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 halfsovereigns,
 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 occasionally
 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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