The Bretton Woods Conference
1944–1945
Wartime Economic Planning
The wartime allies planned for reconstruction and trade while seeking to avoid the currency disputes and barriers of the 1930s. The Atlantic Charter linked peace to economic opportunity. Britain and the United States then incorporated economic cooperation into their Lend-Lease arrangements. [1]
Two years of preparatory discussions brought different plans toward a common text. John Maynard Keynes, advising the British Treasury, proposed a clearing union with an international accounting currency and responsibilities for countries with persistent surpluses as well as deficits. Harry Dexter White of the U.S. Treasury favored a fund with more limited resources and powers. [2]
The Fund and the Bank
Delegations from forty-four countries met in New Hampshire from 1 to 22 July 1944 while the Second World War continued. U.S. Treasury Secretary Henry Morgenthau Jr. presided, and Keynes led the commission considering the proposed reconstruction and development bank. Committees examined drafts, collected amendments, and argued over the bank’s purposes and capital. The final act contained proposed articles for two organizations, which governments had to approve. [3]
The International Monetary Fund would support a system of stable but adjustable exchange rates and provide resources to countries facing temporary shortages in international payments. The International Bank for Reconstruction and Development would help finance recovery from war and longer term development. [1] [2]
Ratification and Later Changes
Congress authorized American participation in July 1945, and the institutions came into formal existence that December. Negotiations over tariffs continued separately and produced the General Agreement on Tariffs and Trade in 1947. [1] [3]
The currency system eventually depended on confidence that dollars could be converted into gold at the official rate. President Richard Nixon suspended dollar convertibility in 1971. The financial institutions survived the change in exchange rates. [2]
Sources
- Bretton Woods-GATT, 1941–1947
Atlantic Charter, Article VII of Lend-Lease agreement, preparations, institutional functions, ratification and GATT
- Creation of the Bretton Woods System
Keynes and White proposals, fixed but adjustable rates, IMF and IBRD functions, and later dollar convertibility
- Bretton Woods and the Birth of the World Bank
Conference opening, Commission II and committees, Final Act and December 1945 ratification
Related Reading
Cite This Article
The Bretton Woods Conference. Chanceries Diplopedia. Record 1a17194826bc770d52d9. https://chanceries.org/research/history/bretton-woods-1944/