Demonetization

( Fin.) Act of demonetizing, or depriving of monetary character or power; literally, "the taking money out of" (silver, gold, paper, .), implying that the substance or object demonetized had been previously endowed with monetary attributes, presumably by a power identical with or equivalent to the power which demonetizes. A universally satisfactory definition is rendered difficult by the various meanings ascribed to the term "money," and the resulting differences of opinion as to the extent to which monetization may be effected by law. (See MONEY.)-D. of Silver. Prior to 1871 the only countries that maintained the single gold standard of currency were as follows: Great Britain and her colonies (officially since 1816, but practically since 1774), Portugal, Turkey, Persia, Brazil, and the Argentine Republic. The single silver standard was in vogue in Germany, Holland, Austria, Ru ia, the Scand in avian countries, Egypt, India, China, Japan, Mexico, Central America, Peru, Ecuador, and Bolivia. In all other countries the double standard (silver and gold) was legally maintained, although the metals were not concurrently circulating in all. In 1871 the German Reichstag pa ed a law providing for the establishment of the gold standard, which went into full effect in 1873. This was speedily followed by a similar action by the Scand in avian countries, and by the U. S. in 1873, at which time neither gold nor silver was circulating in this country, and the bullion price showed that, at our legal ratio of 16:1, our silver dollar was worth, as metal, at least 21⁄2c. more than the gold dollar. (See BIMETALLISM.) The Latin Union (q. v.) suspended silver coinage in 1876, and Holland did the same. In 1879 the Austrian mints were closed to silver, and 13 years later that nation took active steps to establish the single gold standard. About the same time Roumania took similar action; and in 1893 the mints of British India were closed to silver, as a first step in the direction of establishing the single gold standard of the Empire. Santo Domingo, Ru ia and Japan are among the latest important nations to renounce the use of silver as standard money, the two last named being now (1897) upon an actual paper basis. It should be clearly understood that, in economic usage, D. doen not mean the disuse of a substance as silver-in the currency, but its disuse as standard money, or "money of final nal redemption." All gold standard countries employ silver in their subsidiary coinage, and some of them circulate it as a full legal tender. D. occurs when a metal is no longer recognized as a so-called "standard of value," and is denied unlimited coinage as such.