APPENDIX II 
THE GOLD STAND R?D IN ENGLAND BEFORE 
THE 7 7 TormrER 1025 
A COUNTRY is on the gold standard when it uses a 
monetary unit of account which varies in value almost 
exactly with the value of gold bullion in the world 
market. The English monetary unit has for many 
centuries been the ‘ pound,” often called, to distinguish 
it from other pounds, the ‘ pound sterling.” Shillings 
and pence, also used in accounts, are merely names for 
the twentieth and the two-hundred-and-fortieth parts 
of a pound. 
Before the war the currency of England and Wales 
consisted of bronze coins for a penny, halfpenny and 
farthing, silver coins for various sums from 3d. to 5s., 
gold coins for £1 and 10s. called sovereigns and half- 
sovereigns, and lastly, Bank of England notes for £35, 
£10 and larger (always round) sums. There were also 
a few country bank-notes, but as these died out altogether 
before 1925 we may ignore them. 
The bronze and silver coinages formed a purely 
“managed ”’ currency. They were kept at par with 
the rest of the currency by the policy of the Mint, which 
was to coin as much as and not more than could circulate 
comfortably at the appropriate rate. Of course occa- 
sionally a withdrawal of such subsidiary coinage may 
be required by a fall in the demand for it, but since 1816, 
when the policy was first adopted in regard to silver, 
there had been no instance of a considerable decline in 
the demand for bronze or silver coins, so that the 
amount in circulation had been sufficiently regulated 
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