Abstract
ABSTRACT The paper examines some aspects of the monetary controversies which took place in several countries during the nineteenth century. In Brazil advocates of the gold standard and monetary restraint, known as metalistas, prevailed over papelistas, whose major desire was monetary expansion and credit creation. It will be argued that previous treatments of monetary debates in nineteenth-century Brazil have overlooked a crucial point, namely, the defence (or otherwise) of convertibility of the mil-réis. This has led to erroneous interpretations of the ideology underlying monetary management in the period.
Highlights
Monetary management was a hotly disputed topic in mid nineteenth-century Brazil
The paper examines some aspects of the monetary controversies which took place in several countries during the nineteenth century
It will be argued that previous treatments of monetary debates in nineteenth-century Brazil have overlooked a crucial point, namely, the defence of convertibility of the mil-réis
Summary
Monetary management was a hotly disputed topic in mid nineteenth-century Brazil. Throughout the debates two broad camps could be identified, metalistas and papelistas. Even though the spirit of the 1846 legislation would dominate most policy actions in the monetary and banking realm in the 1850-70 period, the 27d/1$000 gold parity was effectively in force for fewer than six years: between April 1854 and November 1857, briefly between August 1858 and January 1859, and again between October 1862 and the outbreak of the Souto crisis, in September 1864 These were the periods in which the Bank of Brazil – and, for a while, a few, smaller, banks of issue – ensured convertibility of their notes into gold and, as a result, the exchange rate remained near par. A look at the behaviour of the exchange rate in the period when Brazil was “potentially” under gold reveals little deviation from the 27d/1$000 par value, when allowing for a cost for insurance and shipping of gold as high as 4% of its price
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