From July 1 to July 22, 1944 representatives of forty-five nations gathered in Bretton Woods, New Hampshire for an International Monetary Conference. Their work to stabilize international currency changed the course of history.
As a result of this meeting, the International Monetary Fund (IMF) and the World Bank came into existence. On December 27, 1945 28 governments, who were responsible for 80% of the quotas contributed to the Fund, signed the IMF Articles of Agreement. Those countries included Bolivia, Egypt, Ethiopia, France, Greece, Honduras, Iraq, United Kingdon and the United States. In 1947 the IMF became a specialized agency of the United Nations, and began financial operations.
The conference was called by President Franklin D. Roosevelt. World War II had not ended, and it was just three weeks after the allies had landed in Normandy. Bretton Woods at that time was solely the post office address of the hotel. 700 people from more forty-four countries descended upon the small town, and upon the hotel management who had only a month to prepare. Preparatory questions, such as voting power, had to be resolved first.
What they created, the original Articles of Agreement, were adopted on July 22, 1944. They have been amended three times, once in 1969, once in 1978, and most recently in 1992.
But in 1971, the US (President Nixon) ended fixed US dollar/gold convertibility due to a variety of factors, including inflationary pressure and the cost of fighting the Vietnam War. This move resulted in the collapse of the system of fixed exchange rates which the IMF was established to oversee, and the Fund lost one of its two main roles.
The current membership of the IMF is 184 countries, and it has 2700 staff members, from 110 countries. Its managing director is Rodrigo Rato, former Spanish finance minister. Today the goal is economic organization that promotes financial cooperation, economic stability, and fair trade among its 184 member nations and provides temporary monetary assistance to countries in need. The 2006 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group was held in Singapore from 17 – 20 September. The IMF Headquarters is located in Washington D.C. They have a regional office for Asia and the Pacific, located in Tokyo.
The World Bank has 9,300 staff members. The World Bank president is Paul Wolfowitz, a former US Deputy defence secretary (became head in June 2005). Reportedly he was one of the “brains behind the Iraq War.” Their headquarters is located in Washington DC and they maintain more than 100 offices in member countries.
Under an unwritten convention, the European Union nominates the head of the IMF, while the US appoints the World Bank head.
Some say the IMF does more harm than good, and that it is time to scrap the IMF.
SEE Opinion #1. | Opinion #2.
The Bretton Woods site has New Hampshire Historic Marker #122a.
-The Bretton Woods Conference: Birth of A Monetary System-
-1944 Photograph of Bretton Woods Conference-