new collection of historical documents is always welcomed by

scholars. This is especially so if the collection is

theme-oriented, so that specialists can acquire new information or

readier access to existing information. Therefore the present

volume, presented as a documentary history of gold, warrants

careful review. The editor, Mark Duckenfield, explains that the

project was financed by the World Gold Council?s Public Policy

Centre ?to raise awareness among journalists, scholars and the

informed public of gold?s role as a monetary asset? (p. xvii). This

review will be concerned solely with the book?s place in the

scholarly literature.

What is the World Gold Council? According to its website

(http://www.jewelrynet.com/WorldGold/),

?the World Gold Council is a non-profit association of the world?s

leading gold producers, established to promote the use of gold …

and its promotional activities cover markets representing some

three quarters of the world?s annual consumption of gold.? It is

interesting, therefore, that the volume contains no documents that

deal with gold production, gold consumption, or gold investment.

Indeed, these categories do not even enter the index, which, at

over eleven pages, is not short. Only in one editorial passage does

the editor discuss the role of gold as an investment. Duckenfield

sees gold and the stock market as investment alternatives, and

observes that ?the stock market?s decline since 1999, as well as

the increase in international tensions as a result of the terrorist

attack on the World Trade Center in New York on 11 September 2001

and the second Gulf War in 2003, brought a resurgence in the gold

market as investors returned to gold as a traditional safe-haven in

troubled times? (p. 327). He explicitly states that ?gold … [is]

a non-interest bearing asset.? Notwithstanding the sponsorship,

this is a book that adopts a scholarly viewpoint and can be

appreciated by historians.

In this review the book is placed in context with existing

collections of historical documents that have the same,

gold-oriented, theme — in whole or in part. These books are listed

in Table 1, in chronological order; full citations are provided in

the references at the end of this review.

Table 1

Pages Devoted

Exclusively to Historical Documents

Book

Pages

Number

Percent of Book

U.S. Senate (1879)

596

65

Horton (1887)

87

28

Laughlin (1896)

38

11

Huntington and Mawhinney (1910)

812a

100

Shrigley (1935)

87

81

Krooss (1969)

3232a

100

Duckenfield (2004)

536a

100

a Includes index.

In terms of absolute size Duckenfield is in the middle of the

pack, fourth out of seven in total pagination. With 100-percent

devotion to documents, the book?s relative size in this respect is

shared by only two other collections: Huntington and Mawhinney

(subsequently referenced as ?Huntington?) and the massive,

four-volume work of Krooss. Considering the other books in Table 1,

what else is in them apart from historical documents and associated

editorial commentary? U.S. Senate contains proceedings of the

International Monetary Conference of 1878. These are presented as

contemporary recording rather than historical documentation;

therefore these proceedings are not included in the

historical?document pagination. Horton and Laughlin are each mainly

a monetary treatise. Shrigley offers non-document information,

quantitative and qualitative, on gold and the Bank of England (of

which, more below). It may be noted that S. Dana Horton, a U.S.

delegate to international monetary conferences, not only authored

and edited the historical documents in Horton (1887) but also had

been responsible for the historical documents included in U.S.

Senate (1879).

Table 2 summarizes the anatomy of Duckenfield and the six other

works. In Table 1 all historical documents are included to obtain

the page count; in Table 2 only those documents that fall within

categories covered by Duckenfield are incorporated. (These are

called ?pertinent documents,? in this review.) Some judgment on the

part of this reviewer is involved. For example, Duckenfield has one

document pertaining to the greenback period as a suspension of

specie payments; documents under that category are included for the

other works. An opposite example: Duckenfield has a document on

goldsmith banking; this reviewer judges that insufficient to

incorporate the category ?commercial banking.? Again, measured by

number of documents, Duckenfield is fourth among the seven

collections.

Table 2

Anatomy of Duckenfield

and Related Works

?

?

Book

?

No. of

Docs.a

Sections

Editorial Commentary:

by

?

No.

?

Basis

Sub-sections

?

Vol.

?

Section

?

Document

U.S. Senate

91

5

countryb

noc

yes

nod

no

Horton

40

2

topic

no

no

no

noe

Laughlin

22

6

countryf

no

no

no

no

Huntington

142g,h

4i

topic

yesj

no

no

no

Shrigley

20

1

yes

no

no

Krooss

123h

10

time

yesk

yesl

yes

no

Duckenfield

153

3

time

no

yes

yes

yes

a Of type in Duckenfield volume.

b Also ?Miscellaneous? and ?Monetary Union.?

c Except for one subsection.

d Except for one section.

e Except for one document.

f Also ?Latin Monetary Union.?

g ?Acts? only. Excluded are ?Revised Statutes,? of

which 162 are pertinent.

h Excluded are documents in categories omitted by

Duckenfield: government financing, commercial banking, U.S. central

banking, U.S. paper money (except for greenback period).

