THE SUMMIT BRETTON WOODS, 1944 J.M KEYNES AND THE RESHAPING OF THE GLOBAL ECONOMY ED CONWAY For my mother, and in memory of my father Contents Prologue The Mount Washington PART I: COLLAPSE The Bitter Peace A Short History of Gold Economic Consequences PART II: MAKING PLANS Lunatic Proposals Bedlam The Wrong Harry White Snakebite Party Babel on Wheels PART III: THE SUMMIT 10 Week One 11 Week Two 12 Week Three PART IV: THE LIFE AND DEATH OF BRETTON WOODS 13 14 15 16 Unmitigated Evil Starvation Corner Onward Christian Soldiers The Bretton Woods System Epilogue Acknowledgements Notes Index About the Author Prologue Saturday 22 July 1944 It wasn’t until dinner was about to be served that the assembled guests realised someone was missing The dining hall was already packed with delegates The majority of them were formally dressed in ties or bow ties, though if you looked closely you’d soon notice the bags under their eyes and the slow gait borne of sleep deprivation Everyone was exhausted For three weeks they had been negotiating; by turns remonstrating and revelling with each other in the conference rooms, corridors and bars of the hotel Most had worked through the nights in a desperate bid to close a deal in time And this was it: Bretton Woods’ final act The closing banquet and plenary session where it would be revealed whether the most ambitious economic negotiations in history had been a success For it was far from assured, even with only a couple of hours left, that the conference would end in triumph The Russians were still refusing to sign They had spent the past weeks stubbornly contesting the terms under which they would participate Rumour had it that Stalin himself had ordered his representatives to stand firm against the Americans The uncertainty had cast a shadow over the event: after three weeks of near-twenty-four-hour working days, which in turn had followed months and years of behind-the-scenes preparation, the conference looked as though it would end in discord That said, merely getting this far was an achievement in itself The world’s leading economic minds had travelled from every corner of the globe, many of them dodging attack on the way One delegate had even come straight from a prisoner-of-war camp The outcome of the war itself was as yet uncertain: British and American troops had landed in Normandy for Operation Over-lord only a few weeks before; in the Pacific, Japan occupied most of the contested territories and had only just lost control of Thailand Momentum was going the Allies’ way but even in a best-case scenario, the conflict would not be over for some time Moreover, nothing of the scale and ambition of Bretton Woods had been achieved before The objective was self-consciously grand: to replace the mangled global monetary system responsible for the Great Depression (and, by extension, for the war) with something that worked No one had ever successfully modified the international monetary system: instead, it had evolved incrementally – from the early days of mercantilism to the British Empire-dominated gold standard which collapsed in 1914, through to the flimsy system of currencies and rules erected after the Great Depression in the 1930s All previous efforts to achieve what the delegates were attempting had failed, without exception Devising a comprehensive new system of governing the world economy was challenge enough, even before one stopped to consider whether it could actually be implemented For a spectre over the Bretton Woods conference: that of the peace summit in Paris twenty-five years before There, in the Hall of Mirrors at Versailles, the world’s leaders had agreed upon a deal which they thought would secure a lasting peace throughout Europe In the event, it had merely sown the seeds of the Second World War Imposing reparations on Germany had served to fuel resentment both in Berlin and among the French and British, who claimed the largest amounts Nor did the leaders even countenance trying to tackle the broader economic mess left behind by the collapse of the gold standard To add to the general discord, the Americans had consigned the League of Nations to irrelevance by refusing to join They had shown scant regard for the sporadic conferences the League sponsored in the interwar period aimed at repairing the world economy Here at Bretton Woods, the task was not merely to design an entirely new set of monetary rules, but to show that, for the first time, the US really would engage Bretton Woods was to be the litmus test of whether twentieth-century internationalism could really work, clearing the path for the foundation of the United Nations the following year That, at least, was the official ambition But had you asked each delegation what they wanted out of the conference, you would have received a host of conflicting answers For the US, this was the moment to demonstrate their rise to the status of the world’s undisputed superpower Britain’s twin aims were to ensure the survival of as much of the Empire as possible while reducing their enormous wartime debts The Mexicans were desperate that silver would play a part in the world’s new economic system (no prizes for guessing their biggest precious-metal export); the French wanted to be recognised as a sovereign economic state And the Russians … well, by the beginning of the final dinner it looked as if they had turned up purely to sabotage the deal For many, the best that could be hoped for from this banquet and closing plenary session was that, somehow, Henry Morgenthau, the US Treasury Secretary, could put a positive spin on the quandary But some members of his delegation had privately conceded that failure to secure Russian involvement would represent a failure of the conference Predictably, the row with the Soviets had centred on money – specifically, how much the Russians would contribute to the new system of global economic management And the mood had soured in the past twenty-four hours as it emerged that, despite their politeness and