This chapter narrates the twists and turns in monetary relations that culminated in the Tripartite Agreement. After discussing the franc's deteriorating position from the spring of 1935 and the implications for Britain's management of the pound, it turns to the pivotal Anglo-American relationship. Distrust was pervasive, but the two sides eventually came to an understanding, assuring each other that they would not further depreciate their currencies in response to a fall in the franc. With London and Washington talking again, there was now space for an agreement to facilitate French devaluation. The resulting Tripartite Agreement, announced on September 26, 1936, set forth revolutionary principles for monetary cooperation, including the rejection of competitive depreciation and exchange controls. With time, the Agreement--informal and vague, unconventional and pathbreaking--would turn the page on the chaos of earlier years and redefine the international monetary landscape.

This chapter focuses on the reciprocal gold facilities created in the weeks after the Tripartite Agreement to enable exchange intervention, viewed as essential for the Agreement to have any chance of success. Each country agreed to convert its currency into gold for other members at a price set each day. The system squared the circle of how to enable countries to intervene in currencies that were not universally convertible into gold and played a crucial role in keeping members on the same page during a time of immense political and economic strain. It established a technical foundation for broader collaboration and was integral to the Tripartite Agreement's success in preventing policymakers from relapsing into the antagonisms of earlier years.