I Of which only two are of type in Duckenfield

volume.

j ?Acts? and ?Revised Statutes.?

k Basis: by topic.

l By Paul A. Samuelson.

All the collections except Shrigley are divided into sections,

some chronological, some by country, some by topic, as Table 2

shows. Only two of the works have systematic subsections. Within

sections and subsections, ordering is uniformly chronological.

Regarding editorial commentary, Duckenfield is unique, and deserves

praise, for having editorial introductions in all three

manifestations: for the entire volume, by section, and for the

individual documents within each section. Because entries in a

collected volume of documents generally are excerpts rather than

the entire documents, this reviewer appreciates Duckenfield?s

practice of calling attention to non-reprinted parts of

documents.

The three sections of Duckenfield warrant discussion, here in

the context of editorial commentary. The introduction to the first,

?The Rise of the Gold Standard, 1660-1819,? is concerned entirely

with British monetary history. Duckenfield observes England?s

movement from bimetallism to a de facto gold standard in 1717. He

notes the interruption of the Bank Restriction Period in this

process. It is reasonable to confine discussion to Britain, because

it was the only country on a gold standard well into the nineteenth

century. However, it would have been in order to discuss the

bimetallist systems of other countries.

The second section, ?The Heyday of the Gold Standard,

1820-1930,? has a broader introduction, including topics such as

the expansion of the gold standard, the price specie-flow

mechanism, the U.S. shift from an effective silver to an effective

gold standard (with the interruption of the greenback period), the

deflation of 1873-1896, and London as the center of the gold

standard. The end of the classical gold standard with World War I

is noted, as is the return to the standard after the war.

Duckenfield discusses the issue of convertibility but can be

criticized for ignoring that of credibility (of countries?

commitment to convertibility at the existing mint price), which

underlay the success of the classical gold standard.

In his introduction to the third section, ?After the Gold

Standard, 1931-1999,? Duckenfield sees a weak institutional

structure as the cause of instability of the interwar gold

standard. ?Domestic social tensions? and the ?prospect of

substantial budget deficits? drove countries off the gold standard.

War and ?new social realities? meant that political and economic

institutions that supported the gold standard could not overcome

political demands that occurred during the Great Depression. Again,

reference to the issue of credibility, now the lack thereof, in

government?s commitment to convertibility would have been in

order.

The introduction also discusses the International Monetary Fund,

the role of the dollar, and the ?Triffin dilemma? (the trade-off

between liquidity and confidence). On the U.S. suspension of gold

convertibility in 1971, Duckenfield writes: ?Ironically, although

it was the weakness of the dollar relative to gold that brought

about the collapse of the Bretton Woods system, it was gold that

was removed from its primary position as a monetary asset while the

devalued dollar became even more crucial to the smooth operation of

the international economy? (pp. 326-327). It can be argued, rather,

that it was U.S. commitment to a fixed dollar price of gold that

artificially made gold the first?class monetary asset.

Table 3 divides the pertinent documents of each work into

chronological sections (pre?1820, 1820-1930, post-1930)

corresponding to the Duckenfield partitioning, except that Horton?s

original partitioning is retained, because it is so close to that

of Duckenfield chronologically. Of course, the four documents

antedating Shrigley lack the third (post?1930) section, because of

the date of publication.

Table 3

Number of Pertinent

Documents — by Type and Time Period

?

Book

?

Period

No. of Documents

Official

Private

U.S. Senate

1666-1819

46

5

1820-1877

36

4

Horton

1663-1817

26

5

1818-1882

9

0

Laughlin

1778-1819

2

0

1820-1893

20

0

Huntington

1778-1819

20

0

1820-1908

122

0

Shrigley

1694-1819

2

0

1820-1930

14

2

1931-1933

1

1

Krooss

1652-1819

15

0

1820-1930

64

7

1931-1968

35

2

Duckenfield

1660-1819

34

18

1820-1930

34

2

1931-2004a

61

4

a Although the title of the book states the full

period as 1660-1999, one document (in an appendix) pertains to the

year 2004.

What are the components of official versus private documents?

Official documents consist of country and international items.

Country official documents include acts, resolutions,

announcements, reports, memoranda, communications, statements,

declarations, representations, speeches, notes on petitions,

parliamentary diaries, proclamations, mint correspondence, and

press conferences. International documents (all official) consist

of treaties, conventions, resolutions, agreements, press releases,

communiqu?s, and decisions. Private documents include treatises,

books, pamphlets, diaries, discourses, petitions, speeches,

reports, correspondence, memoirs, newspaper articles, and

memoranda.