genuine engagement in the sessions, the Russians were unwilling to budge To add to the delegates’ worries, meanwhile, even the Australians, who had seemed to be in favour of the agreement, hadn’t been granted permission by Canberra to sign up, with only an hour to go until that final dinner This was as much as most of the delegates knew as they filed into the dining room Despite the hotel’s best efforts to keep numbers manageable, hundreds had turned up that night: bleary-eyed delegates, lobbyists, the local great and the good, journalists and even the odd gatecrasher The only people assured of a seat were the big names: the chairmen of the delegations, who had taken their places at the high table – at least, all but one of them Not every Allied country was represented at Bretton Woods President Franklin D Roosevelt had insisted on involving the ‘Big Four’ – the US, Britain, the Soviet Union and China – but who should come along with them was up for debate And as with so much else at Bretton Woods, even this had turned into a battle of influence between the British and the Americans The British regarded the Latin Americans and the Chinese as entirely craven before the US The Americans suspected the British had undue influence over the Greeks and Indians In the end the delegations were whittled down to forty-four, though that was still a few too many for the British, who considered the whole enterprise variously a monstrous monkeyhouse’, a ‘Tower of Babel’ And there were considerable language issues Officially at least, the conference language was English, but some of the delegates insisted on speaking in their mother tongue The chairman of the French delegation, Pierre Mendès France, would happily converse with other delegates in fluent English when they bumped into each other in the corridor, but as soon as the microphones were switched on in the committee rooms, he flipped back into French Nonetheless, that was one step better than the Russian representative, Mikhail Stepanov, who couldn’t speak a word of English But what he and his team lacked in linguistic proficiency, they made up for in their superhuman consumption of alcohol Almost every evening they were to be found in the hotel’s underground bar and nightclub knocking back spirits and trying enthusiastically to communicate with their foreign counterparts, until that proved too much effort and they burst into Russian folk songs The Soviet delegates’ days were even more fraught They and their interpreters spent half their time straining to understand the complex terms being hammered out in the plenary sessions, and the other half trying desperately to confer with Moscow As one of the delegates later recalled, ‘I could not help feeling that they were struggling between the firing squad on the one hand and the English language on the other.’1 Grasp of the English language was less of a problem for ‘Daddy’ Kung, the head of the Chinese delegation H.H Kung (full name K’ung Hsiang-hsi) had studied at Yale, and spent much of his life at various points between the US and China Eventually, after the Communists overthrew the Nationalist government, he would move back to the US and live out his final days a few hours from Bretton Woods, in upstate New York One of the conference’s biggest characters, literally and figuratively, the rotund, genial fellow was a distant descendant of Confucius, and the richest man in China An outside observer might reasonably have assumed that his real aim at Bretton Woods was to throw the most lavish parties Remodelling the world economy, so far as it seemed, was something best left to his advisers, who actually engaged with the negotiations For most of the conference, Morgenthau took a similar stance, leaving the grunt work to his deputy Harry Dexter White, who boasted that he scarcely had more than five hours’ rest a night for the entire conference But tonight it was Morgenthau himself – the head of the US delegation and honorary president of the conference – who took centre stage He had sent round word for the dinner and plenary to be brought forward by half an hour so he could broadcast his final speech live to the nation Which is why there were eyebrows raised about that empty seat All of the other major representatives – including Kung, Stepanov, Mendès France and the Canadian delegation head J.L Ilsley – were now seated around Morgenthau Late on Wednesday, three nights earlier, John Maynard Keynes had been taken ill as he bounded up the stairs after a meeting with Morgenthau They had been arguing about a relatively minor element of the negotiations – whether or not the Bank for International Settlements should be dismantled – when Keynes had dashed up to his room on the second floor of the hotel He collapsed shortly afterwards It was well known that the head of the British delegation had been in poor health For more than half a decade he had suffered from bacterial endocarditis, an infection of the heart valves which sapped his energy and left him at risk of heart attacks He had already suffered a series of attacks, so arrangements at the conference had been geared towards preventing the recurrence of something like this Rather than flying across the Atlantic he had sailed; he left much of the late night work to his colleagues, and tried to resist the temptation to stay out and socialise Even so, his was an arduous schedule: ‘The pressure of work here has been quite unbelievable,’ he wrote in a letter home.2 This is unsurprising, given the timeframe within which the conference was attempting to devise an unprecedented set of new rules for international economics True, the fundamentals of the system had been hammered out in the previous months, but securing agreement on the technical terms with forty-four countries to please was turning out to be a superhuman challenge Within a few hours, word of Keynes’s collapse had spread downstairs to the bar Journalists presumed he had suffered a heart attack on his way up that staircase Reuters reported