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TRIPARTITE AGREEMENT. The tripartite agreement was an international monetary agreement concluded in September 1936 by France, England and the United States to stabilize their currencies both domestically and on the stock exchange. After the suspension of the gold standard by England in 1931 and the United States in 1933, a serious imbalance developed between their currencies and those of the gold bloc countries, especially France. At the same time, both in England and in America, controversy has intensified between the proponents of “solid money”, who insisted on stabilization, and those who favoured a total demonization of gold and an administered currency. The Gold Bloc countries also insisted that the pound sterling and the dollar stabilize because their fluctuating values had a negative impact on the market value of the gold block currencies. As devaluation pushed up import prices and lowered export prices in England and America, the Gold Bloc countries would eventually have to devalue if the major monetary powers failed to reach an agreement on international stabilization. Parallel to the announcement of the tripartite agreement, France devalued its currency. The international monetary system imploded during the Great Depression. As the conventional narrative says, the collapse of the gold standard and the rise of the devaluation of competition have triggered a currency war that has darkened the system, darkened the decade and still serves as a warning to policy makers today. But this familiar story is only half the truth. With the tripartite agreement of 1936, Britain, America and France joined forces to end their monetary war and make peace. The agreement expressed a new vision in which democracies promised to discuss exchange rate policy and establish a liberal international system at a time when fascist forces were trying to destroy it.

Max Harris explores this little-known but revolutionary and successful attempt to revolutionize monetary relations, follows the evolution of the monetary system in the twilight years leading up to World War II and shows that this story is not just a despair. “The currency war and peace are comprehensive, coherent and extraordinarily well written, and this is an important achievement that should be read by all those interested in international monetary relations, the interwar period – or the international economy in general.” The tripartite agreement was informal and provisional. [5] Subcribative nations have agreed to refrain from competitive devaluation[6] in order to maintain monetary values at their current level, provided that this attempt does not seriously affect domestic prosperity. France devalued its currency as part of the agreement. “Max Harris has written an elegant and well-documented book that reveals the politics and economy behind a major event in the development of the modern international monetary administration, the 1936 tripartite pact. It was one of the turning points that brought the world out of the monetary chaos and devaluations of the Great Depression. (2) The Minister of Finance communicated on the same day that the United Kingdom and France had met the conditions set out in his declaration of purchase of gold from the United States for export or immediate allocation.