Following Germany's adoption of the gold mark in 1871, a growing number of industrializing countries pegged their currencies to a fixed quantity of gold, making the gold standard the dominant basis for international monetary exchange by the late nineteenth century. A shared gold standard allowed merchants and banks in different countries to settle international trade payments with more predictable exchange rates, reducing some of the currency risk in cross-border commerce. Britain had been on a gold standard since the early nineteenth century, and its financial dominance helped encourage other nations to follow. Not all countries adopted gold fully or at the same time, and the system had uneven effects on economies dependent on silver or agricultural exports.
Relevance to Trade History
Provided a common monetary framework that made settling international trade payments more predictable, supporting the growth of global commodity and manufactured-goods trade.
Read the full story in our article The Gold Standard and the Rise of International Finance.
Source: Federal Reserve History (Federal Reserve Bank of St. Louis). See our Sources & Methodology page for how we select and verify references.