1911 Encyclopædia Britannica/Demonetization

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DEMONETIZATION, a term employed in monetary science in two different senses. (a) The depriving or divesting of a metal of its standard monetary value. From 1663 to 1717 silver was the standard of value in England and gold coins passed at their market value. The debasement and underrating of the silver coinage insensibly brought about the demonetization of silver in England as a standard of value and the substitution of gold. During the latter half of the 19th century, the tremendous depreciation of silver, owing to its continually increasing production, and consequently the impossibility of preserving any ratio of stability between it and gold, led to the abandonment or demonetization of the metal as a standard and to its use merely as token money. (b) The withdrawal of coin from circulation, as, for example, in England that of all pre-Victorian gold coins under the provisions of the Coinage Act 1889, and the royal proclamation of the 22nd of November 1890.