Money, Banks and Finance in Economic Thought

The 1930s: When French economists wondered about the reasons for their commitment to the gold standard

Francis Clave, Paris II

This article will be mainly based on the Congress of French-speaking economists Proceedings. These writings provide an account of the debates held by a number of Belgian, French and Swiss economists participating in the Congress. We will focus only on the discussions regarding the gold standard issue during the 1933-1939 period. 1933 is important in two respects: The Proceedings were first published in 1933 and a temporary decline of the US dollar against the gold standard occurred that same year. The 1935 Congress was the focus of particular attention. Indeed, a few days before the Belgians devalued, the Finance Minister, Louis Germain-Martin (1872-1948), an economics professor, intervened in Congress to try, it seems, to convince them to resist this temptation. The Belgians remained firm and began to question the French about the deeper reasons for their attachment to the gold standard. The analysis of the French responses will stand at the heart of the article. For the majority of French economists at the time, economics seemed to be based on natural laws, where gold – “naturally” as it were – held a key role. On this point, they clearly understood the new banking practices were stretching the relationship between gold and currency, which raised questions without disturbing their conviction. The other important factor was the affirmation of France’s role. For them, the gold standard was a means of refusing the primacy of the pound sterling and replacing it with that of the gold standard. Jean Lescure, (1882-1947) one of the congresses organizers, thought the debates on the 1935 gold standard also contributed to the then emerging European idea. Finally, and this will be the last point, the public finance legal professors present at the congress saw the gold standard as an element of the immutability of contracts. Another topic will focus our attention. By adopting a doctrinaire approach (which the Belgians reproached them for), did French economists not deprive themselves of a positive political influence? In short, was the gold standard suited to the economic and political reality in those days? In this regard, Germain-Martin reported that Neville Chamberlain (1869-1940) told him at a ministerial meeting that supporting the gold standard required he had “an outstanding imagination”. That formulation was a way of underlining the project’s unrealistic approach.


Keywords: Gold standard, Economists, France, Belgique

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