Brussels Conference (1920)
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The International Financial Conference was an international economic conference held in
Brussels Brussels, officially the Brussels-Capital Region, (All text and all but one graphic show the English name as Brussels-Capital Region.) is a Communities, regions and language areas of Belgium#Regions, region of Belgium comprising #Municipalit ...
from September 25 to October 8, 1920. 86 delegates, representing 39 states, were present at the conference. Most delegates were bankers or treasury officials.


Background

The Brussels conference was convened in the context of severe economic, social, financial and sanitary dislocation immediately following
World War I World War I or the First World War (28 July 1914 – 11 November 1918), also known as the Great War, was a World war, global conflict between two coalitions: the Allies of World War I, Allies (or Entente) and the Central Powers. Fighting to ...
, especially in
Central and Eastern Europe Central and Eastern Europe is a geopolitical term encompassing the countries in Baltic region, Northeast Europe (primarily the Baltic states, Baltics), Central Europe (primarily the Visegrád Group), Eastern Europe, and Southeast Europe (primaril ...
. Its trigger was an international petition published in January 1920 and signed by prominent individuals that included Gustave Ador,
Gustav Cassel Karl Gustav Cassel (20 October 1866 – 14 January 1945) was a Swedish economist and professor of economics at Stockholm University. Cassel was among the most prominent economists in the world in the interwar period. He made contributions to the ...
, Robert Cecil,
Herbert Hoover Herbert Clark Hoover (August 10, 1874 – October 20, 1964) was the 31st president of the United States, serving from 1929 to 1933. A wealthy mining engineer before his presidency, Hoover led the wartime Commission for Relief in Belgium and ...
, J. P. Morgan Jr., Richard Vassar Vassar-Smith,
Gerard Vissering Gerard Vissering (1 March 1865 – 19 December 1937) was a Dutch banker. Gerard Vissering was born in Leiden, Netherlands. He was the son of finance minister Simon Vissering (1818-1888) and Grietje Corver (1825-1898). After graduating from scho ...
,
Paul Warburg Paul Moritz Warburg (August 10, 1868 – January 24, 1932) was a German-born American investment banker who served as the second vice chairman of the Federal Reserve from 1916 to 1918. Prior to his term as vice chairman, Warburg served as one o ...
, and other signatories from Denmark, France and Norway. Because of the general sense of impending failure, national governments decided that delegates would not officially represent them, so that the governments would not be overly tainted if the conference came to nothing. Even so, nearly three-quarters of the delegates were government officials, the rest being central and private bankers, while the other participants including some non-financial businesspeople and academics.


Conference

Jean Monnet Jean Omer Marie Gabriel Monnet (; 9 November 1888 – 16 March 1979) was a French civil servant, entrepreneur, diplomat, financier, and administrator. An influential supporter of European unity, he is considered one of the founding fathers of t ...
, at the time the deputy secretary-general of the fledgling
League of Nations The League of Nations (LN or LoN; , SdN) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference (1919–1920), Paris Peace ...
, was instrumental in the preparation of the conference. Preparatory technical materials included documents prepared by the staff of the League, including a reference volume on ''Currencies after the War'' and papers on themes such as Coal Statistics, Currency Statistics, Exchange Control, International Trade, or Public Finance. These were complemented by five papers commissioned by League Secretariat official
Walter Layton Walter Thomas Layton, 1st Baron Layton (15 March 1884 – 14 February 1966), was a British economist, editor, newspaper proprietor and Liberal Party (UK), Liberal Party politician. Background and education Layton was the son of Alfred John Lay ...
from some of the most recognized economists of the era, namely Sweden's
Gustav Cassel Karl Gustav Cassel (20 October 1866 – 14 January 1945) was a Swedish economist and professor of economics at Stockholm University. Cassel was among the most prominent economists in the world in the interwar period. He made contributions to the ...
, the United Kingdom's
Arthur Cecil Pigou Arthur Cecil Pigou (; 18 November 1877 – 7 March 1959) was an English economist. As a teacher and builder of the School of Economics at the University of Cambridge, he trained and influenced many Cambridge economists who went on to take chair ...
, the Netherlands' , France's
Charles Gide Charles Gide (; 1847–1932) was a French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France. His nephew was the author Andr ...
, and Italy's
Maffeo Pantaleoni Maffeo Pantaleoni (; 2 July 1857 29 October 1924) was an Italian economist. Born in Frascati, at first he was a notable proponent of neoclassical economics. Later in his life, before and during World War I, he became an ardent Italian nationa ...
. The conference was chaired by former Swiss President Gustave Ador and attended by 86 delegates from 39 countries. The venue for the conference proceedings was the
Palace of the Nation The Palace of the Nation (; ; ) is a neoclassical palace in Brussels, Belgium, housing the Belgian Federal Parliament. The Parliament consists of both the Chamber of Representatives (lower house) and the Senate (upper house), which convene in ...
, relying on a secretariat composed mainly of League staff and housed in the nearby
Academy Palace The Academy Palace or Palace of the Academies ( ; or ) is a Neoclassical architecture, neoclassical palace in Brussels, Belgium. It was originally built between 1823 and 1828 for William II of the Netherlands, Prince William II of Orange. No ...
. Discussions were held simultaneously in French and English.


Assessment

With hindsight, the conference was rather successful at defining a set of general principles for postwar stabilization around shared aspirations to fiscal discipline, free trade, and sound monetary policy led by independent
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
s, a "standard of financial orthodoxy" on which the delegates reached a remarkably broad consensus. A resolution stating that "In countries where there is no central bank of issue, one should be established" was passed unanimously. While the medium-term objectives were clear, the delegates also stated that the return to the
gold standard A gold standard is a backed currency, monetary system in which the standard economics, economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the ...
should only be envisaged after proper financial stabilization and structural adjustment. These principles guided, in particular, the early activity of the League's
Economic and Financial Organization An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...
(EFO) that was being established at the same time. The Brussels Conference has also been recognized as having played a decisive role in the creation of central banks in
Latin America Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
. The conference specifically called for the EFO to prepare a report on how the national governments would implement their recommendations. That report was duly published in 1922 and has been viewed as an early predecessor of surveillance reports issued decades later by the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
.


See also

*
Brussels Conference (1892) The International Monetary Conference of 1892 was the fourth of a series of International Monetary and Economic Conferences, international monetary conferences, held in Brussels in November and December 1892. It was chaired by Belgian Senator Geor ...
* International Monetary and Economic Conferences *
League of Nations The League of Nations (LN or LoN; , SdN) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference (1919–1920), Paris Peace ...
*
International political economy International political economy (IPE) is the study of how politics shapes the global economy and how the global economy shapes politics. A key focus in IPE is on the power of different actors such as nation states, international organizations and ...


Notes

{{reflist
Conference A conference is a meeting, often lasting a few days, which is organized on a particular subject, or to bring together people who have a common interest. Conferences can be used as a form of group decision-making, although discussion, not always d ...
20th-century diplomatic conferences 1920 conferences 1920 in Belgium Diplomatic conferences in Belgium Aftermath of World War I World War I conferences Gold standard September 1920 October 1920 Global economic conferences 1920s in Brussels