Germany made gold the standard throughout the new German
Empire (having prepared the way by legislation in 1871 which made
gold a legal tender alongside of silver), and provided that silver was
thenceforth to be used only in the subsidiary coinage. The same year
Belgium, and the next year the other countries of the Latin Union
(France, Switzerland, and Italy) took steps which resulted in
demonetizing silver; that is, in limiting its coinage to governmental
account, and in making gold their one standard money.

The United States at that time had neither gold nor silver regularly
in circulation (except in California), and there was a long-continued
discussion of "a return to specie payments," which meant the return
to a metallic standard, and the redemption of greenbacks on demand.
Meantime in 1873 a law was passed making the gold dollar "the unit of
value," and dropping out the standard silver dollar from the list of
coins authorized to be issued at the mint.[6] From 1873 until 1879,
prices (in greenbacks) were falling in this country very rapidly
because the country with the increase in population, wealth, and
business, was "growing up to" its unchanging currency supply. For a
like reason at the same time gold prices throughout the world were
falling. While this country was lowering its level of prices from an
inflated paper money to a gold commodity basis, the gold basis itself
was sinking to a lower level. The very demand of our treasury and
banks for gold caused the retention of our own gold product (which
between 1864 and 1876 had been nearly all exported) and required an
enormous net importation of gold between 1878 and 1888. This
reduced suddenly by one-half the amount available each year from our
production for the rest of the world.

Sec. 6. #Definition of the standard of deferred payments.# These various
changes in the purchasing power of the standard money had great
effects upon industrial conditions. Particularly had they shifted the
positions and claims of debtors and creditors, because of the enormous
importance of money as "the standard of deferred payments," Let us now
get a more definite understanding of that term.

As a medium of exchange, money comes to be the unit in which most
prices are expressed and compared; in other words, it becomes
the common denominator of prices.[7] This makes it also the most
convenient unit in which to express the amount of credit transactions
and of existing debts.[8] A