ABSTRACT
Contrary to the common understanding that territorial state currencies became dominant with the advent of the international gold standard, as argued by scholars such as Helleiner, this chapter will reveal that alternative monetary systems survived beyond state control in many places around the world, and the incorporation of multiple monetary devices operating at the ground level into single national systems was not yet complete in the period before World War II. The international gold standard that dominated before and after 1900, when national economies had central banking systems which blurred the boundaries between the four quadrants within each national territory, extended their regime outward to assimilate other parts of the world in which the functional division of the four quadrants still operated. Through this process, absorbing local currency circuits particularly from peasant economies in Asia and Africa, convertible monies seemed headed for global dominance. At that time, the notion of a single currency under a sovereign authority became the dominant practice. However, an alternative to the gold standard system stubbornly remained. International silver coins, such as the Maria Theresa dollar in Africa and the Mexican dollar in East Asia, increased in circulation to provide an outlet for interaction between peasant households and the international market with unfixed exchange rates. In the end, currencies under the gold standard system were too convertible to accommodate monetary demands diversified horizontally as well as vertically. After the significant fall in international trade through the 1930s, and the proliferation of managed currency systems in which a central bank monopolized the issuance of currency, the complementarity among multiple currencies appeared to vanish, with the exception of a division of labour between the standard currency for international settlements, US dollars and a number of currencies homogeneously mediating transactions within national borders. Organizing the means of exchange in endogenous ways from the ground level became illegal, transitional and negligible, though it did not completely disappear, as shown by the example of flourishing native notes in 1930s China.
