Humans for as long as there are records have been enfatuated with gold and silver. The first discoverer of gold is lost in the mists of time. A human, perhaps a child, and probbly before the evolution of modern man. It was found as shiny nugget in a creek, washed down from rocks buried in the erthh. This occurred thousands of years ago, and the humanity was immediately attracted to it. Gold is found around the world. Gold was discovered in its natural state, in inumerable streams. Eventualy humans would go up those streams to discover the source of the gold. This occur in the stone age. Gold was surely the first metal known not only to humanity, but to early hominids. Every culture has seen gold as something very special. Every known culture treasured gold in one form or the other. Gold unlike many metals is dispersed widely over the earth's surface. Thus it was discovered by countless different peoples. And all of these societes which found it wre awed by it and wanted more. There are various reasons that humans were attracted to gold. There is the alure of the color, luster and sparkle. And the fact that is so stable, the pure element and not compunds are found it nature. And it is easily worked, extrodinrily malible and has a low melting point, an unlike silver is resistant to tarnish. This it can be worked with the most basic tchnology. The gold-silver ratio has varied over time. It formally dates back to 3100 B.C. The code of the first pharaoh, Menes, set the ratio at "one part of gold is equal to 2 1/2 parts silver in value." The emergence of gold as physical money took place in the form of the Lydian merchants' electrum coins -- 63 percent gold and 27 percent silver (about 700 BC). There are few valubles that have sustained their value for as long as money made out of precious metals have.
Humans for as long as there are records have been enfatuated with gold and silver. Every culture has seen gold as something very special. Every known culture treasured gold in one form or the other. And all of these societes which found it were awed by it and wanted more.
Gold unlike many metals is dispersed widely over the earth's surface. Thus it was discovered by countless different peoples. The first discoverer of gold is lost in the mists of time. A human, perhaps a child, and probbly before the evolution of modern man. It was found as shiny nugget in a creek, washed down from rocks buried in the erthh. This occurred thousands of years ago, and the humanity was immediately attracted to it. Gold is found around the world. Gold was discovered in its natural state, in inumerable streams. Eventualy humans would go up those streams to discover the source of the gold. This occur in the stone age.
There are various reasons that humans were attracted to gold. There is the alure of the color, luster and sparkle.
Metalurgy began with gold. Gold was surely the first metal known not only to humanity, but to early hominids. Gold is extrmely stable. It is the pure element and not compunds are found it nature. Which is why unlike silver is resistant to tarnish. And it is easily worked, extrodinrily malleable and has a low melting points. Thus it can be worked with the most basic technology of any stable metal. The timeline for metal working varies geographically. The earliest evidence of gold working in mainland Europe is found in Bulgaria (4500 BC). Only graduallydid metal worker master other metals, mist imprtantly copper, silver, tin, and then iron. The degree to which this defines human progress can be see in the name of two major eras--the Bronze (copper and tin) and Iron Ages. Historical progress of technologyis strongly related to the development of metalurgy. Along with agriculture, this is certainly the greatest contributions to our species' economic and cultural progress. We think here of bronze and uron, but gold came first.
Gold is an element, but early gold smiths did not have the technology to produce pure gold. Lead isotope and major elenent anaysis (copper, tin, and silver) can used to create elemental signtures. This can be helpful in esrablishing the source of the gold use for ancient gold artifacts.
The relative value of gold and silver (th gold-silver) ratio has varied over time. It formally dates back to 3100 B.C. The code of the first pharaoh, Menes, set the ratio at "one part of gold is equal to 2 1/2 parts silver in value."
The emergence of gold as physical money took place in the form of the Lydian merchants' electrum coins -- 63 percent gold and 27 percent silver (about 700 BC). There are few valubles that have sustained their value for as long as money made out of precious metals have.
