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Economic historians have established a new orthodoxy attributing the onset and severity of the Great Depression to the flawed working of the internationnal gold standard. This interpretation returns French gold policy to centre stage in understanding the origins of the Depression, its rapid spread, its severity, and its duration. Until now, French gold policy has not received detailed attention. The Gold Standard Illusion exploits new archival resources to explain gold policy and belief in France, the country most often criticized for hoarding gold and failing to play by the 'rules' of the gold standard game. The study follows four lines of enquiry. It provides a history of French gold policy in its national and international contexts from 1914 to 1939. It analyses the evolution of the Bank of France and the ways in which gold standard belief retarded the adlption of modern central banking practice. It re-examines interwar central bank cooperation and how it contributed to the breakdown of the gold standard, and it observes how gold standard rhetoric forstered misperceptions of financial and monetary problems.
The French case was exceptional, marked by absolute and tenacious faith in the gold standard, by the accumulation of a vast hoard of gold desperately needed as reserves to prevent monetary contraction abroad, and by adamant claims for the need to return to gold after 1931, when the gold standard had become, in the owrds of John Maynard Akeynes, 'a curse laid upon the economic life of the world.' The Gold Standard Illusion explains interwar gold policy in France and reassesses the gold standard interpretation of the Great Depression in the light of French experience.
Kenneth Mouré is Professor of History at the University of California at Santa Barbara, where he has taught since 1989.
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