that he had died Panic spread through the hotel That was Wednesday night; and by the time of the banquet three days later, few had since caught sight of the grand old man of economics Rumour had it that he was back on his feet, but, then again, there was that empty chair staring ominously at the delegates as they sat and waited for the food to be served Perhaps the most important single figure at the conference, J.M Keynes stood, more than anyone else, for what Bretton Woods was about He had been there in Paris in 1919; he was the man who predicted with eerie prescience the breakdown of the Versailles Treaty, in his internationally bestselling pamphlet The Economic Consequences of the Peace Hero-worshipped by economists and philosophers around the world, he could scarcely move from one meeting room to another at the conference without being accosted by yet another admirer seeking advice, or pearls of wisdom Keynes was a genuine international celebrity, the only household name at Bretton Woods – save perhaps for renowned magician Cardini, who had inexplicably appeared in the hotel bar one night to entertain delegates with his illusions He was instrumental in the Allied war effort The Reuters report of his alleged death was celebrated on the front pages in Germany And not only was Keynes the chairman of one of the Big Four delegations, he was the joint author of a significant chunk of the Bretton Woods proposals The symbolism of Keynes’s role was not lost on his fellow delegates: here was the man who had foreseen World War Two, leading us towards a settlement which would prevent World War Three His collapse had shaken everyone As one of his colleagues wrote: ‘I now feel that it is a race between the exhaustion of his powers and the termination of the conference.’3 Keynes’s battle wasn’t merely with his health In conference rooms on both sides of the Atlantic, he had also been fighting the American delegation throughout the negotiations And in these clashes he had come up against a stubborn opponent in the form of White, a rather obscure fifty-one-year-old from the US Treasury White was everything Keynes was not Where Keynes was six foot six inches tall, White was short and stocky Keynes was part of the British establishment, a member of the House of Lords; White was a self-made man from the rough side of the tracks in Boston Keynes was a self-publicist, frequently courting the press when he wasn’t writing for it; White was one of those shy fellows who wears a loud tie in an attempt to express his colourful side – he relished his privacy and never wrote a major work, save for his doctoral thesis Keynes had been a conscientious objector in the First World War; White served in the trenches in France They were the odd couple of international economics, and for much of the time their relationship had been rocky, caustic and occasionally aggressive The pair would shout at each other in meetings, bully each other in an attempt to get their way and, afterwards, abuse their rival to their friends And yet, despite their differences, this odd couple also had much in common Both were irreverent outsiders Both were brilliant Both rubbed their colleagues up the wrong way; President Roosevelt and British Prime Minister Winston Churchill had respectively appointed White and Keynes out of necessity rather than choice Because none of their colleagues really knew how to deal with them, both were given rather vague positions and unusual autonomy – something which would later destroy White’s career And, to a level almost unheard of today, despite being unelected advisers, both overshadowed the finance ministers they were officially serving And what they had come up with together was a blueprint for a world economy that looked as if it might just work However, the Bretton Woods system would face discredit from the very beginning if the meeting was to end in the kind of discord the Russians were threatening The view from the great windows of the dining hall was as majestic as ever As the diners took their seats, the room was suddenly flooded with light As if answering to some almighty cue, the clouds that had over the summit of Mount Washington throughout the day suddenly lifted Pale evening light glinted off the peak If you had cast your eyes down from the top of the mountain, into the valley that enclosed Bretton Woods, you would have spotted the serene fairways of the golf course, the flags fluttering on the greens and then, close enough that you could hear it, the brook that ran by the hotel itself The delegates sat down to see whether they really were about to make history The phrase ‘history in the making’ is bandied around so often that it has lost most of its potency But when the delegates turned up to the Mount Washington Hotel in the summer of 1944 they were under no delusions that that was precisely what they were doing Their task was breathtakingly ambitious: nothing less than to repair the world economy by fashioning a system whereby countries could trade with each other without the threat of financial and economic crises like the ones which had punctuated the 1920s and 1930s On their shoulders was the responsibility of ensuring that their countrymen would never again face either mass unemployment or economic deprivation, both of which might lead them back to war against each other The system they created is regarded by many economists as a remarkable success Indeed the very name ‘Bretton Woods’ is now used as political and economic shorthand for something very simple: real economic recovery Only a handful of the men and women who travelled up to New Hampshire that summer were widely known outside their bureaucracies There were no heads of state – though no fewer than seven delegates would go on to be presidents and prime ministers of their respective countries They were, as far as the public was concerned, anonymous technicians and negotiators What was more, neither of the two lead players in the drama, White and Keynes, was in charge of