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 The silver standard
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The restructuring of the monetary system had progressed so far that notes could be declared redeemable with coins and rules of coverage were introduced to ensure that the Nationalbank could fulfil its encashment obligation at any time. The metal standard, at that time silver, entailed that the issue of notes had to be adapted to holdings of metal. If silver flowed out of the country as a consequence of an external deficit, the note circulation had to be curtailed, while it could be expanded if silver flowed into the country.
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