The Bretton Woods Agreements: July 1944

Nov 2006
George Town Tasmania, Australia

While watching Stephen Fry in America,1 episode #1, I was reminded of an international agreement that was signed in July 1944, the very month and year I was born. It was known as the Bretton Woods system of monetary management. It established the rules for commercial and financial relations among the world's major industrial states in the mid- 20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.

Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.

Setting up a system of rules, institutions and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) which today is part of the World Bank Group. These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.2-Ron Price with thanks to 1ABC1, “Stephen Fry in America,†7:30-8:30, 9 August, 2009; and 2Wikipedia.

It was difficult to create a system

that every nation could accept &

in John Maynard Keynes’ speech

at the closing plenary session of

this Bretton Woods conference...

on the day before I was born on

July 22, 1944, Keynes stated that:

...the delegates of this Conference,

Mr. President, have been trying to.

accomplish something very difficult

to accomplish. It has been our task

to find a common measure, common

standard, a common rule acceptable

to each and not irksome to any.........

Little did they know and little did I

know---since I was so very little---

scarcely born and still in the womb

of this travailing, despondent, age-

that this was all part of a process of

Lesser Peace1 which had already been

on the road map and would continue

all my life amidst doom and gloom,

a slough of despond, phantoms of a

wrongly formed imagination, people

ill-equipped to interpret a commotion

throughout the planet with so many

burgeoning pundits of error, like the

sophists of old, at another critical age,

a golden-age in the rise of civilization.2

1 A term used by the international Bahá'í community for a process which began in the 20th century and which, in time, will lead to a full-blown international peace agreement, inaugurating an age, a time, when wars will be no more.

2 The sophists abounded in the golden age of classical Greece in the 5th century B.C. In the second half of that 5th century BC, particularly at Athens, the term sophist came to denote a class of itinerant intellectuals who taught courses in "excellence" or "virtue," speculated about the nature of language and culture and employed rhetoric to achieve their purposes, generally to persuade or convince others. The historical context in which the sophists operated provides evidence for their considerable influence, as Athens became more and more democratic during the period in which the sophists were most active. The parallel with public intellectuals in our time is heuristic.

Ron Price

10 August 2009