Bimetallism: on the origin of the Gold Standard

In the old Ages, money consisted simultaneously of silver and gold coins. As fiduciary money was introduced, Governments specified their value in terms of weights of either silver or gold. Some adopted both gold and silver, for example, 15 ounces of silver equal 1 ounce of gold (Case of United States in 1792).

But prices of silver and gold can fluctuate on a free market. If, for example, price of gold goes up because the ratio above overvalued silver, gold holders could buy silver in the market and take 15 ounces of silver to the mint to be coined and accept payment in gold. If this goes on, it's a matter of time that gold would be drained from the mint so thatsilver, the cheaper metal in the market, would, in the end, become the standard.

In United States, because the 15/1 ratio of 1792 overvalued silver, silver became the standard. Then when the ratio was changed in 1834 to 16/1, it was gold which was overvalued so that gold became finally the standard.

In Europe, except in Great Britain, silver also became a standard.

As for Great Britain, Sir Isaac Newton, the famous scientist, was also the master of the mint, overvalued Gold so that Gold became a standard in that country.

Later the widespread of Gold Standard was due to the temporary decrease of Gold on the market - as gold mines were discovered - and the dominance of Great Britain in International Finance.