For most of 1929 international relations were dominated by the attempt to put reparations on a sounder footing and shore up the international monetary system by the creation of the Bank for International Settlements. This combined initiative derived mainly from the growing apprehension in British and American banking circles about a possible world crisis. Events soon showed that their fears were well-founded. But existing criticism of the banks made them reluctant to draw attention to the need for monetary and financial reform. And even those politicians who described themselves as internationalists displayed a marked reluctance to accept further ‘sacrifices’ for the sake of world stability. The frustrations of a decade of reconstruction had left the world dangerously short of leadership.

Stamp, the Young plan, and the BIS

The Dawes Plan had scarcely been drafted when British experts began to look forward to a further, more radical revision of the reparations regime. Norman warned of the need for revision at the meeting of central bankers on Long Island in July 1927, and shortly afterwards Strong took up the matter with Parker Gilbert, the Agent–General for Reparations, whose annual report on 10 December 1927 advised the reopening of the issue. With reparations rising to the standard Dawes annuity of 2.5 milliard marks in 1928–29 and German foreign commercial borrowings rapidly mounting, Gilbert foresaw a foreign exchange crisis before the end of the decade.