Today, there are about two hundred states. All of them are subjects of the world economy. All states, in addition, are legally equal to each other.
The first national currency market was formed in the 19th century after the end of the industrial revolution. Its basis was gold monometallism in the form of a gold standard. Legally, the first currency structure was formalized at the Paris Conference by an interstate agreement, signed in 1867. In accordance with it, gold was recognized as the only international form of money. Moreover, it performed the direct function of money. The monetary and monetary systems (both world and national) were identical. The difference, however, was only that, entering the market, coins were accepted as payments in accordance with their weight.
The Paris monetary system basically had several structural principles.
First of all, the base was the gold standard. Secondly, each currency had its own content. In accordance with it, their gold parities were determined. All currencies were freely convertible into gold. At the same time, it was used as universally recognized international money. Thirdly, the Paris currency system provided for a regime of exchange rates floating freely taking into account supply and demand on the market within the framework of gold points. When the market rate fell below parity, debtors paid in gold.
The Paris currency system invested in the gold standard the value of a certain spontaneous production regulator, a mechanism for managing foreign economic relations, balance of payments, money circulation, and international payments. This standard showed its relative effectiveness until the First World War, when a lever functioned to help balance the balance of payments and the exchange rate.
The Paris currency system forced states with a deficit balance of payments to pursue a deflationary policy. At the same time, countries limited their money supply during the outflow of gold abroad. However, for example, in the UK, despite a stable, “chronic” deficit in the balance of payments, there was no net tide. For almost a hundred years before the First World War, only the Austrian thaler and the American dollar were devalued. At the same time, the French franc, like the pound sterling, kept its gold content unchanged from 1815 to 1914. Applying the priority role of the pound in international settlements, the UK compensated for the deficit in the balance of payments using the national currency.
Characteristic is the fact that in the midst of the triumph of the gold standard, international class calculations were carried out mainly with the use of drafts. These bills of exchange were issued in national, mainly English, currency. At the same time, gold has long been used when paying a passive balance in the balance of international payments. Towards the end of the 19th century, there was a tendency to decrease both in the money supply and in the official reserves of the gold share. Precious metal began to be superseded by bargaining money. At the same time, the use of deflationary policy in regulating the exchange rate, lowering prices and increasing unemployment provoked social discontent.
Over time, the gold standard has ceased to comply with the framework of growing economic ties and the conditions of a market economy. The outbreak of World War I coincided with the crisis of the international system. At the same time, military spending was financed (along with loans, taxes, inflation) using gold, which acted as international money.