1914 ended the golden age of the gold standard. When the First World War erupted that summer, the combatant nations suspended the convertibility of their currencies into gold almost immediately — they needed to print money to pay for the war, and a gold anchor made that impossible.
The remarkable price stability of the classical era was over. Though the US held its $20.67 price, the international system that had made gold the bedrock of global finance fractured and would never fully recover. The turbulent interwar decades that followed led through the 1933 confiscation to a wholly new monetary order.
Key events of 1914
- 1914-07-28
The Great War begins
World War I erupts; the major powers suspend gold convertibility to finance the war.