
134 International Business
The Inter-war Years and World War II (1914–44)
The United States returned to a modified gold standard in 1934, when the US dollar was devalued to
USD 35 per ounce of gold from the USD 20.67 per ounce price in eect, prior to World War I. Although
the United States returned to the gold standard, gold was traded only between foreign central banks, not
between individual citizens. From 1934 to the end of World War II, exchange rates were determined,
in theory, by each currency’s value in terms of gold. During World War II and its immediate aftermath,
however, many of the main trading currencies lost their convertibility ...