A Comparative Chronology of Money

Monetary History from Ancient Times to the Present Day

1900 - 1919

© 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

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

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

p 583

1900 US Gold Standard or Currency Act
The great increase in America's stock of gold leads to abandonment of bimetallism. The act also halves the minimum capital requirement for the smallest national banks, thus stimulating an increase in their numbers, and raises the limitations on the issue of notes.

p 497

1900 Bank of France has representation in 411 towns, including 120 full branches
Owing to its very extensive network of branches and offices, commercial banks have not developed as vigorously as their British and German counterparts.

p 556-557

1900 Industrial Bank of Japan founded
Its purpose is to provide long-term loans and debentures to assist the mining and metallurgical industries in particular.

p 584

1901 Number of Japanese banks reaches a peak of 1,867
Thereafter amalgamation and mergers reduce the number.

p 583

1902 Straits Settlement (Singapore) dollar introduced
This is intended as a replacement for the foreign coins which are demonetized two years later.

p 626

1903 French coins and notes are still far more important than bank deposits
Bank deposits form only a tenth of the French money supply whereas coins account for half. Bank note circulation is 8 times as high as the Bank of England's issues and the Bank of France's gold reserves are even higher than its note issues.

p 557-558

1904 Foreign coins lose legal tender status in Singapore
The demonetization of Mexican and other foreign dollars simplifies cash transactions.

p 626

1906 Switzerland and Japan establish postal giro systems
They are the first countries to follow the example of Austria which established the world's first postal giro system in 1883.

p 584

1907 International bank crisis starts in New York
Unlike earlier US panics which tended to start in weak country banks, this one starts in the trust companies in New York. They are not members of the clearing system that might have been able to prevent the crisis snowballing. Hundreds of American banks fail. In contrast Britain weathers the storm with ease and this motivates proposals for a system of central banks in the US.

p 361,498-502

1908 US Aldrich-Vreeland Act
As a response to the panic of the previous year this allows groups of a minimum of 10 national banks to form National Currency Associations to issue temporary currency. The act also sets up a National Monetary Commission which authorizes 42 separate reports, most of which contain studies of foreign banking systems.

p 501

1909-1911 Lloyd George anticipates the British welfare state
As chancellor of the exchequer Lloyd George introduces a revolutionary series of budgets. In order to finance welfare benefits the taxation system is made much more progressive, efficient and buoyant - just in time to finance the First World War. Warfare engulfs welfare.

p 367

c. 1910 Horses still used as money by the Kirghiz in the Russian Empire
The Kirghiz people in central Asia have long used horses as their main monetary unit and store of value. Sheep are used as subsidiary units and small change is given in lambskins.

p 42

1911 US Postal Savings system established
Because of opposition from the commercial banks the postal savings system does not develop in a substantial way.

p 501

1911 Issues of silver coins in British west Africa exceed those in Britain
The annual amount of silver issued increases from an average of £24,426 in the 5 years up to 1890 to £847,850 which exceeds the amount currently being issued for use in the United Kingdom.

p 601

1912 West African Currency Board (WACB) established
The WACB is set up to be responsible for the issue of currency in the British colonies of Nigeria, the Gold Coast (Ghana), Gambia, Togoland and the British Cameroons. The main form of currency produced is silver coins. Gold coins quickly vanish from circulation to be used as ornaments while bank notes are used mainly by traders and government agents.

p 602-603

1912 China ceases minting its traditional cash coins
After a couple of millennia use of these traditional Chinese base metal coins comes to an end.

p 56

1913 Chamberlain Report on Indian Currency and Finance
The report includes a memorandum from one of its members, J.M. Keynes, arguing that there is no need for the internal circulation of gold in India. He also points out that India's strong habits of acting as a sink of the precious metals pose deflationary dangers not only to India itself but also to Europe.

p 623

1913 Pujo Committee Report on the powers of the US money trust
The committee, established the previous year, reports that power over money and credit is concentrated in just a few hands. It signals an end to laissez-faire in US banking.

p 501

1913 US Federal Reserve System established
Instead of a single central bank, like the First and Second Bank of the United States, 12 Federal Reserve districts are established each with its own reserve bank. All national banks have to become members of the system and the state banks are given conditional permission to join. Banks are also allowed to establish branches abroad.

p 501-502,524

1913 Number of German savings banks reaches 3,133
Their total assets are more than double those of the commercial banks.

p 570

1913 Number of industrial credit co-operatives in Germany reaches 1,500
By this time they have well over 800,000 individual members and outstanding credits of over 1.5 billion marks.

p 570

1914 Number of rural credit co-operatives in Germany reaches 17,000
Their growth has mushroomed since the first one was set up by Friedrich Wilhelm Raiffeisen in 1846.

p 570

1914 German Reichsbank has over 100 main branches
In addition it has 4,000 sub-offices. Thus the Reichsbank's regional representation is far stronger than that of the Bank of England in Britain.

p 571

1914-1918 First World War
Despite the huge revenues raised from taxation the British national debt rises tenfold. The government fails to use its bargaining power, as the only really massive borrower in wartime, to get money at low rates of interest.

p 367-373

The French national debt rises from 28 billion to 151 billion francs and the note issue increases over 6-fold.

p 562

Germany relies more on borrowing, particularly short-term, and less on taxation than Britain. Consequently its policy is more inflationary.

p 572

Japan's industry is greatly stimulated by the war. By 1918 Japan has passed from being a debtor to a creditor country.

p 584

1914 New British notes issued and gold is withdrawn from circulation
New one pound and 10 shilling notes are issued by the Treasury, not the Bank of England, and postal orders and Scottish and Irish banknotes are made legal tender. The success of the new notes allows banks to withdraw gold gradually from internal circulation, thus putting a quiet end to the gold standard.

p 369-370

1917 The world's first billion pound loan is raised
Within 6 weeks of the issue of the third War Loan by the British government the money is raised.

p 372

1917 US enters 1st World War
As a result the national debt increases from about $1 billion in 1916 to $25 billion in 1920.

p 504

1918 French Giro established
As France makes relatively small use of cheque payments at the time of the giro's foundation, this system of money transfer fulfils unmet needs and grows rapidly. By the time Britain's giro is established 50 years later the French one is the largest in the world.

p 561

1919 US Edge Act to promote foreign banking indirectly permits bank branches
This amendment to the Federal Reserve Act allows the chartering of corporations for the purpose of engaging in international or foreign banking. Despite the legal prohibition of branch banking these corporations can be set up anywhere, including other states in the US.

p 524,538

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Roy Davies - Last updated 25 May 2005.