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Gold, Debt and the Quest for Monetary Order: The Nazi Campaign to Integrate Europe in 1940

Published online by Cambridge University Press:  13 March 2017

STEPHEN G. GROSS
STEPHEN G. GROSS*
Affiliation:
Department of History and Center for European and Mediterranean Studies, New York University, 53 Washington Square South, Floor 4E, New York, NY 10012; [email protected]
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Abstract

This article explores Nazi visions for a new monetary order in 1940 and compares these plans with European monetary integration after 1945. It shows how Nazi experts identified the same core monetary challenges facing Europe as Allied planners did during and after the Second World War, above all challenges stemming from the Great Depression and associated with the gold standard, international debts, capital scarcity and bilateral treaties. This comparison suggests a certain logic was inherent to reconstructing European monetary relations after the depression, insofar as few viable alternatives seemed open – either in 1940 or after 1945 – to some form of multilateral payment system that was divorced from gold, yet that still fixed Europe's currencies to one another. Ultimately, it argues that 1940 marks an important step in a longer process in which Europe moved away from territorial currencies toward a monetary union, and in doing so expanded the framework of fiat currency beyond national markets to encompass the continent.

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Contemporary European History , Volume 26 , Issue 2 , May 2017 , pp. 287 - 309
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Copyright © Cambridge University Press 2017 

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73 These points he did not publicly admit, but declared in internal discussions with Göring held several days before his public announcement. Geheimes Staatsarchiv Preussischer Kulturbesitz (GSPK), I. HA, Rep. 151 Finanzministerium, Geheimakten – I C Nr. 9401, Report on Meeting from 22 July 1940.

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75 As money doctor Edwin Kemmerer remarked in 1922, when he rejected calls for monetary union at the League of Nations: territorial currencies are ‘a natural reasonable function of a sovereign state’. Helleiner, National Money, 145.

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91 Marshall Plan High Commissioner John McCloy said much the same thing to Adenauer, Abs, Hermann J., Entscheidungen, 1949–1955: Die Entstehung des Londoner Schuldenabkommens (Mainz-Munich: v. Hase & Koehler, 1991), 54–5Google Scholar.

92 American and British officials, including Keynes, hatched virtually the same idea for Britain, planning to write off British wartime clearing debts to its colonies like India and Egypt by 30–70 percent. Clark, Thousand Days, 383–4, 399–404; Tooze, Adam, ‘Reassessing the Moral Economy of Post-war Reconstruction: The Terms of the West German Settlement in 1952’, Past & Present, Supplement 6 (2011), 47–70 CrossRefGoogle Scholar; Timothy Guinnane, ‘Financial Vergangenheitsbewältigung: The 1953 London Debt Agreement’, Center Discussion Paper no. 880, Economic Growth Center, Yale University (2004); Albrecht Ritschl, ‘Transfers Small, Debt Relief Big: The Marshall Plan, Postwar Germany, and the Historical Roots of the Eurozone Debt Crisis’, paper presented at the Social Science and Policy Forum, University of Pennsylvania, 2 Nov. 2012.

93 Hans Fürstenberg of the Berliner Handels-Gesellschaft, quoted in Buggeln, ‘Europa Bank oder Freihandel’, 140; Mierzejewski, Alfred C., Ludwig Erhard: A Biography (Chapel Hill: University of North Carolina Press, 2004)Google Scholar, 23.

94 ‘We could not get what we all wanted’, Keynes reflected, ‘except by dethroning gold and creating a system of international credits so that trade was not limited by the amount of gold available’. Keynes, Collected Writings XXV, 141; see also Harris, S. E., ‘American Gold Policy and Allied War Economics’, Economic Journal, 50, 198/199 (1940), 224–30CrossRefGoogle Scholar; Shirras, ‘Prospects of Gold’.

95 Triffin, Robert, Europe and the Money Muddle: From Bilateralism to Near-Convertibility, 1947–1956 (London: Oxford University Press, 1957), 2–22 Google Scholar, 88–93; Boyce, Interwar Crisis, 210–2.

96 In 1953 German officials criticised the Beyen Plan for a customs union because it ignored what they saw as the ‘central question’, namely, the issue of currency stability. Neebe, Globalisierung, 267–8; In 1957 the Treaty of Rome declared, in paragraphs 103–7, that ‘each member shall treat its policy with regard to rates of exchange as a matter of common concern’.

97 Keynes went the furthest in calling for a purely fiat international money – Bancor – that would be completely independent of gold. Steil, Bretton Woods, 129–30, 140–2.

98 Eichengreen, Globalizing Capital, 91–133; Panitch, Leo and Gidin, Sam, The Making of Global Capitalism: The Political Economy of American Empire (New York: Verso Books, 2012), 67–89 Google Scholar; Block, Fred, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley: UC Press, 1977)Google Scholar.

99 Gilpin, Robert, Global Political Economy: Understanding the International Economic Order (Princeton: Princeton University Press, 2001), 234–60Google Scholar.

100 Steil, Bretton Woods, 153; Johnson, Money, 38–9.

101 Ruggie, ‘Embedded Liberalism’.

102 Johnson, Money, 32–8.

103 A German textile producer on German authority in Europe. 3 Report from Saxony, 16 Aug. 1940, BAB, R 9, 122/3.