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Under The Bretton Woods Agreement

Harold James`s elegant essay is the book`s most thoughtful. The Bretton Woods agreement, he writes, was possible because it isolated the monetary settlement of the interminable trade disputes that trade wars lasted for 70 years. b) The Federal Reserve system has concluded a series of monetary sweaas agreements with central banks in Western Europe, Canada and Japan. Under these bilateral agreements, a foreign central bank granted reserve loans (in foreign currencies) to the Federal Reserve system in exchange for an equal amount of reserve credits (in dollars). The United Kingdom, then the world`s second-largest financial power after the United States, initially kept the pound-dollar exchange rate at $4.03 (where it had been since 1940), but with strict exchange controls to prevent other European powers from easing their own dollar shortages by converting sterling reserves into dollars. In 1947, under pressure from the United States, it abolished exchange controls that allowed foreign bookholders to convert them into dollars. After only six weeks, the UK has re-established exchange controls to protect the remaining reserves of dollars and gold. Yet American officials were determined to open their access to the British Empire. The total value of British and American trade was well over half of the world`s merchandise trade.

In order to open up world markets, the United States first had to divide the British (commercial) empire. While Britain had dominated the 19th century economically, American officials intended to make the second half of the 20th century. Being under American hegemony. [21] [22] In anticipation of the rebuilding of the international economic system during World War II, 730 delegates from the 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. Delegates deliberated from July 1 to 22, 1944 and signed the Bretton Woods Agreement on the last day. Through the establishment of a system of rules, institutions and procedures for regulating the international monetary system, these agreements created the IMF and the International Bank for Reconstruction and Development (IBRD), now part of the World Bank Group. The United States, which controlled two-thirds of the world`s gold, insisted that the Bretton Woods system was based on both gold and the U.S. dollar. Soviet representatives attended the conference, but then refused to ratify the final agreements and claimed that the institutions they had created were “branches of Wall Street.” [1] These organizations were commissioned in 1945 after the agreement was ratified by a sufficient number of countries. A sustainable and effective solution (with fixed exchange rates).

In 1944, at the end of World War II, representatives from 44 countries met at Bretton Woods in the White Mountain National Forest of the United States in New Hampshire. Led by British economist John Maynard Keynes and Harry Dexter White of the U.S. Treasury, they drew up an agreement that hoped it would be the basis for a new financial order. The Bretton Woods system has given rise to strong exchange rates at the international level, as well as at the International Monetary Fund (IMF) and the World Bank. A devastated Britain had little choice. Two world wars had destroyed the country`s main industries, which paid for the import of half of the food and almost all of its raw materials except coal. The British had no choice but to ask for help. It was only when the United States signed a 4.4 billion pound British aid agreement on 6 December 1945 that the British Parliament ratified the Bretton Woods Agreements (which took place later in December 1945).

[24] The Bretton Woods system was put in place as a more stable replacement for the gold standard under which all currencies were converted to gold.


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