As one would expect in collections of documents, the vast

majority of documents are official, in all the works. Duckenfield

is unique in having private documents constitute a significant

proportion — over one-third the total number — of documents in

the pre-1820 period.

Table 4 offers an alternative division of pertinent documents –

by country (Britain, United States, other countries), with

international as a separate category. For private documents, the

subject country is taken. For official documents, the country

category is the country of the official document rather than the

subject country or countries. All seven works concentrate on

Britain and/or the United States. Huntington and Krooss deal only

with the United States, Shrigley only with Britain. Laughlin has

U.S., other-country, and international — but not British –

documents; while Horton includes only British and international

documents. The only works with documents in each category are the

earliest and latest: U.S. Senate and Duckenfield. As would be

expected, U.S. Senate has somewhat more U.S. than British documents

overall (but not for the pre-1820 period).

Table 4

Number of Pertinent

Documents — by Country and Time Period

?

Book

Period

Number of Documents

Britain

United States

Other Countries

International

U.S. Senate

1666-1819

26

20

5

0

1820-1877

7

17

2

14

Horton

1663-1817

31

0

0

0

1818-1882

5

0

0

4

Laughlin

1778-1819

0

1

1

0

1820-1893

0

13

4

3

Huntington

1778-1819

0

20

0

0

1820-1908

0

122

0

0

Shrigley

1694-1819

2

0

0

0

1820-1930

16

0

0

0

1931-1933

2

0

0

0

Krooss

1652-1819

0

15

0

0

1820-1930

0

71

0

0

1931-1968

0

37

0

0

Duckenfield

1660-1819

50

1

1

0

1820-1930

22

7

5

2

1931-2004

27

23

4

11

One would predict a balanced British/U.S. division on the part

of Duckenfield, given that neither the book-title nor the sponsor

is specific-country oriented. Then one would be disappointed,

because a British emphasis is present in every period. The

asymmetry is apparent in several ways:

1. There are nine documents of the Bank Restriction Period but

only three from the greenback period and nothing on other U.S.

suspensions of specie payments.

2. There is an entry for the Bank of England charter, but not

for the Federal Reserve Act.

3. There are more entries for Acts of Parliament than for U.S.

legislation.

4. The British Coinage Act of 1870 is reprinted in full; not so

the U.S. Coinage Act of 1873, which admittedly is a longer Act.

In fairness to Duckenfield, it should be noted that, while

Winston Churchill?s famous Budget Speech of 1925 returning the

United Kingdom to the gold standard is excerpted, William Jennings

Bryan?s at least equally famous ?Cross of Gold? Speech is reprinted

in full. Also, there are many entries involving U.S. abandonment of

the gold standard in 1933-1934.

Notwithstanding the generally British orientation of

Duckenfield, Horton is the better source for material on the

history of the guinea — perhaps the most famous coin in British

history, and, along with the (new) sovereign introduced in 1817,

one of the country?s two most important coins. Only seven of

Horton?s 31 documents on the guinea are included in Duckenfield.

The guinea is notable as a coin for two reasons. First, its initial

value of 20 shillings corresponded to the pound sterling.

Interestingly, the guinea was not the first coin with this

property; that distinction belongs to the old sovereign, introduced

in 1489. Second, the fineness of 11/12th was firmly established

with the guinea (and continuing with the new sovereign); but again

the guinea was not the first coin with that fineness (that honor

belonging to the crown in 1526).

Shrigley, totally specialized on Britain, has a specific theme

within gold. She writes: ?The purpose of this collection of

documents is to show the official position of gold as a marketable

commodity from the Incorporation of the Bank of England to the Gold

Standard (Amendment) Act of 1931? (p. vii). Of her 20 documents, 12

are not in Duckenfield.

Table 5 breaks down the ?other-countries? category of Table 4

into specific countries. Duckenfield does not provide a rationale

for his concentration on Switzerland in the 1920-1930 and post-1930

periods in this respect, nor for inclusion of material on countries

such as Chile and Yugoslavia post-1930. It is also arguable that

France and Germany deserve greater attention than all three works

give these countries.

Table 5

Number of Pertinent

Documents — by ?Other Country? and Time Period

?

Book

?

Period

Number of Documents

France

Germany

Switzerland

Remaining

U.S. Senate

1666-1819

5

0

0

0

1820-1877

0

2

0

0

Laughlin

1778-1819

1

0

0

0

1820-1893

0

2

0

2a

Duckenfield

1660-1819

1

0

0

0

1820-1930

1

1

2

1b

1931-2004

1

0

2

1c

a Italy, Austria.

b Chile.

c Yugoslavia.

