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Geological Museum building, London The London Monetary and Economic Conference of 1933, also known as the London Economic Conference, was a meeting of representatives of 66 nations from June 12 to July 27, 1933, at the
Geological Museum The Geological Museum (originally the Museum of Economic Geology then the Museum of Practical Geology) was a museum of geology in London. It started in 1835, making it one of the oldest public single science collections in the world. It transfe ...
in
London London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
. Its purpose was to win agreement on measures to fight the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
, revive international trade, and stabilize
currency A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a ''system of money'' in common use within a specific envi ...
exchange rates In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
. It collapsed after it was "torpedoed" by US President
Franklin D. Roosevelt Franklin Delano Roosevelt (January 30, 1882April 12, 1945), also known as FDR, was the 32nd president of the United States, serving from 1933 until his death in 1945. He is the longest-serving U.S. president, and the only one to have served ...
in early July when he denounced currency stabilization.


Background

When the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
devastated the world economy from 1929 to 1932, it was generally assumed that the United States would serve as a
hegemon Hegemony (, , ) is the political, economic, and military predominance of one state over other states, either regional or global. In Ancient Greece (ca. 8th BC – AD 6th c.), hegemony denoted the politico-military dominance of the ''hegemon'' ...
, providing leadership for a program to bring about recovery. US President
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 ...
in 1931 called for a conference to decide how to reduce tariffs and also revive prices by reversing the deflation associated with the Depression. The agenda for the Conference was drafted by representatives of six major nations who met in Geneva in 1932. The agenda asserted that intergovernmental debts should be settled, as they represented a major obstacle on the road to recovery. The Europeans believed that "the settlement should relieve the world" of the crushing debt burdens. However, most of these debts were owed to the US, which was reluctant to write them off. US Senator William Edgar Borah held that "the troubles of the world were really due to the War, and to the persistence of Europe in keeping great armaments, and to the mismanagement of money" and so he was not willing to postpone, reduce, or cancel the payment of debts "and have Europe go ahead with a programme which has practically sunk the world into its present economic condition." Other events indicated that the US would not support the Conference agenda as outlined. Roosevelt declared during his inaugural speech, "I shall spare no effort to restore world trade by international economic readjustment, but the emergency at home cannot wait on that accomplishment." That was a clear signal to those in the Conference that Roosevelt would carry out his program to revive the American economy regardless of or even against international plans to revive the world economy. Roosevelt took the US off 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 ...
in April. In May, the Thomas Amendment to the Agricultural Adjustment Act "required the President to pursue a policy of inflation through the issue of paper money."


Conference

The World Economic Conference of June 1933 was held in the new
Geological Museum The Geological Museum (originally the Museum of Economic Geology then the Museum of Practical Geology) was a museum of geology in London. It started in 1835, making it one of the oldest public single science collections in the world. It transfe ...
building in London, which had just been completed and in which the museum collection had not yet been installed. Like the Geneva World Economic Conference (1927), it was formally sponsored by the
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 ...
, but its idea had originated outside of the League framework at the
Lausanne Conference of 1932 The Lausanne Conference of 1932, held from 16 June to 9 July 1932 in Lausanne, Switzerland, was a meeting of representatives from the United Kingdom, France, Italy, Belgium, Japan and Germany that resulted in an agreement to lower Germany's World ...
. Staff of the League's Economic and Financial Organization (EFO) had severe misgivings about the initiative, as they correctly anticipated it might end in disaster. In the event, it crystallized the impossibility of taking forward the orthodox agenda of the
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 ...
,
Genoa Genoa ( ; ; ) is a city in and the capital of the Italian region of Liguria, and the sixth-largest city in Italy. As of 2025, 563,947 people live within the city's administrative limits. While its metropolitan city has 818,651 inhabitan ...
and Geneva conferences under the new financial and political circumstances following the
European banking crisis of 1931 The European banking crisis of 1931 was a major episode of financial instability that peaked with the collapse of several major banks in Austria and Germany, including Creditanstalt on , Landesbank der Rheinprovinz on , and Danat-Bank on . It ...
and the takeover of Germany by the
Nazi Party The Nazi Party, officially the National Socialist German Workers' Party ( or NSDAP), was a far-right politics, far-right political party in Germany active between 1920 and 1945 that created and supported the ideology of Nazism. Its precursor ...
. The conference program piously invoked the aim of free international movement of "goods, services, and capital" but gave no mandate to the EFO or any other institution to enforce it, a situation which contributed to Roosevelt's intervention against "the fetishes of so-called international bankers".


