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Hoover Moratorium

By mid-1931, the Great Depression was being felt throughout Europe. U.S. President Herbert Hoover offered a plan that he hoped would ease the international economic crisis and provide time for recovery. Hoover issued a public statement in June that proposed a one-year moratorium on the payments of World War I reparations and war debts, postponing both principal and interest. Much negative reaction greeted this idea, some from the United States and thunderous disapproval from France, which felt that extracting every last mark from the Germans was its due. Hoover manned the telephone and lobbied other leaders via the new transatlantic line and managed to assemble support for the moratorium from 15 nations by July 6. Actual approval by Congress did not occur until December, when the legislators pointedly ignored the president's request to review the war debts dilemma. Instead, Congress issued a declaration stating opposition to any restructuring of obligations owed to the United States. The adoption of Hoover’s plan did little to slow economic decline in Europe in the following months. Germany was gripped by a major banking crisis, Britain deserted the gold standard, and France made it clear that the one-year delay would soon expire and the issues would need to be addressed once again. A final effort to find an orderly solution to the war debt and reparations issues was made at the Lausanne Conference in mid-1932, prior to the expiration of the moratorium. This bid ultimately failed because of the U.S. refusal to cancel Allied war debts. When the moratorium finally expired, a handful of former Allies continued to make at least token payment to the U.S., but in the end only Finland was willing and able to discharge its obligation fully.


See other foreign affairs issues during the Hoover administration.