It was June 12th: The London Economic and Monetary Conference

On June 12, 1933, representatives from 66 countries met in London hoping to extricate the world economy from the impasse created by the 1929 stock market crash. Mass unemployment, the collapse of international trade, and monetary instability: four years after the start of the Great Depression, governments were seeking a collective response to a crisis that had become global. Behind the stated ambition to restore prosperity, however, lay a profound divergence among the major powers on how to rebuild the international economic system.

The impossibility of returning to the pre-crisis monetary order

Since the abandonment of the gold standard by the United Kingdom in September 1931, followed by the United States in the spring of 1933, the monetary order inherited from the 19th century has been faltering. Currencies fluctuate, customs barriers multiply, and each country tries to protect its own economy.

In London, France defended an orthodox line. Prime Minister Édouard Daladier and his minister Georges Bonnet advocated a rapid return to stable, gold-backed currencies and a policy of fiscal austerity aimed at restoring confidence. Paris even managed to rally several European countries—notably Belgium, the Netherlands, Switzerland, Italy, Poland, Czechoslovakia, and Luxembourg—in what became known as the "gold bloc."

In contrast, the United States was now following the opposite logic. Having come to power a few months earlier, Franklin D. Roosevelt believed that economic recovery depended first and foremost on national stimulus policies and greater monetary freedom. Washington refused to fix the dollar as long as the American economy remained depressed.

The failure of the last great international hope

For several weeks, committees and subcommittees attempted to bridge the gap between the opposing positions. Discussions covered currency stabilization, reducing trade barriers, financial transfers, and the coordination of economic policies. But no common ground emerged.

The turning point came in early July when a message from President Roosevelt, transmitted to London by Secretary of State Cordell Hull, clearly rejected any immediate agreement on stabilizing exchange rates. For the Americans, fixing currencies without a prior economic recovery would be tantamount to repeating the mistakes that had exacerbated the crisis.

Deprived of US support, the conference lost all real significance. On July 27, 1933, it ended without any major agreement.

The world is entering an era of devaluations.

The failure of London marked the end of illusions of a coordinated global economic recovery. States now pursued national strategies: currency devaluations, protectionism, and stimulus or austerity policies, depending on the circumstances.

The countries of the gold bloc, unable to devalue their currencies, sought to maintain their competitiveness by reducing internal costs. In France, this approach would lead a few years later to the policy known as "Laval deflation." Conversely, the United Kingdom and then the United States gradually returned to growth thanks to more flexible currencies.

It wasn't until 1944 and the Bretton Woods Conference that a new international monetary order emerged. The 1933 London Conference remains the last—and ultimately unsuccessful—attempt to save the pre-Great Depression economic system.