Finance:Genoa Conference (1922)

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Participants at the 1922 Genoa Conference.

The Genoa Economic and Financial Conference was a formal conclave of 34 nations held in Genoa, Italy from 10 April to 19 May 1922. It was planned by British prime minister David Lloyd George to resolve the major economic and political issues facing Europe, and to deal with the pariah states of Germany and Russia, both of which had been excluded from the Paris Peace Conference of 1919. The conference was particularly interested in developing a strategy to rebuild a defeated Germany, as well as central and eastern European states, and to negotiate a relationship between European capitalist economies and the new Bolshevik regime in Soviet Russia. However, Russia and Germany signed a separate agreement at Rapallo and the result at Genoa was a fiasco with few positive results. The conference did come up with a proposal for resuming the gold standard that was largely put in place by major countries.[1]


British prime minister David Lloyd George (1863-1945) designed the 1922 Conference in Genoa, Italy.

The idea for a general economic and financial conference of European nations had roots in a January 1922 session of the Supreme War Council held in Cannes.[2] With Europe facing an economic catastrophe brought about by half a decade of World War, marked by millions of deaths, shattered infrastructure, and vast sums of squandered economic resources, British prime minister David Lloyd George sought an authoritative international gathering to set Europe's political and financial house in order, and to firmly establish his leadership at home.[3]

The formal proposal was made at Cannes on 6 January 1922 in the form of a draft resolution presented by Lloyd George and approved unanimously that same day calling for such a conference.[4]

Lloyd George told his parliament that the primary intent of the conference was to provide for "reconstruction of economic Europe, devastated and broken into fragments by the desolating agency of war.[5] The economy of Europe was at the point of collapse, Lloyd George noted:

"If European countries had gathered together their mobile wealth accumulated by centuries of industry and thrift on to one pyramid and then set fire to it, the result could hardly have been more complete. International trade has been disorganized through and through. The recognized medium of commerce, exchange based upon currency, has become almost worthless and unworkable; vast areas, upon which Europe has hitherto depended for a large proportion of its food supplies and its raw material, completely destroyed for all purposes of commerce; nations, instead of cooperating to restore, broken up by suspicions and creating difficulties and new artificial restrictions; great armies ready to march, and nations already overburdened with taxation having to bear the additional taxation which the maintenance of these huge armaments to avoid suspected dangers renders necessary."[5]

Lloyd George controversially sought the inclusion of Germany and Soviet Russia to the international conference as equal members, which met with the particular opposition of France, which sought to neutralize and isolate the two pariah nations of Europe by including them only in an inferior capacity.[6] Any softening in the hardline stance towards Germany was perceived by France as a weakening of the Treaty of Versailles, of which it was a prime beneficiary and to which it was immutably committed.[7]

Reparations and recognition

French Prime Minister Aristide Briand (1862-1932), whose government fell shortly before convocation of the Genoa Conference.

Two great issues lay as impediments to convocation of a multilateral convention to plan the economic reconstruction of Europe. One was the issue of reparations, regarded as the primary matter of contention between the Triple Entente powers of France and Great Britain in the postwar era.[8] At issue was whether the terms of economic reparations in the Treaty of Versailles, which ended World War I, were to be enforced or amended. On the one hand was the British view that massive reconstruction costs laid upon Germany would undermine European economic recovery and thereby the market for British exports of manufactured goods. The French, on the other hand, believed that if Germany were allowed to skirt the severe financial obligations detailed in the peace treaty, its economic rise would be massively accelerated and its political and military hegemony on the European continent rapidly restored.[8]

France, among the main battlegrounds of the European conflagration, was particularly hard-hit and in need of external funds for reconstruction; Germany, on the other hand, was seen as having largely escaped the destruction of infrastructure and economic capacity during the war and currently engaged in systematic underestimation of their ability to pay.[9] The political and economic weakness of Germany was emphasized by its new Weimar government, which effectively made the argument that it would be unable to maintain the specified payment schedule.[10]

Germany's position came to be regarded as an axiomatic truth by political decision-makers in London and Washington, DC, as well as elsewhere throughout, despite quiet indications from some German authorities themselves that some substantial portion of the reparations bill could be safely managed.[10] German politicians sought to minimize the country's tax burden through the acquisition of foreign loans and the reduction of the overall reparations bill.[11] British, American, and Swiss bankers were for their own part adamant that necessary loans would not be available until a final, achievable reparations bill and repayment schedule could be agreed upon by all main parties in the dispute.[12]

In the meantime, German authorities attempted to raise the foreign currency necessary for reparations by dumping paper currency unbacked by gold on the market, triggering a hyperinflation paralyzing the country's economy, which had a desired subsidiary effect of helping make the case that the current schedule of reparations was untenable.[12] It was hoped by Germany, Britain, and the United States and feared by France that the Genoa Conference would provide an opportunity for downward revision of the reparations schedule set forth by treaty.[13]

