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<p>[QUOTE=&quot;johnmilton, post: 8334310, member: 101855&quot;]Wartime inflation was not the only problem. Before the war, the mint, which was located in the Tower of London, was almost 1,000 years old, and woefully antiquated. The facility could not produce enough coins to run the economy. </p><p><br /></p><p>The government also followed the “commodity theory of money” policy. In other words, the coins melted for their face value. As soon as silver bullion rose in value, the coins were, withdrawn from circulation. </p><p><br /></p><p>The solution was to circulate coins that were “token pieces” that melted for a good deal less than their fact value. This reform worked for a century, until after World War I, when the British had to reduce the purity of their coins to 50% silver.[/QUOTE]</p><p><br /></p>

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