his country’s finance department Keynes wasn’t even a paid official Though journalists walked the corridors of the Mount Washington alongside them, and though there were occasional intrusions from domestic politics, the delegates were granted remarkable freedom simply to get on with things With the press and public fixated on the VI attacks and the Normandy landings, whereby Allied troops were embarking on the campaign to reclaim mainland Europe, Keynes and White managed to work under the radar The two representatives had a unique degree of independence to create a blueprint for running the world economy They were helped by the fact that, then as now, the workings of the international monetary system are rarely front-page news until they go horribly wrong However, the rules and agreements on how exchange rates interact, how money flows from one country to another and how central banks set interest rates are the very bedrock of how our economies function Ever since the first civilisations began trading with each other millennia ago, swapping coins for goods, there has been an international monetary system And while other economic issues – unemployment, incomes, the behaviour of bankers and businessmen – have always hogged the headlines, their root causes can often be traced back to the behaviour of the system It had been thus in the early twentieth century, when the gold standard frayed, triggering an economic chain reaction (hyper-inflation in Austria and Germany, European financial collapse, trade wars and so on) that culminated in the Great Depression and the Second World War It was thus in 2008 and thereafter, when imbalances between countries in surplus and those in deficit (whether America v China or Germany v Greece) caused build-ups of debt which in turn contributed both to a global financial crisis and to the near-collapse of the euro Today’s global monetary apparatus, with its floating exchange rates and free movement of money across borders, may feel like an inevitable part of the economic furniture Not only is it relatively young, its very existence is a consequence of a series of accidents, of crises and of short-term political decisions that turned permanent This book is, in one sense, an economic history of the past century Over that period, the characters in these pages changed the international monetary system beyond recognition, and changed our lives in the process But Bretton Woods sits at its very centre for a simple reason – and not merely because it happened midway through the twentieth century The system mapped out by the delegates to the Mount Washington in those three weeks in 1944 permitted the longest period of stability and economic growth in history Its protagonists laid the firm foundations the global economy had been missing since the collapse of the gold standard in 1914 The institutions these men and women created – the International Monetary Fund and World Bank – are as important today as they were upon their creation For a brief period of a couple of decades after the conference, the world economy grew at a faster rate than either under the gold standard or in the more recent, modern era between the late 1970s and 2008 The incidence of financial crises was lower than ever before Fewer banks failed Imbalances (in other words trade surpluses and deficits) were smaller Over the same period, inflation was low and the income gap between the rich and the poor remained narrow There is no such thing as a perfect economic system; but, based on its performance, many economists still argue that Bretton Woods was as close as the global economy has ever come to it Others maintain that stability and economic health during this period was due to other factors – that the system behaved very differently from how the men and women meeting at the Mount Washington anticipated; some argue that Bretton Woods merely stored up problems that exploded in its wake Whatever you believe, however – and, this being economics, there will never be a definitive answer – Bretton Woods remains the only time countries ever came together to remould the world’s monetary system And for a tantalising couple of decades, it seemed to work But while the IMF and the World Bank live on, the actual system they oversaw, the rules hammered out in 1944 to lay down how different nations should interact economically, is long dead In 1971, his country’s finances straining under the cost of the Vietnam War, Richard Nixon hammered the final nail into Bretton Woods’ coffin The system had been under strain for some time, but when the President ended the link between the US dollar and gold the international monetary system was changed for ever From that moment, the value of a country’s banknotes was linked not to a reference point – be it gold, silver or even the international currency called ‘bancor’ which Keynes tried and failed to create at Bretton Woods – but to pure trust Some would nickname this system Bretton Woods II, but in reality it was drastically different from its predecessor Since 1971 we have been living in an era of what is called fiat money, where a currency’s value depends on the trust investors have in its issuer To some economists, this is as it should be – many are grateful that there are no longer universal controls on the flow of money from one country to another, as there were for much of the post-war period But, expedient and economically elegant though it might have seemed to rid the world of Bretton Woods, there are more troubling correlations since its demise After 1971, the gap between rich and poor started to widen abruptly The world has become ever more dominated by the financial industry The imbalances between debtor and creditor countries have ballooned to unprecedented levels European Payments Union, 371, 373, 393 European Union/Community, 178, 373 exchange rates, xviii, 6, 78, 391–2; British ‘Boat Draft’ and, 189, 194; Exchange Rate Mechanism (ERM), 284, 394–5; fixed, 71, 134, 235, 378–9, 391–2, 405–6; floating, xix, xxiv, 