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CHAPTER V<br />
Characteristics of <strong>the</strong> <strong>Gold</strong> St<strong>and</strong>ard<br />
<strong>Gold</strong> presents ... a combination of useful <strong>and</strong> striking<br />
properties quite without parallel among known substances.<br />
W. STANLEY ]EVONS, 1875.<br />
This chapter will attempt to explain briefly <strong>the</strong><br />
outst<strong>and</strong>ing characteristics of <strong>the</strong> genus gold st<strong>and</strong>ard<br />
<strong>and</strong> <strong>the</strong> following chapter will describe its three<br />
principal species.<br />
WHAT CONSTITUTES A GOLD STANDARD<br />
Definition <strong>and</strong> Explanation<br />
From <strong>the</strong> preceding historical discussion <strong>the</strong> reader<br />
has seen <strong>the</strong> nature of <strong>the</strong> generic gold st<strong>and</strong>ard.<br />
This st<strong>and</strong>ard may be briefly defined as a monetary<br />
system where <strong>the</strong> unit of value, in terms of which<br />
prices, wages, <strong>and</strong> debts are customarily expressed<br />
<strong>and</strong> paid, consists of <strong>the</strong> value of a fixed quantity<br />
of gold in a large international market which is substantially<br />
free.! .<br />
,10bviously, for <strong>the</strong> gold st<strong>and</strong>ard to function, <strong>the</strong> international market<br />
must be more than a very narrow one, <strong>and</strong> obviously, also, it is unrealistic to<br />
expect a market that is 100 per cent free.<br />
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