The World Monetary and Economic Conference met in London, England, from mid June to late July 1933, to formulate cooperative economic policies to alleviate the global Great Depression. Sixty-six nations convened in London to discuss an international GOLD standard, currency stability, tariff reductions, and other international economic agreements that were thought to be potential solutions to the economic crisis. The London Economic Conference proved unsuccessful largely because of U. S. president Franklin D. Roosevelt and his preference for domestic rather than international action to deal with the depression.
The U. S. delegation to London was headed by Secretary of State Cordell Hull, a staunch advocate of international economic cooperation who believed that he was sent to London to seek cooperation among nations and to negotiate a currency stabilization agreement. However, FDR had stated in his inaugural address that international economic commitments were secondary to the national economy, a belief that such members of his
Brain Trust as Raymond Moley and Rexeord G. TuGWELL shared. In the weeks leading up to the London conference, FDR’s initial support of currency stabilization waned due to his fear that a stabilization agreement would thwart efforts to raise domestic prices, which he thought key to recovery. Hull had also been promised by FDR that he would ask Congress for the authority to pursue reciprocal tariff agreements. Hull believed that such a proposal would reveal the U. S. commitment to ending the high tariffs in effect since the passage of the Hawley-Smoot Tariee Act of 1930. On the eve of the conference, Roosevelt went back on his promise to Hull to seek a reciprocal trade bill.
In London, Moley, with Roosevelt’s approval, issued a statement approving currency stabilization by the United States, Britain, and other gold-bloc countries. Then on July 1, FDR cabled Moley objecting to any premature currency stabilization agreement that would hinder his New Deal agenda. On July 3, Roosevelt delivered what was called his “bombshell message” that the United States would not join in rate stabilization or a return to the gold standard. He declared that “old fetishes of so-called international bankers are being replaced by efforts to plan national currencies,” and that “the sound internal economic system of a nation is a greater factor in its well being than the price of its currency in changing terms of the currencies of other nations.” The United States would pursue a national, not an international, approach to solving its economic woes. Although this nationalistic approach was based on Moley’s own ideas, Moley was surprised and embarrassed by this sudden reversal in Roosevelt’s agenda, and resigned soon after as assistant secretary of state.
At the conference, Hull struggled to keep the other participating nations from denouncing Roosevelt and the United States for preventing a meaningful approach to the staggering international economy. Subsequently, the Roosevelt administration succeeded in enacting the Reciprocal Trade Agreements Act of 1934 that aimed at increasing foreign trade by decreasing high tariff rates and concluded an exchange stabilization agreement with Britain and France in 1936. Nonetheless, Roosevelt’s action in July 1933 not only torpedoed the London conference but also contributed to the lack of common cause among the western democracies as World War II approached during the 1930s.
See also eoreign policy.
Further reading: Robert Dallek, Franklin D. Roosevelt and American Foreign Policy, 1932-1945 (New York: Oxford University Press, 1979); Lloyd Gardner, Economic Aspects of New Deal Diplomacy (Madison: University of Wisconsin Press, 1964).
—Michael T. Walsh
World History