Mercantilism was the governing economic policy pursued by European countries during the 15th-18th cenuries. This included the Renaissabnce, Reformation, and Enligtenment. It was an era of government (meaning royal) control of foreign trade. This led to frequent if limited wars. It was during the mercabtilist era that the economies of the East and West began to come together. Through most of the era the West had trouble finding trade goods the Indians and Chinese wanted in exchange for the silk, porcelin, and spices that the West coveted. Gold and silver from the Americas helped finance the trade. Perhaos this was one of the reasons that the evolving trade was western merchants ciming to the East and not the revrse. There was no great spokesman for mercantilism like Adam Smith for capitalism (The Wealth of Nations) and Karl Marx for Communism (Das Kapital). Mercantilism was esentially the attempt of pre-industrial European leaders to gain control over the increasingly complex ecomomies that emerged from the late-Medieval era. The primary goal of the European rulers was to acquire as much bullion (gold abd silver) as possible. This affected the policies pursued. Important topics include the voyages of discovery, American gold and slver, guilds, royal monompolies, the highland clearances, the potato, and slavery.
Spanish Conquistadores conquered the Aztec and Inca Empires in the first half of the 16th century. The result of the booty and the working of existing as well as new mines was a a huge influx of gold and silver bullion flowing into Europe. The impact on the European economy was immense altering the course of history that still affect us today. Columbus and other early expolrers encountered small quantities of gold in the Caribbean, but fantastic accounts of a Kingdom of Gold began to circulate in Europe--the legendary El Dorado. He was a king who was so wealthy that he covered himself with gold dust every day and dove into a lake. Political factors also drove the European conquest. German Emperor and Spanish King Charles V desperately needed gold bullion. Charles had taken out large loans to bribes the electors that made him Holy Roman Emperor (1519). He also faced a costly war with the Turks. The Ottomons moving north took Belgrade (1521). Next they conquered Hungary (1526). Soon they had reached Vienna, the center of Hapsburg rule (1526). Charles not only faced the Turks, but the Protestant Reformation in Germany. This forced Charles to seek even more loans. One way in which Charles paid his loans is by granted licenses to pursue treasure in the Americas. Thus conquistadors financed by European banks descended upon the New World, scouring every corner for the legendary El Dorado. Hernan Cortez defeated the Aztec ruler Montezuma in Mexico (1520) and sent the first large shioment of gold objects back to Spain. Charles V immediately smelted them down to bullion. Francisco Pizarro demanded a ransom for Inca ruler Atahuallpa and obtained a vast treasure of gold and silver objects (1532). The Spanish first simply seized good and siklver objects from the native Americans, in effect looted the artistic trasures of entire civilizations. Historians estimate that about $140 million work of gold and silver objects were obtained from Peru alone between 1531 and 1540. [Hoopes] Then they used the indeginous people as slaves to produce more bullion from existing and new mines. The American treasure, however, quickly passed through Charles' treasury. It served to enable him to take out even more loans. Charles by 1551 had borrowed 14.4 million ducats at interests rates approaching 50 percent. [Hoopes] Charles army did stop the Ottomans from moving further into Christian Europe, but it could not cintain the Protesrant Revolution. But the impact of the gold is much larger. The American gold helped finance Renaissance art. As much of went into the pockets of bankers, it played an important role in the expanding European economy in the countries that had financed Charles. The gold also financed the illfated Spanish Armada unleashed on England by Charles's son Phillip II (1588). Some of the gold flowed into other European treasuries as other maritime powers (England, France, and the Netherlands) began preying upon Spanish treasure ships. Some of the gold can be seen in gold leaf and trasures of the churches across Europe. But much of the rest of the gold is difficult to trace with precission. What is known is that the American gold significantly increased the gold stock of Europe, resulting in both inflation and an expansion of economic activity.
