Read about the deflationary problems of 18th-19th century:
"The great lesson of the 19th century and the gold standard was that such a limited amount of monetary systems causing continual crises and deflation are tight corset in any development effort
The other big lesson of the 18th and 19th century is that if the radical new entrepreneurial era lacked the narrow corset of gold over his head, then it was much easier to develop above and beyond the norms of ancient corruption (ie the church and the aristocracy). As the currency was literally rare and one gold sovereign not ever saw before you, all investments should be made through the already payers and / or privileges. And so the new entrepreneurship acquired kinship ties with the old privileges and companies took the form of the East India Company, a construct that is that no relationship was with the current concept of business.
In short as the amount of players and the amount of goods are not fixed in an economy, a stable currency would function as either corset (when the economy was growing up), or as loose pants (when the economy was shrinking). And even more impressive is that the fixed amount of currency itself would be that would cause the economy shrink as deflation would make each transaction completely undesirable. Let us not forget the great problem of the 19th century. There were so few shoes and so many barefoot people. When someone was making a shoe factory to footwear these people, the more he made shoes, so dropped the "price" of the shoe as a result end up bankrupt with shoes in the store at the same time when the world was still barefoot."
see more:
http://www.techiechan.com/
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