IMF and World Bank open
The institutions agreed at Bretton Woods began operations at their inaugural meeting in Savannah, Georgia. The IMF would provide short-term lending to stabilize currency pegs. The International Bank for Reconstruction and Development (now the World Bank) would finance postwar reconstruction and later development. Both still operate today, with budgets that are small relative to their influence.
At Savannah, the US forced controversial decisions about headquarters location (Washington, not London as Keynes had argued) and management (American-led). The choices reflected the same post-war power imbalance that shaped Bretton Woods itself. Keynes died two weeks after returning from Savannah, exhausted.
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 →