Gold Bloc

Gold Bloc

 

a group of European countries (France, Belgium, Luxembourg, the Netherlands, Italy, Poland, and Switzerland) that maintained the gold standard and an unchanged parity of currencies during the world economic crisis of 1929–33. In a declaration at the international economic conference in London in 1933, these countries obligated themselves to extend mutual aid to maintain the rate of exchange of their currencies. However, the gold bloc was unable to ensure the stabilization of currencies. The deepening of the foreign exchange crisis led to the dissolution of the bloc. After devaluation of the US dollar (1934) and of the pound sterling, the export of goods became unprofitable for the gold bloc countries; therefore, conditions were created for the outflow of capital abroad. In 1934, Italy strengthened its foreign exchange restrictions. In 1935, Belgium and Luxembourg gave up the gold standard and devalued their currencies. Poland introduced a rigid foreign exchange control and prohibited the export of gold. In September 1936, France and subsequently the Netherlands and Switzerland abolished the gold standard, and, in October 1936, France and Italy devalued their currencies.

K. A. SHTROM

Mentioned in ?
References in periodicals archive ?
The exception is Germany, which was not part of the 1930s gold bloc and performed internal devaluation in the 2000s, before the crash, for its own specific reason (the compensation of the country's reunification bill).
Substitute China for Britain and today's eurozone for the gold bloc and the trend of events today has the same ominous feel.
The euro will become progressively overvalued, just as the gold bloc was in the 1930's.
The population of the four countries that were later to form the gold bloc after the United States suspended gold in 1933:03--Belgium, France, Netherlands, and Switzerland--had a combined population that was almost exactly one-half that of the U.
Roosevelt Rebuke Stuns Gold Bloc, but Conference Likely To Go On; President Turns to Domestic Drive: Text of President's Statement," New York Times, July 4, 1933.
Its analysis of the financial crisis of May 1931 which deepened and spread the international bank run that ricocheted from Austria to Germany, Britain, Japan, the United States and ultimately the gold bloc provides a most welcome illumination of the originating events and the policies followed in trying to handle them.
Nor do Bernanke and James observe that the depreciation of sterling involved appreciation of the gold bloc and the dollar, with strong downward pressure on prices, another force supporting the debt-deflation argument of Fisher, Minsky and Kindleberger, which they allow as a possibility but for which they do not test.