41, 63, 71, 76– 7, 124, 174, 235, 373, 379, 392–3; IMF’s control of, 169, 170–1, 173, 179, 191, 210, 242, 247–9, 297, 368–9, 373; Tripartite Pact (1936), 95, 149; Volcker’s Plan X, 384–5 Falk, Oswald ‘Foxy’, 65 Federal Bureau of Investigation (FBI), 152–6, 250, 340–2, 357 Federal Reserve, US, 28, 82, 90, 101, 208, 324, 326, 384; collapse of Bretton Woods and, 381, 393; New York, 55, 70, 297; opposition to IMF, 297; printing of money by, 375 Finland, 310, 311 First World War, xxiv, 23–6, 28–34, 39–40, 44, 174; gold standard and, 28, 40, 70, 71; horrors of, 23, 25–6, 29–30; US entry into (April 1917), 28, 33, 34 Fitin, Pavel, 161 foreign exchange markets, 41, 65, 71, 296, 391, 399; Exchange Stabilization Fund (US), 83, 223; government action in, 83, 395–6, 399, 401–2; rapid growth post-Bretton Woods, 396–7 Forster, E.M., 32–3 Fort Knox, 210, 300, 375 fractional reserve banking, 62 France: conference delegation, xi, xii, 15, 198, 217–18, 227–30, 267, 282; crises during 1920s, 75– 6; devaluation of franc (1948), 368; devaluations of franc (1920s), 75, 76, 81; dollar-gold link and, 374–6, 380, 383; fixation with gold, 80, 90–1, 137, 383; gold standard and, 44, 59, 76–7, 80, 90– 1, 137; hostility to Keynes, 90–1; hyperinflation during Revolution, 75; IMF quota and, 207, 223, 224, 226–30; Marshall aid to, 357; occupation of the Ruhr (1923), 76; post-WW2 economic crisis, 310, 311; post-WW2 loan from USA, 337; Second World War, 103, 202, 301; as Security Council permanent member, 222; wartime debts, 43, 46, 74–5 France, Pierre Mendès, 198, 217–18, 226–30 Fraser, Leon, 271, 295–6 free trade, 116, 118–19, 325, 371–2 Friedman, Milton, 378, 392–3 Funk, Walther, 284; New Order blueprint, 99–101, 102, 110, 117, 119, 122–3, 124–5 Galbraith, J.K., xxiii, 162 Garnett, David, 30–1 Geddes, Sir Eric, 45 General Agreement on Tariffs and Trade (GATT), 372 general strike (1926), 55, 70 Geraschenko, V.S., 252* Germany: 1950s–60s recovery, 374, 377, 378; Dawes Plan (1924) and, 76, 110; ERM and, 284, 394; floats currency (1971), 379; gold standard and, 59, 75; hyperinflation in, xviii, 52, 55, 75, 87; launch of unrestricted submarine warfare (1917), 28; Morgenthau Plan, 301–4, 305–6, 307, 315– 16, 357; Nazi party electoral success (1932), 88; at Paris peace conference (1919), 46, 47–8; recession (from 1929), 87; reparations and, x, 44–6, 47, 51–2, 65, 74–5, 76, 87; respect for Keynes in, 65, 90; as surplus nation, 384, 385, 400 Gifford, Charles Alling, Gilded Age, American, 3, 4–5 Giscard d’Estaing, Valéry, 375, 383 Glasser, Harold, 155 Goebbels, Joseph, 99, 109, 176 gold: in Bank of England’s vaults, 54–5, 59, 60, 62, 82; British sale of during WW2, 317; at Fort Knox, 210, 300, 375; France’s fixation with, 80, 90–1, 137, 383; ‘nationalized’ by Roosevelt, 82; rising price of in 1960s/70s, 376, 393; shortages of, 57; South Africa’s reserves of, 231*, 261; Soviet Union and, 149, 232, 265; US dollar tied to, 170, 235, 362, 364, 375–81, 390–1, 392; US reserves in 1960s, 375–8; US suspends convertibility (1971), xx, 381–3; White plan and, 131, 132, 134, 179, 210 gold standard, 54–63; during 1920s, 69–71, 74; Bretton Woods system and, 171, 179–80, 195, 235, 245, 295, 298, 299–300, 319, 332, 369, 388; Britain abandons (1931), 82, 171, 405; Britain returns to (1925), 72–3, 75, 81, 86, 101, 332; central bankers’ informal meetings and, 384, 401; collapse of, x–xi, xviii, xxiv, 24–5, 63, 70; as defunct by mid-1930s, 80–1, 82–3, 86; euro as akin to, xxiv, 405; First World War and, 28, 40, 70, 71; France and, 44, 59, 76–7, 80, 90–1, 137; Germany and, 59, 75; gold exchange standard’ period, 82–3, 124; as inherently deflationary, 57, 59, 60–1, 69–70, 71, 81–2, 124; interest rates and, 59, 71, 124, 369, 392; Keynes and, 25, 55–6, 60, 70–3, 84, 90–1, 124, 169, 171, 179–80; ‘trilemma’ (‘impossible trinity’) and, 392; USA abandons (1933), 82, 362; USA and, 40, 59, 60–1, 70, 77, 78, 82, 171, 362; White and, 55–6, 131, 169, 179–80 Goldenweiser, Emanuel, 101, 208, 217, 237, 309–10, 311, 312, 313, 319 Golos, Jacob, 154 Grant, Duncan, 32, 34, 36, 48, 66, 69 Great Depression, x, xviii, 48*, 55, 77, 88–9, 119, 131, 209, 210, 365, 400 ‘Great Moderation’, 399–400 Greece, 311, 333, 354, 355, 357, 400, 406; conference delegation, xii, 175–6, 178, 196, 197–8; IMF bail-out (2010), 198, 403–4; IMF quota and, 172, 231 Gromyko, Andrei, 149 Group of Five nations, 401–2 Gutt, Camille, 198, 343, 352–3 Halifax, Lord, 324–5, 326–7, 329, 330, 334–5 Harrod, Roy, 140–1, 385 Harvard graduate school, 73–4, 76–8 Hawkins, Harry, 119 Hayek, Friedrich, 173; The Road to Serfdom, 177 Heath, Edward, 384 Hemingway, W.L., 343 Hinshaw, David, 260–1, 262 Hiss, Alger, 360–1 Hitler, Adolf, 176, 272*, 297, 298 Ho Chi Minh, 47 Hoff, Syd, 299 Hoover, Herbert, 48, 77 Hoover, J Edgar, 153, 341 Hopkins, Harry, 39, 90 Hopkins, Sir Richard ‘Hoppy’, 109, 111, 177, 194, 314 Hot Springs conference (May 1943), 139, 203 House of Lords, 169, 300, 331, 332 Hughes, Billy, 45 Hull, Cordell, 84, 116, 119, 123, 133, 228, 304–5 Ibtehaj, Abul Hassan, 230–1 Imperial Preference policy, 84, 117, 118, 123, 125, 319 India, 136, 139, 220*, 263, 319, 335, 366; conference delegation, xii, xxiii, 176, 178–9, 198, 215, 218–20, 244, 247; IMF quota and, 172, 193, 207, 222, 224; sterling balances due to WW2 exports, 115, 117, 178–9, 218–20, 244*, 248, 295, 318, 320, 326–7, 354, 373–4, 390 Industrial Revolution, 62 inequality: in 1920s Britain, 64; falls under Bretton Woods, xix, 388; in post WW1 USA, 37–8, 41–2; as rising after end of Bretton Woods, xx–xxi inflation, xix, xxi, 51, 60, 75, 388; in 1920s, 69, 75; in 1970s, 393, 394; Chinese exports and, 399; German hyperinflation, xviii, 52, 55, 75, 87; in late 1960s USA, 377–8; in post WW2 USA, 370; use of interest rates to control, 394, 395, 401; in WW1 USA, 70, 71 interest rates, xviii, 242, 375, 393, 396; during 1920s, 69; Bank of England independence and, 395; ERM and, 394–5; gold standard and, 59, 71, 124, 369, 392; ‘Great Moderation’ and, 399, 400; national control over, 139, 369, 