4 Pence – United Kingdom

In 1888, the United Kingdom operated under the classical gold standard, a system it had effectively pioneered and which underpinned its global financial dominance. The pound sterling was legally defined as a specific weight of gold (approximately 7.3 grams), and Bank of England notes were freely convertible into gold coin upon demand. This convertibility created immense confidence in sterling, making it the world's premier reserve and trading currency. The system was largely automatic: international trade imbalances were settled in gold, influencing domestic money supply and price levels, which in turn were supposed to self-correct the imbalances.

Domestically, the currency in circulation was a mix of gold sovereigns and half-sovereigns, Bank of England notes (primarily for larger transactions), and, significantly, a vast array of private banknotes issued by commercial banks in England, Wales, Scotland, and Ireland under various regulations. While the Bank of England had a monopoly on note issuance in England and Wales from 1844, many older private banks retained issuing rights, and Scottish and Irish banks issued their own distinctive notes, all backed by and convertible into gold. This created a complex but generally stable monetary landscape centred on the gold anchor.

The period was one of remarkable monetary stability, with the value of the pound fixed in terms of gold and thus stable against other gold-backed currencies. However, this stability came with trade-offs, as the Bank of England's primary duty was to maintain gold reserves, often prioritising this over domestic economic concerns like unemployment. The system faced occasional strains, but in 1888, it was at its zenith, symbolising British economic power and providing a predictable environment for the vast international trade and investment flows of the British Empire. The debates that would later challenge the gold standard's rigidity were, at this time, largely confined to academic and fringe political circles.