Abstract

Twice Britain suspended in an emergency the obligation to pay gold for paper: by a minute of the Privy Council on 26 February 1797, which began what a modern chronology calls the Restriction Period of 1797 to 1821, and by the Gold Standard (Amendment) Act of 21 September 1931. A well-known reading in monetary economics treats such suspensions as the escape clause of a commitment rule: in war or financial crisis a country could stop convertibility for a time, so long as the public expected a return to the old parity (Bordo and Kydland 1995). The reading descends from the argument that a rule fixed in advance can do better than discretion (Kydland and Prescott 1977), and it sits uneasily beside the interwar story in which the countries that left gold were freed to expand and recovered sooner (Eichengreen 1992; Eichengreen and Sachs 1985). This article asks whether the suspension documents themselves wrote down what would end the suspension. It reads the Minute, Thornton's Paper Credit of 1802, the Bullion Report of 1810 and the Act, beside Skeptron's modern summaries of the two episodes. Three ways of writing an end appear. The Minute names a procedure (until Parliament could be consulted); the law in force by 1810 named an outside event (six months after a definitive peace); the committee proposed a date (two years, peace or war). The Act of 1931 names only a procedure in the government's own hands, and gives a fixed term to an ancillary power alone. The modern records keep the dates and lose these distinctions; one of them supplies a term with hindsight that the actors never wrote.