Before the Decade of 1870, most of the countries traded goods through something called bimetallism. They had a double standard in gold or silver coins. In Britain, the bimetallism remained all the time who fought against Napoleon. Then, when the Napoleonic wars ended in 1816, the British Parliament passed a law making that gold coins were the only legal currency in the country. They took out coins of silver out of the system. In the United States, the bimetallism began with the currency Act of 1792 and was the Act of the majority of the youth of the nation.
Before that each State would have different notes of different banks, U.S. gold coins.UU. they circulated freely with Spanish Doubloons (hence the actions used to trading in eighths). This was a disaster because there were many different forms of money. Then in 1873, Congress took the silver dollar from the list of coins that were minted. The price of silver plummeted the following year.
France, on the other part, clung to bimetallism from the French Revolution until the 1878. Some other countries, such as China, India, Germany and Holland were with silver standard. The international monetary system at the global level before the early 1870s was bimetallism because both the gold and Silver were used for international payments for import and export. Rates of exchange between currencies are determined only by the contents of the gold or silver. Around 1870, the exchange rate between the pound sterling gold standard and the French franc, bimetal pattern was established by the two coins gold content. On the other hand, the exchange rate between the French franc and the German mark (which was in a silver pattern) was determined by the content of silver coins. Then, the exchange rate between the pound and the framework was established by its rate of change against the franc. As if that wasn’t confusing enough, there were all sorts of problems. Through different wars and revolts policies, large countries as the civil war of the United States, the war of Russia and the war of Austria-Hungary had irremediable coins at one time or another from 1848 to 1879. This meant that they had no value in other countries by consequent political uncertainty from the war. So the international monetary system was a mess until the early 1870s.