Gold rushes were reoported in ancient times. They are believed to have occurred in ancient Egypt. Actual examples were first reoorted in the Roman Empire. Pliny the Elder described gold mining as Diodorus Siculus. Other precious (espoecially diklc=ver) and base metals involved, but gold was the greatest attraction. It was the 19th century that was the great vage vof gold rushes. There were two reasons for this. First was the emergence of capitalism which provided security for individuals to hold gold. Second Engkish law which meant that that the owners of land had rights to the mineral resources--not the monarch or state. Another factor were the falling costs of migration with the the stean=m engune and ocean liners. The first major gold rush of modern gtumes was the California Gold Rush (1849). Gold was discovered at Sutter's Mill in California (1848). This led to the 1849 gold rush. After California, thte were gold rushes Australia (1851), New Zealand (Otago-1851), Venezuela (mostly British-1871), South Africa (1886), and Canada (Yukon-1896). Smaller gold rushes took place in many other countries. News of gold finds brought in notable rushes of prospective miners to stake their claim on the the richest areas. This had a range of significant effects. Some miners made fortunes, but noit very many. Othgers benefitted by these rushes, including and merchants and transport concerns. The resulting increase in the world's gold supply in econonies based on the gold system stimulated global trade and investment. The resulting mass migration, trade, colonization, and environmental impact had significant imapcts. Gold rushes resulted in waves of immigration that in many cases led to the permanent settlement of lightly populated areas.
The gold standard developed in ancint times. It was not designed, but simply developed as aesult of the universal llure of the precious metal. It resulted from the pschological and not fully understood appeal of gold even before the developmnt of civilization itself. Across culture, gold has been admired fr its beauty. Its indstruability and rarity were all factors. Various commodities over time have been used as money in different cultures. As civilization rogressed, the commodity that loses the least value over time tends to becomes the most accepted as a monetary unit. Gold wasseen as valuable throughout the ancient world. The first documented use of gold as money began in Asia Minor (Anatolia). Gold was used as currency in the Rman wrld, although silver was more common for everydy commerce. After the fall of the Wstern Empire, the Byzantine gold solidus (the bezant) was used widely throughout Europe and the Mediterranean furing the early and mid-medival period. As the Byzantine Empire and economy declined so did its ability to mint gold coins's economic influence declined, so too did its suppy of gold and ability to mint gold coins. As the European economy grew and natin states formed, the new coutries began to mint their own coins. Most focused on silver which was available in greater quantities. Silver standards developed in part because there were silver mines in Europe, but few sources of gold. Here the monetary history varies from country to country. In Mercia (an British Anglo-Saxon kindom, King Offa (c757�796 AD) minted silver pennies based on the Roman denarius. Other silver coins included the Italian denari, French deniers, and Spanish dineros circulated throughout Europe and not just in the countrie here they were minted. As the pace of European commerce quickened and the economy began emerging from the medieval period, economic activity was impaired by the lack of an adequate monetary base. This began to change with Columbus' discovery of the America's. Spanish Conquistadores launched expeditions onquering Ntive American empires because theypossessed gold and silver. And the Spanish subsequently discovered vast silver deposits in Mexico (1522) and Bolivia (1545). Potosi in Bolivia was esentially a silver mountain. Spanish galleons brought vast shioments of silver to Europe which dramaically affected the Europran economy. International trade came to depend on coins based on Spanish bullion especially silver. It financed trade with Chinas the Europeans had little the Chinese wanted. Coins such as the Spanish real de a ocho (pidces of eight) and Maria Theresa's thaler (the origine of the term dollar) became essential in international trade. Gradually because of the enormous sums involved in international trade shifted to a gold system. This began a period of bimetalism. The British along with the Dutch were becoming the centers of European finance. This shift to gold appears to have begun in the British West Indies in asociation with the emensely profitable sugar trade. This began with Queen Anne's proclamation as part of a money bill (1704). The resulting British West Indies gold standard was a de facto gold standard based interestingly enough on Spanish gold doubloon coins. The next move was made by none other than Sir Isaac Newton, the master of the