The apparent softening the economic terms of the peace, which had taken place at Cannes, had led to the toppling of the government of the prime minister of France, Aristide Briand and left his successor, Raymond Poincaré, with little appetite for participation, which threatened the conference.[14] It was only through a dedicated diplomatic offensive by Lloyd George towards the French government during February 1922 that its participation at the April conference, under terms previously agreed to by the Briand government, was won.[15] Although antagonism between France and Britain had festered in the months immediately after the war, France found itself in the uncomfortable position of having to submit to British desires on the matter of an economic conference, as without its support, France would have had little chance of collecting reparations from Germany or entering into any potential strategic military alliance.[16]

The second potential hurdle to holding the Genoa Conference surrounded participation of the new Bolshevik-led government of Russia, as the United States and most nations of Europe did not maintain formal diplomatic relations with the regime and harbored economic claims against it. This inconvenient situation had been effectively set aside by the Supreme Council itself, which approved a formal resolution at its meeting of 10 January 1922 that invited Soviet participation and calling upon the Bolsheviks to submit a list of delegates and support staff seeking to attend so that safe conduct passes for travel and accommodation could be arranged.[17]


Interior view of the main hall of the Palazzo di San Giorgio, location of plenary meetings of the Genoa Conference of 1922.

The opening ceremony of the Genoa Conference took place at 3 pm on 10 April 1922 at the Palazzo di San Giorgio, one of the oldest palaces in the city.[18] Delegations entered at one end of the palace, running a gauntlet of news photographers from around the world, while at the opposite end guests, journalists and members of delegation support staffs disembarked from a column of automobiles to go inside the building.[19] Admission to journalists was through tickets distributed ahead of the event, which were strictly limited.[19]

The entrance of Lloyd George was met with a great ovation from those assembled in the hall as he took his seat to the left of the chairman's seat at the front of the room.[19] As the chief architect of the gathering, he would effectively dominate public sessions of the Conference.[19]

Return to gold standard

Among the propositions formulated at the conference was the proposal that central banks make a partial return to the gold standard, which had been dropped to print money to pay for the war. Central banks wanted a return to a gold-based economy to ease international trade and facilitating economic stability, but they wanted a gold standard that "conserved" gold stocks, with the gold remaining in the vaults and day-to-day transactions being conducted with representative paper notes.[20]

The partial return to the gold standard was done by permitting central banks to keep part of their reserves in currencies, which were themselves directly exchangeable for gold coins. However, citizens would not receive gold coins of the realm in exchange for their notes, unlike the prewar gold standard.

Citizens of European countries had to redeem their banknotes in large gold bars, unsuitable for day-to-day transactions. That largely achieved the goal of keeping the gold in the vaults.

Treaty of Rapallo

On 16 April 1922 on the sidelines of the Genoa Conference, the RSFSR and Germany signed the Treaty of Rapallo. Ratifications were exchanged in Berlin on 31 January 1923. The treaty did not include secret military provisions; however secret military cooperation soon followed.[21][22]


With the Treaty of Rapallo pulling Russia and Germany out of the main picture, the conference lapsed into stalemate. The major powers at first agreed on a contingency package of financial aid to Russia, but the Allies could not agree on the final plan and nothing was offered. The issue of German reparations went nowhere after Poincaré threatened to invade Germany on a unilateral basis if Berlin defaulted on its next round of payments. Lloyd George was increasingly undercut by heavy attacks from the London newspapers. Nevertheless, he offered a final series of linked proposals, which would reduce Germany's liabilities for reparations, increase the French share of payments, and float an international loan to finance German payments, with the money from the loan going directly to France. But nothing was approved. Germany was expelled, France and Belgium withdrew, and the final draft communiqué to Russia was signed only by Britain, Italy, Japan, Poland, Romania, Switzerland, and Sweden, leaving out the key world powers except for Britain itself. Russia in turn rejected this final document. The last decision was to set up another conference at The Hague to take up the same issues. British historian Kenneth O. Morgan concludes:

Genoa was a watershed in international diplomacy.... Never again would such a large, rambling assembly, on the lines of Paris in 1919, be convened, until San Francisco in 1945.... There was too little detailed preparation, too much generalized optimism, too many disparate issues muddled up with one another. In many ways, it was a parody of summit diplomacy at its worst.[23]


