Legislation in the United Kingdom restricting the ability of the
Bank of England from exchanging
sterling notes for
gold. At the time, the Bank of England was obligated to exchange the one
pound sterling for one pound of gold on demand. However, the Napoleonic wars necessitated Parliament to order the
printing of
money to
finance military operations. By 1814, 28.4 million pound notes were printed, but the Bank of England only held 2.2 million pounds in gold. This resulted in a 30%
depreciation for the sterling. See also:
Gold standard.