392, 394, 405; use of to control inflation, 394, 395, 401; in Weimar Germany, 87 international currency idea, 376–7, 402–3; Keynes’‘bancor, xx, 126–7, 140, 169, 180, 243, 361, 363, 376, 390, 402; Morgenthau and, 121, 122, 130, 132, 243; Unitas, 139–40, 144, 147–8, 169, 180, 243; White and, 121, 122, 130, 132–3, 139–40, 243 international financial system, xviii, xx, 283–4, 401; Asian crisis (late 1990s), 87*, 399; ballooning imbalances, xxi, 378; bankers’ horror at IMF, 295–6; Blanchard on, 404–5, 406; British ‘Big Bang’ reforms, 396; Eagle Brown as US expert, 208–9; crises during 1920s, 74–7; crisis (started 2007–2008), xviii–xix, xxiii–xxiv, 273, 365, 397, 400–6; currency trading and arbitrage industry, 396–7; Edwardian golden age, 23–4; end of Cold War-and, 398; fractional reserve banking, 62; Funk’s New Order blueprint, 99–101, 102, 110, 117, 119, 122–3, 124–5; ‘hot money’, 76–7, 124, 134, 365; imbalances between surplus and deficit nations, xviii–xix, 210, 219, 388, 399–400, 401, 403; lack of experts in British delegation, 181; London and, 24, 25, 39–41, 58, 60, 106, 125, 268– 9, 391, 397; New York and, xxiii, 41, 268–9, 271, 283–4, 290–1, 295–7, 301, 342, 345, 407–8; nineteenth-century banking crises, 62–3; planning for new economic order during WW2, 101–3, 117–19, 122–9; rapid growth post-Bretton Woods, 396–8; regulation and control of, 170, 369, 391–2; resurgence post-Bretton Woods, xx–xxi, 396; Roosevelt legislation repealed (1999), 397; ‘trilemma’ (‘impossible trinity’) and, 391–2; US suspends gold convertibility (1971), xx, 381–3; USA displaces Britain as world leader, 40–1; visions for the future, 402–3; Wall Street Crash (October 1929), 39, 66, 77, 80, 87, 91, 396; wilful forgetfulness in, xxiii–xxiv; WW1 and, 23–5, 28, 33, 34, 39–40; see also Bretton Woods system; currencies; exchange rates; foreign exchange markets; gold standard International Monetary Fund (IMF): in 1980s–90s period, 70; ABA campaign to kill off, 290–1, 295– 7, 301; American emphasis on, 238, 239; Annual Meeting (2008), 402; Articles of Agreement, 141, 212, 244, 247, 248f, 268, 273, 371; battle over quotas, 172–3, 179, 193, 196, 206–7, 210, 222–33, 265, 266, 277; British ‘Boat Draft’ and, 189; busts of Keynes and White in boardroom, 407; central banks’ opposition to, 297; ‘Coconut clause’, 262; collapse of Bretton Woods and, 381; Commission I and, 212, 216, 225–6, 241, 242–3, 244–5, 290; convertibility restored in Europe (1958), 371; critical conference meeting on (13 July), 241, 242–7; European devaluations (1948– 49) and, 368–9; European managing director, 343, 352, 372; exchange rates and, 169, 170–1, 173, 179, 191, 210, 242, 247–9, 297, 368–9, 373; executive board, 229, 230; during financial crisis (from 2008), 403–5; first executive board meeting (May 1946), 352–3; five-year convertibility adjustment period, 195, 248, 321, 332, 356, 369–70; General Arrangements to Borrow, 370; Greek bailout (2010), 198; Gutt appointed president, 343, 352–3; huge salaries of directors, 347–8, 349, 356; inaugural meeting in Savannah, Georgia, 343–4, 345–50, 353, 407; as ineffective in early years, 356, 364, 369–70; international banking’s horror at, 295–6; Keynes and, 171, 180, 210–11; Keynes’ creditor nations proposal, 124–5, 128–9, 135, 140, 171–2, 210, 331; language issues and, 218; location of headquarters, 172, 193, 240, 268–70, 345, 346, 347; Marshall Plan marginalises, 357, 363, 370, 389; Morgenthau announces birth of, 265; naming of, 148; as politicised by US, 355–6, 372; as protector of capitalism, 211–12; quota increases (1950, 1966), 370; quotas as inadequate, 370; reinvention of post-Bretton Woods, 398; role as lender of last resort, 171–2; Russian delegation and, 252–3; Soviet Union fails to join, 336, 338, 339, 344, 353; Special Drawing Rights (SDRs), 243*, 376–7, 390; as still important today, xix, xx, 398, 407; US draft at Atlantic City, 187, 190–1; US post-war neglect of, 342; as vision of the future, 408; ‘Washington Consensus’, 398–9; week one of conference and, 216–17, 237; White as American executive director of, 340, 341, 349, 352–3, 356, 361; White’s later view of, 348–9, 363–4; White’s proposal (Stabilisation Fund), 131, 133, 136, 139, 144–5, 147–8, 149, 170, 171, 210–12 international trade, 40, 44, 58*, 59–60, 171, 218, 283, 322, 369, 370, 374, 396, 398; 1930s trade wars, 84; balance of payments deficits, 122, 124, 126–7, 169, 211, 299, 331, 342, 370, 399–400, 401; Clearing Union plan and, 125, 126–7, 131, 140, 180; free trade, 116, 118–19, 325, 371–2; imbalances, xviii, xix, xxi, 378, 388, 399–400, 401; ‘scarce currency clause’, 141; US deficit in late 1960s, 377–80 Invergordon Mutiny (1931), 81 Iran, 230–1 Ireland, IMF loan to, 404 Italy, 43, 141–2, 202, 357, 383, 395; post-WW2 economic crisis, 310, 311–12, 368 Japan, x, 105, 120, 260, 316, 395–6; 1950s–60s recovery, xxii, 374, 377, 378; defeat of in WW2, 307–8; as surplus nation, 384, 385, 400 J.P Morgan, 28, 40, 296 Kahn, Richard, 90 Keilhau, Wilhelm, 270, 282 Kemmerer, Edwin, 70, 295 Kennan, George, 316, 336, 337, 338; ‘Long Telegram’, 338–9 Kennedy, John F, 377 Kennedy, Joseph, 104 Keynes, John Maynard: alchemy and, 406*; alienation of Americans by, 53, 85, 112, 113–16, 144–6, 174, 325–7; on American political system, 113, 306; anti-semitic comments by, 146, 174; appearance of, xvi, 21–2, 68, 69, 314; art and literature collection, 66; Atlantic City pre-drafting and, 166–7, 188–98; attacks on in 1970s and 1980s, 407; background and early career, 22–3, 33; BIS and, 271–2, 273; Bloomsbury set and, 22, 30–3, 35–6, 67, 68–9; sings ‘The Blue Danube’, 254; ‘Boat Draft’ and, 182, 188–90; burden of work at conference, 214, 215, 233–4, 236, 237, 266, 267; ‘capital levy’ proposal, 177; as chairman of Commission II, 190, 216, 237–40, 266; character and demeanour of, xvi, 13, 30–2, 34–5, 85, 113, 137, 174; Clearing Union (Keynes) plan, 123–9, 131, 135–9, 180, 218, 291, 295, 331, 348, 384–5; closing banquet and, ix, xiv, xv, 277–8, 280–2, 284–5, 387; on Communism, 158–9; on conference chaos, 