The other cross of gold : the United States and the search for global monetary stability, 1867-1900

This study examines the official diplomacy and transnational discourse surrounding the spread of the international gold standard between 1867 and 1900. The sustained nature of these exchanges among advanced and emerging economies of the period was driven by global deflationary pressures that coincided with dramatic monetary policy changes in Europe, Asia, and the Americas. As such, the diplomatic struggle between states that sought to alter the international gold standard and those that defended the emerging monetary status quo offers a clear window into the politics of nineteenth-century globalization. Between 1878 and 1897, the United States led efforts to modify international monetary relations by replacing the gold standard with an international bimetallic standard. The central object of US diplomacy was to change the gold standard policy of Britain. The nineteenth-century global economy was largely a creation of British policy and historical circumstances. A change in British policy, thus, implied a change for the entire commercial world linked to Britain. I make two central arguments about these diplomatic events. First, that the US campaign for an international bimetallic standard was pursued with far more policy-minded purpose than previous interpretations allow. Prior studies have judged most of these efforts as sideshows driven by the calculations of electoral politics rather than sincere responses to global economic conditions. Second, I argue that the policy proposals embodied in US efforts emerged within a far broader, far lengthier transnational discourse than previous interpretations suggest. Past studies have portrayed the economic views that underpinned US diplomacy as peripheral ideas espoused by a minority far from the mainstream in economic thought. Persistent US initiatives to alter international monetary relations through diplomacy ultimately ended in failure. This result, however, rested more on failures of politics than on the outré nature of international bimetallism and its advocates. At several key junctures, considerations of geopolitical rivalry and the constraints of political ideology in Europe overwhelmed US efforts. This failure left in place the deflationary pressures imposed by the gold standard until the late nineteenth century, when new gold discoveries provided exogenous monetary relief and removed the impetus for further diplomacy.