Wielding Finance as a Weapon of Diplomacy: France and Britain in the 1920s
2011; Routledge; Volume: 25; Issue: 1 Linguagem: Inglês
10.1080/13619462.2011.546098
ISSN1743-7997
Autores Tópico(s)Global Financial Crisis and Policies
ResumoAbstract France had long conceived of finance as an instrument of diplomacy. The role of French finance in the sealing of the Franco-Russian Alliance in 1892 is well known; the Quai d'Orsay's use of access to the French financial markets and the Bourse as an arm of foreign policy before the War was the subject of much research in the early 1970s. However, the use of currency speculation as a diplomatic instrument has received little attention. Of course, under a regime of fixed rate parities as existed before the Great War—the Gold Exchange Standard—currency fluctuation was uncommon; it was extremely difficult to attack currencies in a concerted manner on the international money markets for any reason, let alone for diplomatic advantage. But following the outbreak of the Great War, many currencies came off the gold standard, and a state of financial turmoil prevailed in the post-war period. The French franc was not alone in being buffeted on the international market. Currency vulnerability and the ramifications it had for national economic policies became all too obvious. Friends and foe alike could not ignore how short-term concerted action by banks and financial institutions on a currency by heavy selling or buying could undermine governments and their policies. It was not long before governments would view currency speculation as a means of influencing policy. The question of stabilising the French franc in the 1920s and returning it to a fixed parity against gold has been studied from economic and political dimensions; the diplomatic has been the missing dimension. This article looks at the stabilisation of the French currency in 1926 under Raymond Poincaré and the manner in which finance was wielded as an instrument of diplomacy against Britain. It first analyses how France perceived herself to be the object of currency manipulation for political aims by Germany and Britain in the early 1920s, and then it analyses how during the stabilisation of the franc after 1926 under Premier and Finance Minister Raymond Poincaré she was able to turn the tables and use short-term financial advantage as leverage against Britain on important policy matters. Keywords: Quai d'OrsayAnglo-French RelationsInternational CommerceBankingForeign OfficeTreasury Notes [1] See Poidevin Poidevin, R. 1969. Les Relations économiques et financières entre la France et l'Allemagne de 1898 à 1914, Paris: Armand Colin. [Google Scholar], Les Relations économiques et financières entre la France et l'Allemagne de 1898 à 1914; Ibid. Poidevin, R. 1970. Finances et Relations Internationales, 1887–1914, Paris: Armand Colin. [Google Scholar], Finances et relations internationales; Girault Girault, R. 1973. 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[17] Poincaré's second and third cabinets ran from 15 January 1922 to 1 June 1924 combining premiership with foreign affairs; his fourth cabinet ran from 23 July 1926 to 6 November 1928 combining premiership with finance; his fifth cabinet ran from 11 November 1928 to 27 July 1929, when he was Premier with no other portfolio. [18] Jeanneney, L'argent caché, 195, 199–201. For details of the international speculation against the franc, see Schuker Schuker, S. 1976. The End of French Predominance in Europe. The Financial Crisis of 1924 and the Adoption of the Dawes Plan, Chapel Hill: University of North Carolina Press. [Google Scholar], The End of French Predominance in Europe, 92–108. [19] On the impression that 'Anglo-Saxon' finance was partly to blame, see Jeanneney, Cartel, 48; Jeanneney, L'argent caché, 201, 205–6, 215, 218, though he believes that French speculators were the most to blame; Miquel Miquel, P. 1961. Poincaré, Paris: Fayard. [Google Scholar], Poincaré, 494. 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[62] Skidelsky, Politicians and the Slump, 117. The Bank Rate gradually eased to 3%; Boyce, 'Why International Finance Mattered', 188. [63] Nurkse, 'Gold Exchange Standard', 213. [64] Robert Boyce cites other examples of French officials wishing to wield the financial weapon against Germany and Britain in 1930 and 1931, only to be halted by more cautious French political leaders, Boyce, 'Business as Usual', 118–22. He also cites examples from the spring of 1931 'when France did in fact seek to use its massive financial resources to reinforce aspects of its foreign policy' first against Austria, by attaching political demands to Austria's request for help in supporting its currency, and then against Germany which was required by French premier Pierre Laval and finance minister Pierre-Etienne Flandin to make a commitment to adhere to the post-war political settlement in exchange for granting a large international loan to enable Germany to remain on the gold standard. In the face of financial pressure threatening to drive sterling off the gold standard in July 1931, French political leaders wished to use French advantage to secure a tighter political entente with her, something they had vainly sought since the end of the war. Boyce, 'Why International Finance Mattered', 188–9. [65] Skidelsky, Politicians and the Slump, 141; Eichengreen, 'Editor's Introduction', 22. [66] Eichengreen, 'Editor's Introduction', 22. [67] Ibid., 24. [68] Boyce, Great Interwar Crisis, 17, but he claims that French action was inadvertent. [69] Boyce demonstrates that the great interwar crisis, which included the slump and led to the Second World War, was not merely the coincidence of two discrete crises, one economic and the other political, but a single crisis in which economic and political events reacted upon one another' in both directions leading to a radical breakdown of the international order, Great Interwar Crisis, 7–8.
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