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With the exception of the above-mentioned per capita coinage restriction, the LMU had no uniform money supply policies or management. The amount of money in circulation was determined by the markets. Even at its apex, the LMU was unable to move the world prices of these metals. The Union had to suspend silver convertibility and thus accept a humiliating de facto gold standard.
The LMU was considered sufficiently serious to be able to flirt with Austria and Spain when its Foundation Treaty was officially signed in 1865 in Paris. This despite the fact that its French-inspired rules seemed often to sacrifice the economic to the politically expedient, or to the grandiose. This is similar to the use of the US dollar or the euro in many countries today.
Silver coins and tokens remained legal tender, though. The unprecedented financing needs of the Union members a result of the First World War delivered the coup de grace. The LMU was officially dismantled in 1926 but expired long before that. The LMU had a common currency but this did not guarantee its survival.
It was dreamt up by the French, obsessed, as usual, by their declining geopolitical fortunes and monetary prowess. Belgium already adopted the French franc when it became independent in 1830. The LMU was a natural extension of this franc zone and, as the two teamed up with Switzerland in 1848, they encouraged others to join them. Italy followed suit in 1861.
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