Moratoriumin finance, an authorized extension of time for payment of a debt or other obligation beyond the original maturity date. The term came into common usage at the outbreak of World War I in 1914 when the great stock exchanges in London, New York, Paris, Berlin, St. Petersburg, and elsewhere declared moratoriums for various lengths of time, during which all operations—buying, selling, paying—were prohibited.
In international affairs, a noted moratorium is that proposed on June 20, 1931. by President Herbert Hoover. His proposal, as accepted, postponed for one year (July 1, 1931, to July 1, 1932) payments on all war reparations and intergovernmental debts. The moratorium was promptly accepted by all the large nations except France. The delay of 17 days caused by France virtually did away with all the good that might have come from the debt holiday. However, representatives of Germany and nations to whom war reparations were owed met at Lausanne, Switzerland, in 1932, and a new treaty was signed.
On Sunday, March 5, 1933, President Franklin D. Roosevelt declared a national holiday in all banking operations for four days. Under this moratorium all banking business was placed under regulation of the secretary of the treasury. The moratorium was extended on March 9. Banks began to reopen on Monday, March 13.
During the depression many states declared moratoriums on mortgage payments to prevent widespread foreclosures.