In the “Uster Memorial” document, an interest rate of 4% was considered to be appropriate; 1 well, as you know, Swiss interest rates have been considerably below this level for the past few years – so, in this respect, the SNB has fulfilled the requirements set out in Uster in 1830. A short journey through monetary history I would now like to take you on a short trip through Swiss monetary history. We will start our journey in the year 1830, and will make stop-offs at sixty-year intervals, i.e. in 1890 and 1950, before returning to the present day. Let us assume you wanted to buy a loaf of bread in the year of the Ustertag. What money would you have used to pay for it here in Uster? My question may appear simple, but the answer is anything but easy. That is because the year 1830 falls within the long multiple coinage – or multiple currency – period. In other  1  Carl Dändliker: Der Ustertag und die politische Bewegung der Dreissiger Jahre im Canton Zürich (nebst Abdruck des “Uster-Memorials” als Beilage). Zur 50-jährigen Erinnerung, Zurich 1881, p. 6 of enclosure. BIS central bankers’ speeches  1  words, the currencies being used in the canton of Zurich in 1830 included guilders, batzen, shillings, thalers, hellers and angsters, just to name a few. 2 Over 300 different kinds of coins were in circulation in Switzerland, with thousands of different embossed images.
Nevertheless, we should also be aware that the monetary order is the result of a historic development. Since we are not starting from scratch, even well-meaning suggestions for improvement – ones that might in theory appear totally justified – may have grave unintended consequences in the real world. I will use four radical reform proposals to illustrate what I actually mean by this. The proposals in question are, first, private money instead of state money, second, a return to the gold standard, third, the introduction of plain money and, fourth, the adoption of foreign money. Private money instead of state money What would it be like if we could pay with varying currencies offered by private providers, instead of with state currencies? At first glance this idea seems quite appealing. After all, competition between different providers of goods and services is a major principle underlying our economic order. We owe much of our progress and, with it, our prosperity to this factor. Why should we make an exception when it comes to the currency, or to money? When talking about monetary competition, I would like to begin by putting our banknote monopoly into perspective. Since freedom of contract prevails in our country, you are at liberty to agree a currency other than the Swiss franc with your business partner. You may purchase your loaf of bread using euros, US dollars, gold, WIR money or even one of the new virtual currencies such as bitcoins, 8 if the baker is willing to accept them.