Roosevelt's intervention

When the conference opened on June 12, 1933, all attention rested on the tripartite currency discussions happening outside it. The big issue was the exchange rate of the US dollar against foreign currencies, such as the British pound and French franc. Many in the US favored devaluation of the dollar to improve the US trade position. France and Britain wanted to stabilize the dollar rate by fixing it at a relatively-high value. US Secretary of State
Cordell Hull Cordell Hull (October 2, 1871July 23, 1955) was an American politician from Tennessee and the longest-serving U.S. Secretary of State, holding the position for 11 years (1933–1944) in the administration of President Franklin Delano Roosevel ...
led the American delegation to the conference. Roosevelt ordered Hull not to enter into any discussions on currency stabilization. However, when the Conference had gathered, Roosevelt changed his mind by supporting
currency manipulation Currency intervention, also known as foreign exchange market intervention or currency manipulation, is a monetary policy operation. It occurs when a government or central bank buys or sells foreign currency in exchange for its own domestic cur ...
to raise prices and having American banking experts
Oliver Mitchell Wentworth Sprague Oliver Mitchell Wentworth Sprague ( – ) was an American economist and president of the American Economic Association in 1937. His research focused on fiscal policy and central banking. Early life and education Sprague was born to William Wa ...
and James Paul Warburg conduct currency stabilization talks with their British and French counterparts. By June 15, Sprague, Warburg,
Montagu Norman Montagu Collet Norman, 1st Baron Norman DSO PC (6 September 1871 – 4 February 1950) was an English banker, best known for his role as the Governor of the Bank of England from 1920 to 1944. Norman led the bank during the toughest period in ...
of the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the Kingdom of England, English Government's banker and debt manager, and still one ...
, and
Clement Moret Clement or Clément may refer to: People * Clement (name), a given name and surname * Saint Clement (disambiguation)#People Places * Clément, French Guiana, a town * Clement, Missouri, U.S. * Clement Township, Michigan, U.S. * Clement's ...
of the
Bank of France The Bank of France ( ) is the national central bank for France within the Eurosystem. It was the French central bank between 1800 and 1998, issuing the French franc. It does not translate its name to English, and thus calls itself ''Banque de F ...
had drafted a plan for temporary stabilization. Word of the plan leaked out. The reaction in the US was negative, the dollar rose against foreign currencies, threatening US exports, and stock and commodity markets were depressed. Although Roosevelt was considering shifting his policy to a new median dollar-pound rate, he eventually decided not to enter into any commitment, even a tentative one. On June 17, fearing the British and the French would seek to control their own exchange rates, Roosevelt rejected the agreement in spite of his negotiators' pleas that the plan was only a temporary device, which was full of escape clauses. On June 30, Roosevelt went further. In an interview with four reporters, he openly criticized stabilization. On July 3, he issued a message to the conference that condemned its efforts at stabilization when "broader problems" existed and asserted that the exchange rate of a nation's currency was less important than other economic values. Roosevelt's rejection of the agreement gathered an overwhelmingly-negative response from British, French, and US internationalists. British Prime Minister
Ramsay MacDonald James Ramsay MacDonald (; 12 October 18669 November 1937) was a British statesman and politician who served as Prime Minister of the United Kingdom. The first two of his governments belonged to the Labour Party (UK), Labour Party, where he led ...
feared that "Roosevelt's actions would destroy the Conference" and Georges Bonnet, rapporteur of the French Monetary Commission, is said to have "exploded." Critics see
nationalism Nationalism is an idea or movement that holds that the nation should be congruent with the state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation, Smith, Anthony. ''Nationalism: Theory, I ...
as a key factor in Roosevelt's decision. However, the British economist
John Maynard Keynes John Maynard Keynes, 1st Baron Keynes ( ; 5 June 1883 – 21 April 1946), was an English economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originall ...
hailed Roosevelt's decision as "magnificently right" and the US economist
Irving Fisher Irving Fisher (February 27, 1867 – April 29, 1947) was an American economist, statistician, inventor, eugenicist and progressive social campaigner. He was one of the earliest American neoclassical economists, though his later work on debt de ...
wrote to Roosevelt that the message "makes me the happiest of men."


Hugenberg controversy

Another area of dispute was created by the head of the German delegation, Economics Minister,
Alfred Hugenberg Alfred Ernst Christian Alexander Hugenberg (19 June 1865 – 12 March 1951) was an influential German businessman and politician. An important figure in nationalist politics in Germany during the first three decades of the twentieth century, ...
, who put forth a program of German colonial expansion in both
Africa Africa is the world's second-largest and second-most populous continent after Asia. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 20% of Earth's land area and 6% of its total surfac ...
and
Eastern Europe Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
as the best way of ending the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
, which created a major storm at the conference. For being indiscreet enough to advance the claim to Germany's ''
Lebensraum (, ) is a German concept of expansionism and Völkisch movement, ''Völkisch'' nationalism, the philosophy and policies of which were common to German politics from the 1890s to the 1940s. First popularized around 1901, '' lso in:' beca ...
'' (living space) while Germany was still more or less disarmed, Hugenberg was sacked from the German cabinet by
Adolf Hitler Adolf Hitler (20 April 1889 – 30 April 1945) was an Austrian-born German politician who was the dictator of Nazi Germany from 1933 until Death of Adolf Hitler, his suicide in 1945. Adolf Hitler's rise to power, He rose to power as the lea ...
.Hildebrand, Klaus ''The Foreign Policy of the Third Reich'' London: Batsford 1973, pp. 31-32.


See also

* International Monetary and Economic Conferences


References

{{reflist


External links


Online Time Magazine article from Monday, Jun. 19, 1933
*
H. G. Wells Herbert George Wells (21 September 1866 – 13 August 1946) was an English writer, prolific in many genres. He wrote more than fifty novels and dozens of short stories. His non-fiction output included works of social commentary, politics, hist ...
in his 1933 boo
''The Shape of Things to Come''
gives a detailed description of the conference, making fun of the various participants' ineptness and incompetence but also expressing the writer's poignant disappointment with their failure and its likely dire consequences. This is expressed in the title given by Wells to the relevant chapter: "''The London Conference: the Crowning Failure of the Old Governments; The Spread of Dictatorships and Fascisms''".
Wireless to the London Conference
Franklin D. Roosevelt's message to the Conference 1933 conferences 1933 in London 1933 in economic history 1933 in international relations 20th-century diplomatic conferences Diplomatic conferences in the United Kingdom Financial crises 1933 in the United Kingdom June 1933 in the United Kingdom July 1933 in the United Kingdom Global economic conferences