Beyond the respective functioning of the classical gold standard and the interwar gold exchange standard, one of the main differences between both periods lay on the degree of labor mobility. While the pre-1914 world was characterized by massive migration flows, the interwar years were marked by a dramatic fall in labor movements, owing to the adoption of restrictive immigration policies in the main receiving countries and the implementation of social safety nets in several western and northern European countries. As a result, labor mobility could not play anymore the role of adjustment mechanism that it had during the classical gold standard. Indeed, the existence of a number of adjustment constraints, including wage rigidities and factor immobility, led the countries with fixed exchange rates to adopt counterproductive adjustment mechanisms, such as trade protectionism, that resulted in both internal and external imbalances. Against this background, the return to flexible exchange rates was the only credible option. JEL Classification: F22, F33, N10