EDGARD MILHAUD AND THE CASE FOR ESTABLISHING AN INTERNATIONAL CLEARING UNION IN THE 1930S: A FORGOTTEN FORERUNNER OF KEYNES?

Abstract

Edgard Milhaud (1873–1964), a professor at the University of Geneva, published a series of texts (from 1932 onwards) promoting the establishment of multilateral international compensation between nation-states, and actively campaigned for this project. His plan centered on a call for a “gold truce” as an alternative to the bilateral clearing agreements that proliferated at the time. The plan drew the attention of several international organizations. It reached the point of arousing the interest of the League of Nations (LON), which decided in 1934 to launch an inquiry (published in 1935) questioning LON members about the project of making clearing agreements multilateral. The Milhaud plan nevertheless fell into oblivion after the Tripartite Agreement (1936) and then the outbreak of WW II. This work aims to situate the Milhaud plan in its intellectual and political context—i.e., the 1930s—analyze its content, and understand its failure. The article also assesses what it had in common with Keynes’s plan for an international clearing union developed several years later.