A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1880 - 1899

© Roy Davies & Glyn Davies, 1996 & 1999.

Based on the book: A History of Money from Ancient Times to the Present Day by Glyn Davies, rev. ed. Cardiff: University of Wales Press, 1996. 716p. ISBN 0 7083 1351 5. (Page numbers in the 3rd edition published in 2002 may be slightly different).

1850-1914 Huge amounts of capital are exported from Britain
Huge amounts of British capital are invested abroad, especially after 1890, in the United States, parts of the British Empire, and Argentina. The total reaches billions of pounds. Britain's later economic problems may be partly due to the neglect of British industry by the banks during this period.

p 348-352

1860-1921 Number of banks in the US increases by over 19 times
During the same period bank numbers fall in other advanced countries but in the US a peak of nearly 30,000 is reached in 1921.

p 490-491

1865-1926 The Latin Monetary Union
This comprises France, Italy, Belgium, Switzerland, and later Greece. The gold and silver coins of each country are legal tender throughout the union. The union has faded away by the 1920s before its formal ending.

p 443,492-493,557

1870-1893 Plentiful silver supplies cause fall in value of Indian and other Asian currencies
After 1870 there is a vast increase in the amount of silver coming on to world markets because of new mines and the demonetization of silver as Germany, Scandinavia and other countries switch to the gold standard. As a result the undebased silver coinage of India, and the currencies of China, Japan and south east Asia, countries comprising half the world's population, suffer an unprecedented fall in value.

p 622

1873-1924 The Scandinavian Monetary Union
Denmark, Sweden and Norway form a monetary union similar to the Latin one but with gold as the standard for their currency.

p 356,443

1873-1886 The Great Depression in Britain
The British economy is in decline relative to that of the US and Germany. One effect of the Depression is to cause doubts about the merits of the gold standard.

p 353,493

1880 Mitsubishi and Yasuda Banks founded in Tokyo
These are both Zaibatsu banks based on existing family trading empires. By 1912 the Yasuda Bank has absorbed 17 other banks.

p 583

1880 Yokohama Specie Bank founded
This is the first of a number of special banks established to assist the growth of the Japanese export trade.

p 583-584

1881 Postal Orders are introduced in Britain
These are an immediate success and although they are introduced instead of Post Office notes which would have competed with commercial banknotes, the postal orders are nevertheless used as currency in some areas for the next 10 years and are made legal tender after the outbreak of the First World War.

p 338

1882 Bank of Japan founded
After a careful study of European central banks - the Americans do not have one at this time - the Japanese decide that the National Bank of Belgium is peerless and it is chosen as a model for Japan's national bank.

p 582

1883 Austria establishes the world's first postal giro system
Subsequently this example is widely followed in other European countries and Japan. For a more detailed account of the history of giro systems see Davies, Glyn. National Giro : modern money transfer/ foreword by James Callaghan. London : Allen and Unwin, 1973. 246p ISBN 0 04 332054 6

p 584

1886 Gold and Silver Commission considers replacing Britain's gold standard
The Commission is asked to advise the government how best to overcome the fall in prices caused by the Great Depression. Two famous economists, Alfred Marshall and F.Y. Edgeworth, recommend symmetallism where the legal standard would consist of a fixed weight of both gold and silver but nothing comes of this suggestion.

p 493

1890 First Barings crisis
Barings have become heavily involved in financing British investment in South America, especially Argentina. After the failure of one deal and a revolution in Argentina, Barings is within 24 hours of bankruptcy when it is saved by support from the Bank of England and all the main City of London banks.

p 346

1890 China issues silver coins
Up to this time China has rarely used precious metal coins, its normal coins being base metal cash of a design unchanged since ancient times.

p 56

1890 US Sherman Act
This obliges the Treasury to buy 4.5 million ounces of silver each month.

p 495

1890 Cheques account for 90% by value of financial transactions in the US
The supply of the main source of money in the US is not subject to uniform rules but to the regulations of the different state and federal authorities responsible for banks.

p 489-490

1891-1901 Number of Japanese savings banks increases twentyfold
By 1901 the total is 441. Up from a score ten years earlier.

p 583

1892 Liberator Building Society fails in Britain
The Liberator had become involved in speculative deals, lending money secured only by second or third mortgages. It is brought down by the failure of the London and General Bank and in turn the Liberator brings down a number of other building societies.

p 329-330

1893 Bank panic in the US
A bank panic, similar to the one 20 years earlier, breaks out. Bank clearing houses use clearing house certificates for settling inter-indebtedness, leaving the precious notes and gold available for their fearful personal customers.

p 499

1893 US silver purchase laws cancelled
The abundance of silver on the world market enables gold to be purchased in the US at favourable rates, leading to a gold drain. Fearing that supplies of gold will be insufficient to back note circulation President Cleveland cancels the silver purchase laws.

p 495

1893 Herschell Report on India's silver currency
In accordance with the recommendations of the committee set up because of the fall in the value of the Indian rupee, the British authorities close Indian mints to the free coinage of silver. The resulting reduction in the circulation of rupees raises their exchange value and it is stabilized at 15 rupees to the gold sovereign, preparing the way for a move towards the gold standard.

p 622-623

1894-1895 Sino-Japanese War
By the conclusion of the war Japan has acquired sufficient gold reserves to make possible the replacement of its traditional silver standard by the gold standard two years later.

p 582

1894 Building Societies Act
This act is the outcome of a parliamentary inquiry into the fall of the Liberator. It forbids advances on second or subsequent mortgages, increases the powers of the Chief Registrar of Building Societies, and prevents new societies from allocating mortgages by ballot.

p 330

1894 Bank of British West Africa founded
The first bank to be created in Britain's west African colonies starts operations in Lagos. Branches are also opened in Accra, Gold Coast (Ghana) in 1896 and Freetown, Sierra Leone in 1898.

p 601

1894 British dollars minted for colonies in the Far East
Most of the British dollars are minted in Bombay.

p 626

1895 Sumitomo Bank founded in Osaka
This Japanese bank is founded by an existing Zaibatsu trading organization.

p 585

1896 Hypothec Banking Act in Japan
This provides umbrella legislation under which a number of industrial and agricultural banks are set up.

p 584

1896 William Jennings Bryan runs for the US Presidency
Bryan is a very vigorous supporter of bimetallism and opponent of the gold standard but he loses the election to the Republican candidate William McKinley.

p 496

1897 Japan officially adopts the gold standard
Following the successful conclusion of the Sino-Japanese War two years earlier Japan has accumulated sufficient gold reserves to make the transition from the silver to the gold standard.

p 582

1897 Hypothec Bank of Japan founded
This is the first bank to be established under the Hypothec Law of the previous year. The bank provides farmers and entrepreneurs with long-term loans.

p 584

1898 Fowler Report on Indian Currency
The reduction in the circulation of rupees after 1893 and the high rates of interest needed to maintain its value have led to complaints that trade is being strangled. The Fowler Committee recommends renewed issues of gold sovereigns and half sovereigns as part of the move towards the gold standard.

p 623

1899 Bank of Japan completes replacement of other banks' note issues
The Bank of Japan's notes are fully convertible into gold. All other notes cease to be legal tender.

p 582

1899 Hokkaido Colonial Bank founded
It is established to strengthen the economy of the northern Japanese province of Hokkaido.

p 584

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Roy Davies - Last updated 25 May 2005.