Bretton Woods Agreement Was Collapsed In Which Year

4. Dezember 2020 Aus Von ROCT

To strengthen confidence in the dollar, the United States agreed separately to the dollar`s imputation at a rate of $35 per ounce of gold. At this rate, foreign governments and central banks could exchange dollars for gold. Bretton Woods established a dollar-based payment system, which defined all currencies in terms of dollar, even convertible into gold and above all „as good as gold“ for trade. The U.S. currency was now effectively the world currency, the standard to which every other currency was bound. Most international transactions have been denominated in U.S. dollars as key currencies around the world. 730 delegates from the 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, USA, 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. As chief international economist at the U.S. Treasury, Harry Dexter White designed the U.S. Cash Access Project in 1942/44, which rivaled Keynes`s plan for the British Treasury. Overall, White`s system tended to favour incentives to create price stability in the world`s economies, while Keynes wanted a system that promoted economic growth. The „collective agreement was a huge international undertaking,“ which took two years before the conference to prepare for it.