Table 6, similarly, partitions the ?international? category of

Table 4. Duckenfield can perhaps be criticized for neglecting the

international monetary conferences of the nineteenth century. Yet

he deserves praise for including the, post-World War I, Treaty of

Versailles — relevant because of the gold-denomination of the

monetary obligations imposed on Germany.

Table 6

Number of Pertinent

International Documents — by Organization and Time Period

?

Book

Period

Number of Documents

?

International Monetary

Conferences

Latin Monetary

Union

Bank of International

Settlements

International Monetary

Fund

?

Central Banks

?

?

Other

U.S. Senate

1820-1877

12

2

Horton

1818-1882

4

Laughlin

1820-1893

3

Duckenfield

1820-1930

1

1a

1931-2004

2

4

3

2b

a Treaty of Versailles.

b Tripartite Agreement, Smithsonian Agreement.

Duckenfield deserves praise on a number of counts. First, for

some documents, the contents of appendices are listed. (Indeed,

that is sometimes the full text of the entry.) These contents can

be useful references for the scholar. Second, Duckenfield makes use

of generally neglected sources: Bank of England archives and the

House of Lords Record Office. Third, some documents may be new to

historians. Examples: a ?confidential telegram? (one of many) sent

on September 20, 1931, from the Bank of England to domestic and

foreign correspondents; the Rothschild letter on fixing the price

of gold in 1939, just prior to World War II.

A serious limitation of the Duckenfield volume is the neglect of

quantitative information. Only three documents have a quantitative

aspect: the original Articles of Agreement of the IMF, which

contains the list of country quotas; the IMF Executive Board

decision on the Smithsonian Agreement which lists exchange rates

for member countries; and, perhaps most interesting to historians

because probably not available elsewhere, three documents from the

Bank of England?s Archives providing data on gold holdings of

countries occupied by Germany, in 1940. In contrast, the documents

in U.S. Senate contain many useful tables on U.S. exchange rates,

gold and silver prices, and coinage.

Shrigley presents several useful time series (which are not

included in the list of her documents, in Tables 2-4): the annual

gold-silver market price ratio, 1867-1932; the London market price

of gold, annual 1870-1932, daily 1919-1925; and the London market

price of silver, monthly 1833-1933. The last is an insert at the

end of the book, and includes also annual data on silver coined in

England, the amount of bills and telegraphic transfers drawn in

England on Indian governments, exports of silver to the East,

imports of silver, average Bank Rate, and remarks (generally

historical). It is a large and impressive table, which,

unfortunately, because not attached to the volume, may be missing

from many copies. Not a time series, but nevertheless useful, is a

list of Governors of the Bank of England from inception to 1920,

along with dates of service.

In conclusion, the Duckenfield volume is a useful addition to

collections of historical documents on gold, and would be best

utilized by scholars in conjunction with existing works of a

similar ilk.

References:

Horton, S. Dana (1887). The Silver Pound and England?s

Monetary Policy since the Restoration, together with the History of

the Guinea, illustrated by contemporary documents. London:

Macmillan.

Huntington, A. T., and Robert J. Mawhinney, eds. (1910). Laws

of the United States Concerning Money, Banking, and Loans,

1778-1909. National Monetary Commission, Senate Document No.

580, 61st Congress, 2nd session. Washington:

Government Printing Office.

Krooss, Herman E., ed. (1969). Documentary History of Banking

and Currency in the United States, four volumes. New York:

Chelsea House in association with McGraw-Hill.

Lauglin, J. Laurence (1896). The History of Bimetallism in

the United States. New York: D. Appleton.

Shrigley, Irene, ed. (1935). The Price of Gold: Documents

Illustrating the Statutory Control through the Bank of England of

the Market Price of Gold, 1694-1931. London: P.S. King &

Son.

U.S. Senate (1879). International Monetary Conference?held?in

Paris, in August 1878, under the auspices of the Ministry of

Foreign Affairs of the Republic of France. Senate Executive

Document No. 58, 45th Congress, 3rd session.

Washington: Government Printing Office.

Lawrence H. Officer is Professor of Economics at University of

Illinois at Chicago. As Editor, Special Projects, EH.Net, he has

recently completed ?What Is Its Relative Value in U.K. Pounds,? a

calculator available on the EH.Net website (http://eh.net/hmit/ukcompare).

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EH.Net Administrator (administrator@eh.net; Telephone:

513-529-2229). Published by EH.Net (December 2004). All EH.Net

reviews are archived at http://eh.net/BookReview.

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):General, International, or Comparative
Time Period(s):20th Century: WWII and post-WWII