BRETTON WOODS

1944: THE NEW WORLD ECONOMIC ORDER

By: Felipe Argote

In July 1944 Colonel of Staff Berthold Schenk Graf von Stauffenberg and a broad group of conspirators attempted to assassinate Adolf Hitler by planting a bomb in a briefcase placed under the table of the meeting hall of one of Hitler's bunker near of Rastenburg, in the east of what was at that point East Prussia, now located in Poland. Moments after Colonel von Stauffenberg left the room; someone tripped over the bag and moved out of the way behind a pillar. This saved the life of the Fuhrer (leader). Although killed several members of his staff and many others were injured, Adolf Hitler left the room slightly injured with some shrapnel in the leg only.

A month earlier, on 6 June 1944 was developed the so-called D-Day It was a massive landing of allied troops on the beaches of Normandy. They landed on that day and thereafter, three million soldiers from the U.S., Canada, England, France, Poland and Spanish Republicans. At the same time the Red Army was advancing in the east and had recovered part of Poland.

While that was happening in Europe in Hampshire, USA, among a group of gentle mountains called with names of presidents, where stands the colossal Mount Washington, in a fairly complex called George Washington in Bretton Woods, representatives of 44 countries met in the so-called Monetary and Financial Conference of the United Nations. The aim was to establish a new world economic order that would emerge at the end of World War II.

At this conference arose basically two positions: the United Kingdom led by the prestigious Sir John Maynard Keynes who presented the proposal to create the International Clearing Union, an international compensation fund where the surplus countries would transfer this money to the deficit, and the Bancor, an international currency backed by strong currencies and fixed exchange rate. Then there was Harry D White for the United States of America who presented the proposal to create the outline of the gold dollar standard to a fixed fee of $35 per ounce of gold from which to set the terms for monetary exchange with other countries. Harry White was the principal negotiator of the U.S. delegation, behind which was Treasury Secretary Henry Morgenthau.

There was finishing the Second World War, the U.S. had tamed a vast fortune selling weapons and lending money to its allies, to the point that he kept in his coffers especially in Fort Knox for 80% of all gold in the world. Also, they produced two-thirds of the world's oil and half the coal. The specific weight of the US was used by the Americans by adopting its proposal the gold dollar standard and then the creation of the so called International Bank for Reconstruction and Development, later called the World Bank and International Monetary Fund in the voting weight for the parts of the 8.800 million that was to launch the capital of these banks. So the United States accounted for 31%, to 14.89% Britain, the Soviet Union 13.6%, China 6.3% and France 5.1%. The rest would be contributed by other countries.

With the great weight percentage controlled by the United States they define the location of both banking institutions in their country and imposing its administrative leadership. Japan, Germany and Italy of course did not participate because they represented the axis that was at that moment cornered by the army of the allies. But even it took more than a year and two atomic bombs to end the war.

Also emerging from this meeting in Bretton Woods agreement called the General Agreement on Tariffs and Trade for its initials in English GATT (General Agreement on Tariff and Trade) which was the genesis of what ultimately culminated in 1995 with the creation of the World trade.

At the end of the conference, the Soviet Union did not ratify the agreements. China during the conference was represented by the Kuomintang government, but with the defeat of the Nationalists by Mao Zedong in the civil war, China People's expressed indifference to the Bretton Woods agreements.