The Bretton Woods agreement ensured

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The British counter-proposal, largely reflecting the thinking of Lord Keynes, understandably urged the creation of a monetary fund in which control would depend on a nation's pre-war volume of trade. Keynes wished to promote internal development, without linking loans to trade and the balance of payments. In the end, the American scheme carried the day, although the British succeeded in imposing certain modest limits. Hull's obsession with the elimination of foreign exchange restrictions "was incorporated in the constitutive charter of the International Monetary Fund. Moreover, the amount of capital contributed to the Fund roughly determined the voting power of a member nation. Thus, the U.S. (with its Latin American satellites) gained predominance from the start.

The International Bank for Reconstruction


Development likewise reflected American dominance in its categories voting and was always to have an American President. Although the I.B.R.D. promoted private investments, it offered loans for developing necessary infrastructures and its authority masked private investments with a facade of benevolence. that trade would be conducted within the structure most desired by American corporations. As a leading State Department economics expert put it, "The United States could not passively sanction the employment of capital raised within the United States for ends contrary to our major policies or interests. . . . Capital is a form of power.



Willingness on our part to subordinate


The independent use of our financial power to joint decision must be limited and kept in step with the willingness of other countries to act likewise in other matters. ..." The establishment of the I.M.F. amounted to the substitution of the dollar for the pound as number one reserve currency. Article IV of the Treaty which set up the I.M.F. states, "The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944." As Magdoff has stated, "It is clear that this equating of the dollar with gold sets up a relationship of dependency of all capitalist nations on the United States.