England did not adopt the gold standard until she was in a position to
become the principal creditor nation. When her forges, furnaces,
spindles, and looms were ready to supply manufactured goods to all the
world, she saw that all countries and peoples would be compelled to pour
their treasures into her lap. Her insular position and great navy
guarantied her against external assault. Released from the anxieties and
labors incident to the Napoleonic wars, with a sturdy population of
trained mechanics, and with fields of coal and iron in abundance, she
was well adapted to become the "workshop of the world." With colonial
possessions in every sea, and with Continental Europe in ceaseless
unrest, England could rely on customers who could themselves produce
nothing but raw material and would be obliged to buy her finished
products.
The field of industry had been recently broadened by basic inventions of
unparalleled importance--the steam-engine, the power loom, the
spinning-jenny, and a multiplicity of other devices that increased a
hundred fold the efficiency of artisan labor. England knew that her
trade would in the main be a foreign trade and her financial dealings
largely with foreign governments. She knew that from the people of the
continent, impoverished by years of struggle for existence against the
attacks of Napoleon, she could not expect immediate payments in cash, or
in commodities. Time bonds and other deferred obligations were the media
in which for the most part she received pay, she made interest and
principal payable in gold alone, and if before the date of payment the
value of money should increase it would not be to the disadvantage of
the creditor. Whatever we may think of the _ethics_ of this policy, we
can have no difficulty in understanding its _motive_.