Bretton Woods Conference
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Bretton Woods Conference
Location: Hotel Complex Bretton Woods (New Hampshire – U.S.)
Date: Between 1 and July 22, 1944.
Participants: Forty-four countries were attending, half were underdeveloped, twenty were from Latin America, besides India, Iran, Iraq, China, Egypt, Ethiopia and the Philippines. Attended Eastern Europe Soviet Union, Czechoslovakia and Poland.
Fees: On a total capital of 8,800 million USD, the U.S. will be for a fee of 2,740 million (equivalent to 31.1%), the United Kingdom 1300 million (14.8%), the Soviet Union 1,200 (13.6%), China 550 (6.3%) and France 450 (5.1%) for the top five.
Content:
In 1942, President Franklin Delano Roosevelt (1882-1945) decided to convene a conference to discuss how to deal with international monetary problems, which even become worse after the Second World War. In the months leading up to Bretton Woods had been discussed two different proposals, one backed by the United States and the other in the UK. The brainchild of the British economist John Maynard Keynes and American Harry Dexter White.
The Keynes plan was based on the creation of an international body of compensation, the International Clearing Union, which would be capable of issuing an international currency (Bancor) linked to hard currency and local currency exchanged through a fixed exchange rate. Through the ICU surplus countries to deficit countries funded via a transfer of surplus, so it would have the advantage of growing global demand and prevent deflation, which ultimately would be beneficial for all countries . (International banking mechanism not very formalized and automated enough in the hands of central banks). While White proposed a structured institution that legally specifying the roles, operating rules, boundaries, remedies, conditions and measures to implement them concerning the dissolution of the institution.
The key proposal was that countries Keynesian creditors and debtors would be required to maintain a favorable balance of trade, and in case of default, to pay interest on the difference, governments depend on the measures to maintain an account zero. The plan was fully democratic: most powerful business interests could not distort trade balance and the citizens of a country whose manufacturing sector was strong not lose the material results of their efforts because of an uninterrupted export