The situation had arisen partly because of the British economic crisis, whose shadow blanketed the entire English-speaking world.
On the other hand, global trade had continued to expand, driving a sustained increase in demand for currency. The Austrian Empire and its allies had made a considerable contribution to this.
At its root, it was still a matter of economic development and currency. The existing financial system could no longer support an economy on this scale.
Every country was seeking to fill the gap with paper currency, and many had tried. Naturally, every attempt had ended in utter defeat.
First of all, anti-counterfeiting technology was a major problem. So long as the cost of producing counterfeit notes was lower than their face value, counterfeiters had a profit to make.
In this era, it was not only private groups that engaged in counterfeiting. Sometimes, even states themselves entered the fray to make money.
On the other hand, financial laws at the time were incomplete. A bank issuing paper notes was tantamount to handing others a financial weapon with which to stage a run on itself—and this method was perfectly legal.
The merchants carrying out these legal bank runs would even publish notices in newspapers claiming that such-and-such a bank had gone bankrupt from overissuing paper currency.
Thus, most well-run banks were unwilling to wade into such muddy waters. So why had history seen so many waves of bank runs caused by overissuance?
The answer was simple: the heart of man was never satisfied, like a snake trying to swallow an elephant. Many banks chose to overissue excessively.
In 1848, the Austrian Empire's ambitious currency reform had ultimately been forced into a hasty end because banks recklessly issued paper notes.
Moreover, paper currency was extraordinarily inconvenient to use at this time. Its poor