The First World War marked the watershed between the 19th and 20th centuries. The former was characterized by a relatively well-functioning international payment system based on the gold standard. London played a pivotal and stabilizing role, and the leading central banks cooperated as necessary. There was almost perfect mobility of factors of production, and commercial treaties and rapidly falling transportation costs encouraged trade. All this vanished in the large war spending of the main combatants, to be replaced by uncertainty and conflict after the war. The Versailles Treaty imposed reparations on Germany. It also re-shaped the political and economic geography of the world. Both new and old countries were politically unstable as the war unleashed social conflicts. Uneasy international relations made economic cooperation difficult.
Keywords: gold standard, total war, Versailles Treaty, social conflicts, nation-states, international economic conferences