Royal Mint. Newton established a new mint ratio between silver and gold (1717). This had the effect of driving silver out of circulation and essentially put Britain on a gold standard. The Royal Mint at Tower Hill following the Napoleonic Wars introduced a new gold sovereign (1816). The British Government then adopted a formal gold specie standard (1821). A shortage of specie impaired the development of the U.S. economy and was involved in a serious depression (1830s). This was in part alieviated by the discovery of gold in Califirnia (1848). The United Province of Canada adopted a gold standard (1853) and Newfoundland (1865). Two new industrial powerhouses, the United States and the new German Empire--de jure) adopted the gold srandard (1873). The United States used the double eagle coin as its unit. Germany introduced the new gold mark. Canada adopted a dual system based on both the American gold eagle and the British gold sovereign. Australia and New Zealand followed by adopting the British gold standard as did the British West Indies which by this time was no longer of economic importance. Newfoundland which was not yet part of Canada was the only British Empire territory to introduce its own gold coin. Britain itself no longr had gold mines. Australia did. The Royal Mint opened branches in Sydney, Melbourne and Perth to mint gold sovereigns. A major political issue developed in America where Democratic political candidate wanted to increase silver coining, meaning inflation, and labeled the gold standard a 'cross of gold'. The gold specie standard came to an drupt end in Britain and the British Empire with the outbreak of World War I.
The major industrial nations maintained a gold standard, meaning that their currencies were pegged to the price of gold and maintained large gold reserves. The centrl bankrs of the era were committed to the gold standard with a virtually religious devotion. [Ahamed] World War I had a huge impact on the international financial system. The war nearly destroyed what had been the central element in the internationl finncial system--the gold standard. None of the belligerenant countries demonitized gold or refused to buy gold at fixed prices, none continued the the basic tenents of the pre-War gold standard. With the outbreak of war, both the belligerants and the United States adopted official and unofficial actions affecting fiscal policies and the gold standard. This was seen as temporary measures given the fact that most officials believed that the War would be a short conflict, over in a few months. It almost was. No one forsaw abanding the gold standrd as a desorable permanent outcome. Wars have to be financed and the gold standard placed a brake on a country's financing.
German financial officials before Hitler and Stalin launched World War II managed to obscure the level of the German Government's massive and growing debt. This allowed Hitler to pursue a massive rearmament program without causing a financial melt-down. Once Hitler took over Austria (April 1938) and Czechoslovakia (March 1939) he had access to new financial resources. Austria was annexed to the Reich. Czechoslovakia could be exploited ruthlessly. One of the first actions taken in both countries was to seize the Government's gold stocks. The same rutless policies were followed with the invasion of Poland and the outbreak of the war (September 1939). Exploiting the economies of occupied countries was critical to the NAZI war economy. Seizing foreign gold stocks was an important part of the NAZI effort. This was because Hitler began the war with an economy that lacked many vital resources. And the War meant that few neutral countries wanted to accept Reich Marks to pay for imports of critical natural resources. Hitler got oil from his allies, first the Soviet Union and then Romania, neither of which required Germany to use its gold supplies. Other resources could be looted from occupied countries. But other resources such as iron ore, cobalt, tin, tuhgsten and other metals as well as manufsctured goods had to be imported from neutral nations (Portugal, Spain, Sweden, Switzerland, and Turkey). And for this the NAZIs needed gold. Thus the Germans as they overan country after country, immediately went after each country's gold reserves. Yhe Poles managed to get most of their gold to France, but France itself was also endangered. As a result, massive gold shipments began arriving in the United States (Spring 1940). The gold came from Belgium, Britain, France (including the Polish gold), the Netherlands, and Norway. The story of NAZI efforts to gets their hands on the goild of occupied countries is a fascinating World War II story. The NAZIs also wnt after gold in individual hands. Here the major tarket was the Jews in Germany and the occupied countries. The Japanese in Asia also needed gold, but there was less gold to be had in China and the European colonies they occupied. There the most important World War II story is Yamashita's gold.
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