GULDEN. The monetary unit of Holland and the Dutch East Indies, variously termed the "Guilder" or, generally, "Florin." It dates from 1875, when Holland adopted the gold standard.
The florin was originally a silver coin, divided into 20 stivers, and until a comparatively modern date, London quoted the Dutch exchange in florins and stivers. Owing to the fall in the value of silver last century, the silver standard was abandoned in 1873, and after two years, the gold standard was adopted. The par of exchange with the pound was formerly Fl.I2.Io7 to the pound, and at par in New York the florin was equivalent to 40.196 cents. Since 1936 the parity is indeterminate.
The florin occupied an unique position during the war, as it was probably the most important of the neutral currencies, and pounds, francs and marks were regularly quoted against it. It thus provided the only test of the relative financial strength of the belligerent nations, and it was in Amsterdam that the weakness of the mark was first revealed. Like other neutral currencies, the florin was affected by the war and the post-war inflation boom, and while for many years after the war it was worth more even than sterling, it failed for a long time to get on terms with the dollar. At the end of 1920, it was quoted at 30.92 cents, it av eraged 33.64 cents in 1921, improved to 39.10 cents in 1923, only to slip back to 38.22 cents in 1924. In 1925, Holland returned to the gold standard, but was affected by the depression of the 193os and the outbreak of war in 1939 which again disrupted all dealings in international exchange.
As regards its internal purchasing power, wholesale prices rose from ioo in 1913 to 376 in 1918, the closing year of the war.
This proved the peak, and by Oct., 1927, the index figure had slipped back to 15o. This was commensurate with British and American index figures, though a little on the high side.
Notes are issued by the Bank and by the Government, as in England, but in Holland the vast majority of notes emanate from the Bank. The amount in circulation at the end of 1927 was F1.81I,000,000, as against F1.313,000,00o in 1913. Until as late as 1923, the note circulation was over F1.I,o98,000,0OO, but it is notorious that during the periods of the collapse of the mark, Germany was to some extent dependent upon neighbouring cur rencies for the proper conduct of her internal trade. It was the collapse of the mark which also accounted for the growth of the Amsterdam money market during the years immediately succeed ing the war. With the stabilization of the mark, Amsterdam de clined in importance as an international financial centre, though in 1927 Holland occupied a more important position in this respect than she did before the World War. Her future position is diffi cult to forecast since 1939. (See CURRENCY.) (N. E. C.; X.)