The Young Plan tried to settle Germany’s World War I reparations and created the Bank for International Settlements (BIS) to manage transfers. This mattered because reparations and debt payments were tightly linked to international finance—and to later crisis diplomacy. The BIS became a key institution in the negotiations that followed the Great Depression’s shocks.
U.S. President Herbert Hoover proposed postponing intergovernmental payments for one year, including reparations and war debts. The moratorium was meant to reduce immediate pressure on European finances and give governments time to stabilize. It also showed that debt and reparations could not be separated from the wider Depression crisis.
Delegations met in Lausanne to liquidate (bring to an end) the reparations system, arguing that the Depression made continued payments unrealistic. An agreement reached on July 9, 1932, was never ratified, but it effectively ended attempts to collect reparations under the old framework. The reparations issue had been a major obstacle to international monetary cooperation.
As the world economy deteriorated, governments increasingly looked to international meetings to address trade barriers, currency instability, and debt. In Britain, parliamentary debates captured the sense that failure at an upcoming world economic conference could worsen an “economic war” of tariffs and restrictions. This set the political stage for a major London conference intended to coordinate recovery policies.
President Franklin D. Roosevelt signed Executive Order 6102, requiring most Americans to deliver gold coin, bullion, and gold certificates above a threshold to the Federal Reserve. The policy aimed to stop hoarding and strengthen the government’s ability to manage money and credit during the banking crisis. These domestic moves soon collided with international pressure for currency stabilization.
In April 1933, Roosevelt halted U.S. gold exports, a step toward leaving strict gold-standard rules. This signaled that the United States prioritized domestic recovery—especially higher prices and easier credit—over fixing exchange rates. The decision complicated planning for the London conference, where many countries wanted currency stabilization.
Representatives of 66 governments gathered in London to fight the Great Depression by reviving trade, addressing debts, and stabilizing exchange rates. The meeting was formally sponsored by the League of Nations and took place at the Geological Museum in South Kensington. It was one of the most ambitious attempts at global economic coordination in the interwar period.
Alongside the main conference, U.S., British, and French officials explored a temporary plan to stabilize key exchange rates. These discussions reflected a core tension: some governments believed stable currencies were necessary to restore trade, while others wanted freedom to devalue or reflate (raise prices) at home. The difficulty of reconciling those goals shaped the conference’s fate.
In early July 1933, Roosevelt sent a message rejecting the idea that stabilizing exchange rates should come before domestic recovery measures. His stance undercut negotiations that many delegates saw as central to rebuilding confidence in international trade and finance. The break highlighted a shift toward national economic strategies rather than coordinated international rules.
After more than six weeks, the conference ended without achieving its main goals on currency stabilization or broad trade liberalization. The failure reinforced the pattern of fragmented policies: exchange controls, competing devaluations, and trade discrimination. In the short term, the world economy moved further away from a single shared monetary framework.
The Reciprocal Trade Agreements Act gave the U.S. president authority to negotiate bilateral tariff reductions without seeking separate approval for each deal. This marked a practical pivot after the London conference: instead of a single multilateral trade bargain, the United States pursued step-by-step agreements. The act became an important building block for later U.S. leadership in trade negotiations.
In September 1936, the United States, Britain, and France reached an informal understanding to avoid competitive currency depreciation and to cooperate on exchange stability. While it was not a full return to the pre-Depression gold standard, it reduced uncertainty among major currencies. In this sense, it served as a late, limited successor to the monetary cooperation the London conference had failed to secure.
International Monetary Negotiations and the London Economic Conference (1930–1934)