The United Nations Monetary and Financial Conference, aka the Bretton Woods Conference, concluded on July 22nd, 1944.

Attended by Allied representatives from 44 nations recovering from the shared hardships of the Great Depression and the still raging World War II, the ground-breaking conference established international guidelines, financial systems, and monetary structures that would help implement mechanisms aiding the free flow of trade, open markets, and lower tariffs. Optimistically, the conference was guided by the commonly held belief that economic collaboration and stability would prevent "military warfare on a vast scale."

One take-away from the gathering was the United States' firm dominance as THE world power with the muscle to lock in the dollar as THE international reserve currency in the newly created foreign exchange system. Other results were the creation of the International Monetary Fund (IMF) to stabilize the exchange rates now "pegged" to the dollar (in turn backed by gold at $35/ounce), and the Washington DC based International Bank for Reconstruction and Development (now part of the World Bank) to fund loans to debtor nations.

This Week in Wall Street History

7/20/08