217; as conscientious objector, xvi, 22; ‘convertible exchange’ term, 179, 180, 245; courtship and marriage, 37, 67–8, 241 see also Keynes, Lydia (Lydia Lopokova); creditor nations proposal, 124–5, 128–9, 135, 140, 171–2, 210, 331; Dalton and, 314–15; death of (21 April 1946), 351–2; defends Bretton Woods, 319–20; defends/supports Bretton Woods, 300; diplomatic mission to USA (1917), 34–5; disenchantment with Bretton Woods, 349–50; ‘Dr Melchior: A Defeated Enemy’, 46; early WW2 work, 100–1, 102–3, 110–11; The Economic Consequences of the Peace, xv, 23–4, 49–51, 65, 170, 282; Essays in Persuasion (1931), 87; exchange rate proposals, 189, 194; ‘financial Dunkirk’ term, 308, 318; as financial speculator, 65–7, 91, 92; fondness for bed, 313; French hostility to, 90–1; General Theory of Employment, Interest and Money (1936), 13, 65, 88–91, 175, 242; gold standard and, 25, 55–6, 60, 70–3, 84, 90–1, 124, 169, 171, 179–80; ‘gold-convertible exchange’ phrase and, 179, 243, 245–6; on Hayek’s The Road to Serfdom, 177; health collapse (1936–37), 91–2; health collapse at conference, xiv–xv, 270, 271–3; health of after conference, 304, 313–14, 328, 329, 332–3, 344, 350–1; health of at Atlantic City, 191; health of at conference, 233–4, 236, 264–5, 270, 271–3, 277–8; heart problems, xiv, 5–6, 91–3, 328, 332, 344, 350–1; hereditary peerage, 111; holds anniversary dinner, 12–13, 220; on Hot Springs conference, 139*; as a household name, xv, 26, 65; IMF quotas and, 370; King’s College, Cambridge and, 12–13, 22, 64– 5, 66, 241; Kung and, 221–2; on Labour cabinet, 314; lawyers and, 186, 194, 281, 325; LendLease negotiations in US (1941), 6, 111–18; Lend-Lease negotiations in US (1944), 304, 305–7, 316; Lloyd George and, 33–4, 46, 50, 51, 331; location of new institutions and, 269, 270, 345, 346; as mean tipper, 204*; mission to Canada after conference, 291–3, 294; mission to Washington (from September 1945), 323–32; Morgenthau Plan and, 304, 305, 307; outlines Britain’s post-war options, 320–3, 326, 327, 333; Paris peace conference (1919) and, xv, 26, 37, 43, 44–6, 48–50, 53, 275; planning for new economic order during WW2, 101–3, 117–19, 122–9; praise for Funk scheme, 100–1; on the press, 138*; press attention at conference, 204, 214; press conferences and, 259; rebuffs New York bankers’ loan offer, 297; reparations and, 44–6, 51, 65; return to London (20 August 1944), 294–5, 301; reveals Britain’s WW2 debts, 258; Robbins and, 13, 127–8, 137, 142, 144, 173–5, 242, 352; Robertson and, 241–3, 246–7, 290; role of IMF and, 171, 180, 210– 11; Roosevelt administration and, 85–6, 90, 112–18; rumours of death of, xv, 272; Russian delegation and, 250, 275, 278; sails to USA for conference, 165, 166–7, 175–6, 177–82, 185, 190; in Savannah for IMF inaugural meeting, 344–8, 407; sex life of, 36–7, 67; on signing of Final Act, 289–90; status of at conference, xviii, 174; takes sodium amytal, 328, 332; ‘The Economic Consequences of Mr Churchill’, 72–3; Tobey’s speech and, 17; tour of France and Belgium (1918), 21, 22, 23, 26, 37; A Tract on Monetary Reform, 71–2; Treatise on Money, 65, 122; in USA for talks (autumn 1943), 142–8; views on White plan, 134–5, 136, 144–5, 148; visit to USA (1934), 85–6; on White, 194–5, 196–7, 280; White and, xvi, xxiv–xxv, 329, 368–9, 376; White and (face-to-face meetings), 85, 86, 135–6, 144, 145–7, 240, 307, 348–50; White on, 115, 238; World Bank and, 180–1, 189–90, 195, 237–40; WW1 work in Treasury, 22, 26, 30, 32, 33–4 Keynes, Lydia (Lydia Lopokova), 69, 91, 111, 112, 142, 292–5, 301, 324, 344, 345; at conference, 10, 11, 13, 204, 205–6, 215, 233, 236, 241, 252, 253–4, 272; eccentric behaviour, 143, 205–6, 293, 304–5; Keynes’ courtship of, 67–8, 241; Keynes’ death and, 351, 352; marries Keynes (1925), 68; meets Keynes, 37; nursing of Keynes, 92, 93, 142, 144, 233, 236, 264, 304, 313, 328, 350; sails to USA for conference, 165, 166 King, Mervyn, xxiv, 402, 404 King’s College, Cambridge, 12–13, 22, 64–5, 66, 241 Kirk, Alexander, 312 Klotz, Henrietta, 79, 256 Kobyakov, Julius, 160 Kung, H.H ‘Daddy’ (K’ung Hsiang-hsi), xiii, xiv, 13, 195–6, 214, 220–2, 261 La Follette, Senator Robert, 42–3 Labour government (1945–51), 308, 314, 315, 316, 318, 320–3, 330–3, 366–8 labour movements, 55, 60, 70, 82 language issues, xii–xiii, 217–18, 251, 253–4, 276 Latin Americans, xii, 190*, 207, 239, 249, 261, 262–3, 270, 274 League of Nations, xi, 26, 247, 266–7, 290; US refusal to join, xi, 7, 52 Lee, Frank, 205, 294 Lee, Kathleen, 205 Lehman Brothers bankruptcy (2008), 365, 400 Leith-Ross, Sir Frederick, 315 Lend-Lease, 6, 107–9, 111–18, 295, 303, 304, 305–7; abrupt cancellation of, 308, 316–18, 320; Article VII, 118, 119, 122, 123, 126, 142, 143*, 322 Leningrad, siege of, 142 LePan, Douglas, 323 Ley, Willy, 14 Lloyd George, David, 33–4, 45, 50, 53, 331; Paris peace conference (1919) and, 43–4, 45, 46, 47, 48, 50, 51 London: ‘Big Bang’ reforms and, 396; currency trading and arbitrage, 397; Eurodollar market, 378, 391, 396; as financial centre of world, 24, 25, 39–40, 58.60.125.268–9; G20 summit (2009), 402; as major financial centre, 106.268–9, 391, 397; V1 attacks, xviii, 14, 165–6, 177, 197, 291, 312; World Economic Conference (1933), 82 London School of Economics (LSE), 173, 220 Lothian, Lord, 106 Luxford, Ansel, 256, 317, 342 MacDonald, Malcolm, 67–8, 291, 292, 293 Machado, Luis, 261 Magazine of Wall Street, 259 Marshall, Alfred, 88, 242 Marshall Plan, xxii, 263, 357, 363, 368, 370, 371, 372, 373, 389 Marx, Karl, Das Kapital, 159 Mayer, Eugene, 343 McCardle, Carl, 257–8 Meade, James, 129, 142, 143, 144, 145, 147, 162, 167, 388–9 Melchior, Dr Carl, 46 Melville, Sir Leslie, 193, 277 Mendès France, Pierre, xii, xiv mercantilism, x Mexico, xi, xxiii, 195, 207, 210, 224, 261, 262 Mikesell, Ray, 145, 160–1, 162, 223–4, 225, 227, 228, 230, 236*, 350–1 Molotov, Vyacheslav, xxiii, 150, 279, 336, 337 monetarism, 393, 401 monetary policy, domestic: ERM amd, 394–5; Eurozone and, xxiv, 284; ‘Keynesianism’ and, 72; rigidity of gold standard, 71, 124, 