The Economic and Financial Section prepared the work of the Secretariat and permanent experts of the "Economic and Financial Organisation", made up of:
- a Commission,
- two main Committees: Economic and Financial, through which the Council of the League of Nations used to deal,
- and specific Commissions responsible for general or specific affairs and the preparation of conferences.
The "Economic and Financial Organisation" replaced the Provisional Technical Economic and Financial Committee appointed by the Council of the League of Nations in its resolution of 25th October 1920 and that became in 1923 the Technical Economic and Financial Committee. The "Economic and Financial Organisation" was not an autonomous organization such as, for example, the "International Labour Organisation".
Owing to serious economic and financial difficulties which they were unable to overcome through their own resources, a number of States have appealed to international solidarity. Thus, many of the significant economic and financial problems that countries have had to face since 1920 have also been of concern to the League of Nations. The Council of the League of Nations and its advisory body, the Financial Committee, having at their disposal technical experts of the highest authority, have always been ready to intervene, and have done so with some success. The League of Nations had to study and carry out several important plans of financial recovery, notably in Austria, Hungary, Greece and Bulgaria. This success, which was financial rather than economic, has naturally been compromised by the world depression, which began in 1929.
Up to 1931 there was just one "Economic and Financial" Section. From February 1931, this Section was divided in two : a Financial Section called "Finance and Economic Research Section" devoted to the search of economic information and data, ("Economic Intelligence") and a Section of Economic Relations called "Economic Relationship Section", that dealt with economic relationships between States. In 1939, both sections, economic and financial, were merged into Department II that also included the former Transit Section. But in 1940, most activities of this Department were transferred to the United States, at Princeton (New Jersey) under the supervision of A. Loveday and later, A. Rosenborg. Some questions, related to occupied Europe, however, were still dealt with in Geneva. Certain Section files that were transferred to Princeton and New York were sent back to Geneva in 1968 and classified with the "Princeton Fonds".
Besides these special duties, the State Members have entrusted the League of Nations with the more comprehensive and thankless task of giving the world, in times of depression or unrest, the necessary guidance to enable individual sovereign States to institute a sound economic policy, with due regard for the interests of international economy.
Three important international conferences were held for this purpose:
The Brussels International Financial Conference (1920) to solve the problem of the world financial crisis. The war had only just ended and States had the greatest difficulty in following a sound and durable financial policy. The Members of the Brussels Conference exhorted States to balance their budgets, to eliminate superfluous expenditure, to return to the gold standard, to fight against counterfeiting currency, to abolish restrictions on international trade, to improve transport, etc. States were naturally free to observe or ignore these resolutions, but they visibly endeavoured to bring their financial policy into harmony with them.
The Geneva Conference (1927). The Assembly's First International Economic Conference was held in Geneva in May 1927. Not only Members of the League of Nations, but also the United States of America and the Soviet Union (Union of Soviet Socialist Republics) took part in this Conference. The two main objectives of the Conference were: to reinforce international trade laws, and to halt the widespread practice of tariff increases. It dealt with the international aspect of all important commercial, industrial and agricultural questions of the day.
The London Conference (1933) had two objectives: to stabilize international monetary standards and to have prices rise at a steady and reasonable level. The economic depression resulted in an almost universal collapse of currencies, beginning with the most powerful, Sterling. Only a gold "bloc" consisting of a small number of States stood firm, in the face of a much larger group of countries with unstable currencies. These two monetary systems were yet another handicap to international trade, and formed one of the chief reasons, this time a monetary and economic conference be held in London. A resolution was submitted to the London Conference by the International Labour Conference asking it, in the interests of peace and social prosperity, not to lose sight of the importance of maintaining currency stability and increasing the purchasing power of the masses. However, this Conference was a total failure, as no State was prepared to voluntarily give up any of its own financial and economic strengths. Thereafter, the Economic and Financial Section of the League of Nations decided to focus more on the cooperation of individuals rather than of States.
The League of Nations has, thus, drawn up international economic and financial Conventions on the Simplification of Customs Formalities (1923), the Progressive Standardization of Economic Statistics (1928), the Suppression of Counterfeiting Currency (1929), the Unification of Laws on Bills of Exchange, Promissory Notes and Cheques (1931) etc.