Harry Dexter White

John Maynard Keynes


Marshall Plan Aid

The Bretton Woods system
and the new international economy

History 300 / September 12, 2013

I. The political struggle
        A. Keynes and the British agenda
                1. Lend-Lease and the loans from America
                2. Convertibility and the Dominions/Commonwealth
        B. White and the U.S. agenda
                1. Superseding London & the pound sterling
                2. White's private spying
        C. How to run a conference
II. Functional units of the Bretton Woods system
        A. Monetary relations: the International Monetary Fund (IMF)
                1. Fixed -- but adjustable -- exchange rates
                2. The U. S. dollar convertible to gold (at $35/ounce)
                3. Voting on policy (and loans) weighted by IMF quota
                4. Operational challenges under Bretton Woods:
                    the "dollar gap", convertibility, speculative attacks
        B. Investment: the International Bank for Reconstruction and
                Development = IBRD (World Bank)
                1. Emphasis on large-scale infrastructural projects
                2. Cheap lending as stimulus for private investment
        C. Trade: the missing piece of the triad
                1. The International Trade Organization (ITO) fails
                2. The General Agreement on Trade and Tariffs (GATT)
                      succeeds -- round by round
III. Regional rebuilding: the Marshall Plan (1947-52)
        A. Britain's financial collapse
                1. The 1946 U.S. loan
                2. As predicted -- the 1947 convertibility disaster
                3. Imperial consequences: India & Palestine
        B. Continental Europe: economic misery -> communist triumphs?
        C. Marshall's speech at Harvard, June 1947
        D. Principles of participation
                1. Enhanced productivity
                2. Greater economic unity across Europe
                3. Long-term American influence via "counterpart funds"
                4. The Org. for European Economic Cooperation (OEEC),
                      later Org. for Econ. Cooperation & Devel. (OECD)
IV. The Soviet bloc goes its own way
        A. Membership in IMF rejected
                1. Soviet resistance to economic oversight
                2. The ruble as a "soft" currency
        B. The CMEA (Council for Mutual Economic Assistance, 1949-91)
                1. Bilateral trade deals centered on Moscow
                2. Direction of exploitation shifts over time
        C. Cold War embargo: the Coordinating Committee (COCOM)


Keynes and White

The Mount Washington Hotel

Assembled delegations

Further reading
Harold James, International Monetary Cooperation Since Bretton Woods (New York: Oxford, 1996)
Benn Steil, The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order (Princeton: Princeton University Press, 2013)