Keynes was Opposed to the Pre-World War I Gold Standard, because, by Failing to Effect an Economy in the Use and a Centralization of Gold Reserves in the Vaults of the Central Bank, it Hampered the Monetary Authority in its Attempt to Protect the Economy from Internal and External Disequilbria.

John Maynard Keynes' opposition to the gold coin standard was voiced as early as 1913 in his first major work, Indian Currency and Finance. Keynes pointed out that, although, a gold coin standard worked successfully in a creditor country, it did not work equally well in a debtor country such as India. Keynes recommended for India and all other such debtor countries, which did not have highly developed nor self-supporting money markets, a modified gold standard. The difference between the gold coin and gold exchange standard rests in the partial suspension by the latter of free payments in gold. Keynes favored a gold exchange standard for India, because he thought that such a plan would accord greater stability to the Indian currency and price systems. The reason why Keynes suggested that gold be withdrawn from active circulation is that the nations of Europe would need all the gold they could muster to combat fluctuations in their rates of exchange.