Bretton Woods Conference

The Bretton Woods Conference, formally United Nations Monetary and Financial Conference, was a meeting at Bretton Woods, New Hampshire (July 1–22, 1944), during World War II to make financial arrangements for the postwar world after the expected defeat of Germany and Japan.

The conference was attended by experts noncommittally representing 44 states or governments, including the Soviet Union. It drew up a project for the International Bank for Reconstruction and Development (IBRD) to make long-term capital available to states urgently needing such foreign aid, and a project for the International Monetary Fund (IMF) to finance short-term imbalances in international payments in order to stabilize exchange rates. Although the conference recognized that exchange control and discriminatory tariffs would probably be necessary for some time after the war, it prescribed that such measures should be ended as soon as possible. After governmental ratifications the IBRD was constituted late in 1945 and the IMF in 1946, to become operative, respectively, in the two following years. The IBRD is a part of the World Bank Group.

Rather than a gold standard, Bretton Woods implemented a gold exchange standard at $35 per ounce and positioned the dollar as the world reserve currency. Dollars could be converted back into gold only by foreign governments, however, not by American citizens.

According to Murray Rothbard, under this new system the US would peg dollars to gold, while other governments would peg their own currencies to US dollars.