Bretton Woods conference
730 delegates from 44 Allied nations met at the Mount Washington Hotel for three weeks. The dollar was pegged to gold at $35/oz and every other currency pegged to the dollar. Keynes, representing Britain, argued for a more neutral international unit called the 'bancor.' The US, which held two-thirds of the world's gold, refused. Keynes lost.
Harry Dexter White, the lead US negotiator, was later credibly accused of being a Soviet agent. The accusation does not appear to have changed the substance of the deal he negotiated — the US demands were never in doubt — but it remains one of the more surreal footnotes in the history of monetary policy.
05 · Bretton Woods & the Dollar
At a New Hampshire resort in July 1944, 44 Allied nations designed the postwar monetary order. The dollar was pegged to gold at $35/oz; every other currency pegged to the dollar. The Federal Reserve became the global monetary authority. The IMF and World Bank were created. It was the first deliberately-negotiated global monetary system in history — and the last one before the current era of free-floating currencies.
Read the full era →