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Published in:
Some General Remarks on “Central Banking” Read chapter Read first chapter

2016 | OriginalPaper | Chapter

6. The Scandinavian Currency Union (1873–1914)

Author : Steffen Elkiær Andersen

Published in: The Origins and Nature of Scandinavian Central Banking

Publisher: Springer International Publishing

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Abstract

By the mid-1860s, the interest in switching from the predominantly silver standard to a new gold standard, or a bimetallic standard, was spreading throughout Europe, including the Nordic countries. The background was the declining price of silver relative to gold. It became increasingly difficult to maintain the traditional 15½:1 price relationship between silver and gold.

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Footnotes
1
The term “Nordic” is used here, because Finland also participated in these discussions.
 
2
“Jo hurtigere en sådan Overgang skete, des bedre ville man sikre sig mod det Tab, som der for Banken ville være forbundet med Sølvbarrenes Omsætning til Guld.” Direktionsprotokol Nr. 2, pp. 317–18, Sag. 1386. National Archives.
 
3
“…vi have maattet gaa ud fra, at Spørgsmaalet om Nødvendigheden af en Overgang til Guldfoden ikke behøvede nogen Undersøgelse, og… vi slutte os til den forudsatte Tanke om denne Overgangs Nødvendighed.”Betænkning fra Kommissionen angaaende Antagelsen af et fælles paa Guld grundet Møntsystem for de tre nordiske Kongeriger. Ministerialtidenden (“Ministerial Bulletin”) for 1872, p. 545.
 
4
“Art. 1: Dr tre nordiske Kongeriger antage Guld som Grundlag for et fælles Møntsystem…”
“Art. 2: Der udmøntes for de tre Riger fælles Hovedmønt, som kaldes Guldkrone…Af et Kilogram fint Guld udmøntes 248 Stykker Guldkroner….den fælles Regningsenhed skal være Krondaleren, som er Tiendedelen af en Guldkrone. Krondaleren deles i 100 Øre.”
 
5
§ 1. For Fremtiden skal Guld være Grundlag for Danmarks Møntsystem med benyttelse af Sølv og ringere metal til Skillemønt.
§ 2. Der udmøntes to Hovedmønter, den ene saaledes, at 248 Stykker indeholde et Kilogram …fint Guld, den anden saaledes, at 124 Srykker indeholde et Kilogram …fint Guld. Tiendedelen af førstnævnte Mønt …skal være Regningsenhed og kaldes en Krone. Kronen deles i 100 Øre.
§ 3. Guldmønterne udpræges af Møntguld, som er en Legering af 90 Vægtdele fint Guld med 10 Vægtdele Kobber.”
 
6
Cfr. Jahn, Eriksen & Munthe (1966) Norges Bank gjennom 150 År (Norges Bank), p. 120.
 
7
In this connection, “coins” were both the “main coin”, i.e. the 10 krone coin with 90 % gold value (and small circulation), and the decimal coins with much lower metal value and much larger circulation.
 
8
A. Rubow (1920) Nationalbankens Historie I+ II,(Nationalbanken,1918+20), Bd.II, pp. 113–114.
 
9
This 14 paragraph agreement is reprinted in Rygg (1918) Norges Banks Histore I+II (Norges Bank) II, pp. 58–59.
 
10
There is no hard statistical evidence for this assumption. The assumption is that since no major problems surfaced, the flow of payments cannot have been totally out of equilibrium for any length of time.
 
11
cf. C.P. Kindleberger (1984) A Financial History of Western Europe (Allen & Unwin), p. 140.
 
12
When convertibility into silver at par value was introduced in Norway in 1842, it could also be done only at Norges Bank’s head office in Trondhjem.
 
13
“Af Skillemønt skal Ingen være pligtig til i én Betaling at modtage et højere Beløb end 20 kroner i 1- og 2-Kronestykker, 5 kroner i mindre Sølvmønt og 1 krone i Bronzemønt…”
 
14
cf. L.B.Yeager (1966 & 1968) International Monetary Relations (Harper & Row, New York), p. 252.
 
15
The role or fate of smaller countries under the classical gold standard has been examined in A. Ögren & L.F. Øksendal (eds. 2012) The Gold Standard Peripheries (Palgrave Macmillan).
 
16
Those are the years for which the necessary statistics are available. No similar statistics have been found for Norway.
 
17
For a summary of this development in English see e.g. Steffen Elkiær Andersen (2010) The Evolution of Nordic Finance (Palgrave Macmillan), pp. 64–67, 141–42, and 119–21.
 
18
It is outside the scope of this work to go into theoretical discussions of the adjustment mechanisms under the classical gold standard. The standard works on this subject still seem to be A.I. Bloomfield (1959) Monetary Policy under the International Gold Standard 1880–1914, (New York), and O. Morgenstern (1959) International Financial Transactions and Business Cycles (Princeton), both usefully summed up and commented upon by A. G. Ford (1962) The Gold Standard 1880–1914 (Clarendon Press), and, more recently, B. Eichengreen & M. Flandreau (eds. 1985) The Gold Standard in Theory and History (Methuen, 2nd ed. Routledge, 1997).
 
19
“Ethver Riges Finansbestyrelse vil meddele Finansbestyrelsen i de to andre Riger all, Møntforholdene vedkommende love, Anordninger og almindelige Bestemmelser, som måtte blive udgivne til Udførelse af nærværende Overenskomst, eller som i Fremtiden måtte udgå. Ligeledes ville Finansbetyrelserne meddele hverandre en aarlig Beretning om de af. dem i Aarets Løb foretagne Udprægninger af nye Mønter og om Inddragelser og Indsmeltninger af gamle Mønter samt oversende hverandre Exemplarer af alle Mønter, som herefter udpræges.”
 
Metadata
Title
The Scandinavian Currency Union (1873–1914)
Author
Steffen Elkiær Andersen
Copyright Year
2016
Book
The Origins and Nature of Scandinavian Central Banking

Print ISBN: 978-3-319-39749-8

Electronic ISBN: 978-3-319-39750-4

Copyright Year: 2016

DOI
https://doi.org/10.1007/978-3-319-39750-4_6