Ultimately, though, it broke down because the US and Europe could not agree on how to deal with the crisis.

As today’s leaders prepare for the G20 credit crunch summit amid splits between the US and Europe over the need for fresh worldwide stimulus, some commentators say the situation raises the specter of 1933 all over again.

Even British finance minister Alistair Darling said this month that there must be no repeat now of what happened then.

“Governments came together in 1933, they failed to reach agreement and the consequences were that the then recession went on for years and it need not have done so,” he told BBC radio.

The 1933 conference started promisingly enough. As with the G20 summit, which takes place over just one day on April 2, it opened to grandiose claims about what was at stake.

It was “the greatest conference of all time” and “must not fail,” a Daily Mail newspaper editorial said as it started on June 12, 1933, while department store Harrods even took out an advertisement warning delegates that “civilization itself stands at the crossroads.”

King George V, grandfather of Queen Elizabeth II, gave an opening address before world leaders which was broadcast globally.

Delegates took their seats in a giant hall, their country names arranged alphabetically in French, and between formal sessions chatted at a 70-foot-long bar serving drinks from around the world.

One notable absentee, though, was newly-elected US president Franklin D. Roosevelt, who sent his secretary of state Cordell Hull as part of a deeply divided delegation.

And it was Roosevelt’s “bombshell” message saying he would not negotiate an exchange rate stabilization agreement a few weeks later which effectively spelt the end for the conference.

The meeting adjourned, never to reconvene, on July 27. Newspapers pointed the finger of blame squarely at the US, which the Daily Mirror accused of being “absorbingly concerned with their own problems.”

“Half-hearted attempts were made to prove that the biggest of all conferences since the peace conference at Versailles has not ended in the biggest of all failures,” it added in an editorial the day after.

Some historians have been more balanced, saying the problem was that different countries saw the situation differently and were restricted by domestic political concerns in their efforts to reach a negotiated solution.

In a bad sign for the G20, similar problems seem to be in the air now.

“Today again we have disagreement about the nature of the problem and its solution – the Germans and the French want to rein in hedge funds and tax havens, while the US prioritizes fiscal stimulus,” Barry Eichengreen, professor of economics and political science at the University of California, Berkeley in the US, said by email.

“And again political constraints get in the way of doing the right thing,” he added, citing examples including a US failure to “properly” recapitalize its banking system amid “Congressional opposition to more money for Wall Street.”

So how do world leaders avoid a failure like 1933 this time around?

Oxford University historian Patricia Clavin said the most important lesson they could learn from 1933 was “the value of open diplomacy.”

“That’s the legacy, that policies need to be coordinated,” she told AFP. “It takes leadership but also the will to cooperate from all sides, not just to leverage concessions.”

Source: AFP