Latin Monetary Union

Latin Monetary Union was a monetary union formed in 1865 by France, Belgium, Italy and Switzerland and later (1875) joined by Greece. While not members, Spain (1868), Rumania (1868), Bulgaria (1893), Serbia and Venezuela (1891) conformed with the policies of the Union.

After the gold discoveries in California and Australia in the mid-nineteenth century, the relative value of gold fell, resulting in the disappearance of silver coins. (See "Gresham's law") The Union was formed to meet this situation. It attempted to preserve the French bimetallic ratio of 15 1/2 ounces of silver to one of gold by providing for standard silver coins corresponding to the French five franc piece and gold coins for all higher denominations. A few years later, the relative value of silver began to fall and huge quantities of silver were presented for mintage while gold coins were disappearing. This led the Union to set quotas for the further coinage of the standard silver coins and later (1878) to suspend their coinage altogether. For all practical purposes, this placed the Union countries on the gold standard.