Seventy years ago today, Henry Morgenthau Jr. opened the Bretton Woods Conference at the Mount Washington Hotel, a monumental event in the economic history of the world and the U.S.
The Second World War had been raging for five years, and the Allies were now advancing in the U.S.S.R, France, Italy and in the Pacific. In spite of the global battles, Morgenthau, his chief negotiator Harry Dexter White, and British economic icon John Maynard Keynes led delegates from 44 countries in establishing a new world economic order.
The outcome was astonishing and lasting. The conference created both the World Bank and the International Monetary Fund, both with us still. It established the dollar as the world’s reserve currency. And it made the U.S. the world’s financial capital, replacing London.
That’s well known. What’s less appreciated is that there was never any guarantee the conference would succeed. International conferences had a long history in the early and mid-twentieth century of proving colossal flops. And even if the conference succeeded, the agreement would need two-thirds approval by the U.S. Senate to take effect. That was a tall order, given the hostility to Bretton Woods by the banking community and the GOP. And it had been the Senate that had defeated President Wilson’s dream of the U.S. joining the League of Nations.
What’s even less well known about the Bretton Woods Conference is that it placed a huge strain on one of Morgenthau’s closest friendships. As I wrote this week in USA Today, Treasury officials were convinced the New York Times was trying to sink the conference, even though publisher Arthur Sulzberger was one of Morgenthau’s best friends.
Please check out the USA Today story. Many thanks to Editor David Callaway and his staff for running the piece. The full story of Bretton Woods is one of the key chapters of The Jew Who Defeated Hitler, which is available for pre-order here.