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July 1944Reputable source · 2 sourcesWell documented

Bretton Woods Ties the World's Currencies to Gold Through the Dollar

Forty-four nations at a New Hampshire hotel build the IMF and World Bank and peg the postwar world to gold

On the timeline · around July 1944 · The Age of Fiat and Digital MoneyThe Age of Fiat and Digital MoneyBretton Woods Ties the World's Currencies to Gold Through the Dollar19101920193019401950196019701980

Quick facts

Conference dates
1-22 July 1944
Delegates
730, from 44 nations
Institutions created
IMF and International Bank for Reconstruction and Development (World Bank)
Dollar peg set at
$35 per ounce of gold

What happened

As the Second World War neared its end, delegates from 44 nations, 730 people in all, met at the Mount Washington Hotel in Bretton Woods, New Hampshire, for the United Nations Monetary and Financial Conference in July 1944. U.S. Treasury Secretary Henry Morgenthau Jr. presided, and John Maynard Keynes of the British delegation led the commission that designed what became the World Bank. The conference produced the Articles of Agreement for two new institutions: the International Monetary Fund, tasked with overseeing a system of fixed exchange rates centered on the U.S. dollar and gold and providing short-term financial help to countries facing balance-of-payments trouble, and the International Bank for Reconstruction and Development, later known as the World Bank, responsible for financing postwar reconstruction and the development of poorer countries. Under the resulting system, the U.S. dollar was pegged to gold at 35 dollars per ounce, and every other member currency was pegged to the dollar, creating a system of fixed exchange rates anchored, at one remove, to gold.

Why it matters

Bretton Woods was the first deliberately negotiated international monetary system in history, built specifically to avoid the beggar-thy-neighbor currency devaluations and trade barriers that had deepened the Great Depression, and its two institutions, the IMF and the World Bank, remain the central pillars of international economic governance eight decades later even though the fixed exchange-rate system that Bretton Woods itself created lasted less than 30 years.

How we know

The conference's Articles of Agreement, delegate lists, and proceedings were formally recorded and are preserved by the IMF and World Bank as founding legal documents, and the World Bank's own historical archive documents the conference's dates, attendees, and outcomes directly.

Sources

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Bretton Woods Ties the World's Currencies to Gold Through the Dollar · History of Money · SourcedStory