Historical Sketch

In 1581, the seven northern provinces of the Spanish (Habsburg) Netherlands declared their independence and formed the United Netherlands, which was not recognized by Spain until the Peace of Westphalia in 1648. Although constituted as a federal parliamentary republic the initially more administrative office of stadtholder developed into a factual head of state. In the 18th century, the office became hereditary and thereby quasi-monarchical. In 1795, Napoleonic France conquered the neighboring Netherlands and established a centralized government. The initial Batavian Republic was followed by the Kingdom of Holland with Napoleon’s brother on the throne until, in 1810 finally, the state was dissolved and annexed by France. Three years later already, after Napoleon’s defeat at the battle of Leipzig, France had to withdraw again, giving way for the Sovereign Principality of the Netherlands under the rule of the last stadholder. The 1815 Vienna Congress confirmed independence and elevated the country to a kingdom. The southern parts of the former Habsburg territories were added but seceded again as Kingdom of Belgium in 1830. During World War I, the Netherlands remained neutral but during World War II, they were occupied by Germany.

Monetary History Overview

In 1694, the General States established a common silver standard for the Seven Provinces of the United Netherlands, creating the Netherlands Guilder. The earlier golden Ducat and silver Thaler (Rijksdaalder) continued to be produced for international trade mainly. The Napoleonic conquest intreoduced bimetallism to the Dutch monetary system, the 1806 currency decree included the issuance of gold coins. The newly created Kingdom of the Netherlands kept the standard in the 1816 law until a currency crisis forced the return to the silver standard in 1847. The circulating gold coins were first traded at bullion, then got withdrawn in 1853. Also in 1847, the government began issuing paper money, and in 1864, a commercial bank was mandated the central bank role. The issuance of banknotes, however, did start only 40 years later. In 1875, the Netherlands followed the development in the rest of Europe and switched from silver to the gold standard, which secured monetary stability up to the outbreak of the First World War. In 1914, the gold peg was suspended, and the post-war economic crisis lasted until the mid-1920s. In 1925, the Guilder was restored to the former gold parity and remained stable also during the German occupation in World War II. The Guilder was attached to the Reichsmark in 1940, however without a firm peg. After the liberation, economic stabilisation was quickly achieved, and in the Anglo-Dutch Agreement of 1944 the Guilder got pegged to the Pound Sterling. It followed the 1949 devaluation of the Sterling but repegged to the US Dollar afterwards. The Guilder then followed the development of the German Mark, including the appreciation in March 1961. This remained unchanged until the floating of the Dollar in 1971, when the Dutch currency was floated and joined the European currency system. The Netherlands is a founding member of the European Monetary Union and have introduced the European Euro in 1999. The Dutch banknotes and coins were withdrawn in 2002.

The Netherlands joined the International Monetary Fund (IMF) on 27.12.1945 as a founding member.

Currency Units Timeline

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Monetary History Sources