  1. Kenneth O. Morgan, Consensus and Disunity: The Lloyd George Coalition Government 1918-1922 (1986) pp 310-16.
  2. John Saxon Mills, The Genoa Conference. London: Hutchinson & Co., 1922; pg. 9.
  3. Mills, The Genoa Conference, pp. 9-10.
  4. Mills, The Genoa Conference, pg. 11.
  5. 5.0 5.1 David Lloyd George, Speech to Commons of 3 April 1922, quoted in Mills, The Genoa Conference, pg. 10.
  6. Mills, The Genoa Conference, pp. 21-22.
  7. Mills, The Genoa Conference, pg. 25.
  8. 8.0 8.1 Sally Marks, "Reparations in 1922," in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pg. 66.
  9. Marks, "Reparations in 1922," pp. 66-67.
  10. 10.0 10.1 Marks, "Reparations in 1922," pg. 67.
  11. Marks, "Reparations in 1922," pp. 67-68.
  12. 12.0 12.1 Marks, "Reparations in 1922," pg. 68.
  13. Manfred Berg, "Germany and the United States: The Concept of World Economic Interdependence," in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pg. 82.
  14. Mills, The Genoa Conference, pp. 25-26.
  15. Mills, The Genoa Conference, pg. 29.
  16. Carole Fink, The Genoa Conference: European Diplomacy, 1921-1922. Chapel Hill, NC: University of North Carolina Press, 1984; pg. 32.
  17. "Invitation to Russia," part of Appendix I, reprinted in Mills, The Genoa Conference, pg. 315.
  18. Mills, The Genoa Conference, pg. 45.
  19. 19.0 19.1 19.2 19.3 Mills, The Genoa Conference, pg. 46.
  20. Edwin Walter Kemmerer (1944). Gold and the Gold Standard: The Story of Gold Money, Past, Present and Future. pp. 164–55. 
  21. Gordon H. Mueller, "Rapallo Reexamined: A New Look at Germany's Secret Military Collaboration with Russia in 1922," Military Affairs (1976) 40#3 pp 109-117 in JSTOR
  23. Morgan, Consensus and Disunity: The Lloyd George Coalition Government 1918-1922 (1986) p, 314, quote on p. 315.

Primary sources

  • Jane Degras (ed.), Soviet Documents on Foreign Policy. London: Oxford University Press, 1951.
  • David Lloyd George, "The Genoa Conference and Britain's Part," Advocate of Peace through Justice, vol. 84, no. 4 (April 1922), pp. 131–137. In JSTOR —Speech to Commons of 3 April 1922.

Further reading

  • Magda Ádám, "The Genoa Conference and the Little Entente," in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pp. 187–200.
  • Evgeny Chossudovsky, "Genoa Revisited: Russia and Coexistence," Foreign Affairs, vol. 50, no. 3 (April 1972), pp. 554–577. In JSTOR
  • Stephen V.O. Clarke, The Reconstruction of the International Monetary System: The Attempts of 1922 and 1933. Princeton, NJ: International Finance Section, Department of Economics, Princeton University, 1973.
  • Alfred L.P. Dennis, "The Genoa Conference," North American Review, vol. 215, no. 796 (March 1922), pp. 289–299. In JSTOR
  • Carole Fink, The Genoa Conference: European Diplomacy, 1921-1922. Chapel Hill, NC: University of North Carolina Press, 1984. online
  • Carole Fink, "Italy and the Genoa Conference of 1922," International History Review, vol. 8, no. 1 (Feb. 1986), pp. 41–55. In JSTOR
  • Wilson Harris, "The Genoa Conference," Journal of the British Institute of International Affairs, vol. 1, no. 5 (Sept. 1922), pp. 150–158. In JSTOR
  • Sally Marks, "Reparations in 1922," in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pp. 65–76.
  • Richard Meyer, Bankers' Diplomacy: Monetary Stabilization in the 1920s. New York: Columbia University Press, 1970.
  • John Saxon Mills, The Genoa Conference. London: Hutchinson & Co., 1922.
  • Leo Pasvolsky, "The Gold Standard before and after the War," Annals of the American Academy of Political and Social Science, (Jan. 1933), pp. 171–175. In JSTOR
  • Stephen A. Schuker, "American Policy Toward Debts and Reconstruction at Genoa, 1922," in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pp. 95–130.
  • Dan P. Silverman, Reconstructing Europe After the Great War. Cambridge, MA: Harvard University Press, 1982.
  • Stephen White, The Origins of Detente: The Genoa Conference and Soviet-Western Relations, 1921-1922. Cambridge, England: Cambridge University Press, 2002.
  • Andrew Williams, "The Genoa Conference of 1922: Lloyd George and the Politics of Recognition,” in Carole Fink, Axel Frohn, and Jürgen Heideking (eds.), Genoa, Rapallo, and European Reconstruction in 1922. Cambridge, England: Cambridge University Press, 1991; pp. 29–48.

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