169; ‘trilemma’ (‘impossible trinity’) and, 391–2; see also interest rates Montgomery Ward 8c Co, 267 Moore, G.E., 32 Morgenthau, Elinor, 206, 272 Morgenthau, Henry: Atlantic City predrafting week and, 184, 187–9, 195–6; background and career until WW2, 39, 80, 90, 95; on China-Russia relations, 222; at closing banquet, xi, xiii–xiv, 279– 80, 282–5; at conference, xiv, xxiii, 206, 207, 212–14, 228–31, 238, 265, 267–8, 269, 270, 271–2; desire to dislodge Britain, xxiii, 125; doubts over British WW2 finances, 106, 115–16; international currency idea, 121, 122, 130, 132, 243; issue of conference venue, 6, 8; Jewish background of, 8, 79, 260; Keynes and, 113–14, 115, 146, 294, 305; Morgenthau Plan, 301–4, 305–6, 307, 315–16, 357; on Phillips, 112; ratification campaign and, 299; resignation of (July 1945), 308, 315–16; Soviet Union and, 120, 149, 150, 163, 253, 279–80; tensions with State Department, 84, 114, 133–4, 195, 269; visit to England (1942), 135; White as right-hand man of, xiii, 78–80, 84–5, 121–2, 155, 184, 187–8 Morgenthau, Joan, 206, 209 Mosley, Oswald, 88 Mount Washington, xxv, 4, 233, 241, 277, 386; Jimmie, the caretaker, 204–5; Old Man of the Mountain, 236 Mount Washington Hotel, xvii, 2–5, 7–12, 197, 201–6, 212, 254–5, 386–7; American Bankers’ Association conference, 290–1; bars and restaurant, 11–12, 212, 216, 254, 255, 277, 387; Gold Room, 285; Stoneman throws the delegates out, 289–90 ‘multiplier’ concept, 90 Munich agreement (September 1938), 95 Mussolini, Benito, 141–2 Nash, Walter, 208, 226, 230 National Mutual Life Assurance Company, 66 Nazi Germany, xxiii, 90, 92, 94–5, 103–4, 129, 260, 284; BIS request (March 1939), 93–5, 166, 270; Funk scheme, 99–101, 102, 110, 117, 119, 122–3, 124–5; Reichsbank, 94, 166, 284, 298 Netherlands, 80, 103, 175, 178, 228, 230, 311, 379 New York: banking industry in, xxiii, 268–9, 271, 283–4, 290–1, 295–7, 301, 342, 345, 407–8; Corner House, 39, 41; heat of summer in, 5, 6,293; White moves to, 356–7 New York Times, 209, 258, 260, 379, 385 New Zealand, 208, 230, 335 Newcomer, Mabel, 209, 299 Newton, Sir Isaac, 56, 58, 66, 406* Nicaragua, 296 Nicolson, Harold, 46, 100, 102, 110 Nixon, Richard, 377, 378, 384; ends Bretton Woods system, xx, 380–5, 393; House Un-American Activities Committee, 359, 360–1, 364, 380 Noriega Morales, Manuel, 218–19 Norman, Montagu, 93, 94, 125, 171, 271, 384 Norway, 176, 270, 282, 310 nuclear weapons, 307, 366 Nurkse, Ragnar, 102, 247, 266–7, 275 Organisation for Economic Co-operation and Development (OECD), 371*, 398 Organisation for European Economic Cooperation (OEEC), 371 Ottawa, 292–3, 294, 324 Overend and Gurney, collapse of (1866), 62 Papandreou, Andreas, 198 Papandreou, George, 198 Paris peace conference (1919), xv, 26, 37, 43–51, 52–3, 74, 302; reparations and, x, 44–6, 47, 51–2, 65, 74–5, 76, 87; Treaty of Versailles (June 1919), x–xi, xv, 47–8, 275, 302 Pasvolsky, Leo, 134, 145 Pearl Harbour attack (December 1941), 120 Penrose, Ernest, 135, 136; Economic Planning for the Peace (1953), 139* Perlo, Mrs Victor, 154, 155 Philadelphia Evening Bulletin, 257–8 Phillips, Sir Frederick, 109, 112, 113, 114, 134, 135, 138, 314 Plesch Janos, 6, 92, 114*, 264, 313 Poincare, Raymond, 76 Poland, 176, 179, 231, 274, 311, 355 Pompidou, Georges, 383 Porter, Sylvia, 258 Potsdam summit, xxii press and media, 174, 183–4, 299–300, 319, 348; journalists at conference, xii, xviii, 11, 16, 167, 202–4, 205, 213, 214, 257–60 Price Specie Flow theory, 59 Princeton University, 70, 114*, 158*, 362 the Progressives (US political movement), 38, 42–3 prohibition era, 11, 212 protectionism, 84, 116, 125, 242 Quebec conference (1944), 303 Queen Mary, 142, 175–82, 190, 191, 344, 351 Raisman, Sir Jeremy, 176, 179 Rasminsky, Louis, 137, 216, 252–3, 347 Richardson, Dorothy, 224* Riis, Jacob, How the Other Half Lives, 39 Robbins, Lionel, 86, 129, 182, 193, 196, 230, 261, 275, 290, 294; American delegation and, 240, 269–70; on Commission III, 216; on conference chaos, 10; on conference food, 254; Dominions’ sterling balances and, 218–20, 248; exchange clause and, 248; on ‘Hoppy Hopkins, 109; on Keynes, 189, 214, 222, 233–4, 264, 284–5; Keynes and, 13, 127–8, 137, 142, 144, 173–5, 242, 352; mission to Washington (from September 1945), 323–4, 325–6, 327, 328, 331; on Russian delegation, 15, 233, 251, 265, 276; service in WW1, 30, 174; onTobey’s speech, 17 Robertson, Dennis, 13, 89, 128, 139, 146, 175, 191, 241–3, 267, 279, 294; proposes dollar standard, 244–5, 246–7, 290, 372, 374, 376, 390 Ronald, Nigel, 13, 175, 261*, 271–2, 273 Roosevelt, Eleanor, 80, 209 Roosevelt, President Franklin D., xii, xvi, 7, 80, 104–9, 139, 213, 280; ‘Big Four’ of, xii, 134, 168, 221–2, 228, 231; death of (12 April 1945), 308, 315, 317, 336*; dollar devaluations by, 82, 83–4; economic policy of, 78, 82, 83–4, 85, 90, 380; financial reforms, 208, 396, 397; gold value of the dollar and, 362, 364; Keynes and, 85–6, 90, 114–15, 117, 118, 174; Lend-Lease and, 107–9, 112, 116–17, 317; re-election campaign (1944), 5, 168, 184, 202, 306; Soviet Union and, 108, 120, 162–4, 302–3, 335, 336*, 339, 450 Royal Mint, 56, 58 Russell, Bertrand, 35 Russia, Tsarist, 62–3 Russian delegation to conference, 11, 15, 214, 215, 231–3, 252–3, 265–6, 338; alcohol consumption, xiii, 232, 250, 251; disruptive role of, ix, xi–xii, xvi, 275–7, 278; Kol’tsov and, 198, 249–50, 251; language issues and, xii–xiii, 217, 251, 253–4, 276; U-turn on Bank quota, 279–80; World Bank and, 239–40, 266, 273–5, 279–80, 335 Safire, Bill, 380 Salter, Arthur, 111 Sassoon, Siegfried, 32 Savannah, Georgia, 343–4, 345–50, 353, 407 Schacht, Hjalmar, 75, 94, 99, 126 Schuler and Rosenberg, The Bretton Woods Transcripts (2012), 238* Schumacher, E.F., 102 Second World War: Allied victory in, 307, 308; Blitz (1940), 104, 109–10, 312; casualty statistics, 310–11; conference delegates and, 14–15, 197–8; D-Day security lockdown, 167, 184; destruction caused by, 309–10; El Alamein, 285; German prisoners of war, 176, 204, 304; the Holocaust, 301; Italy and, 141–2, 202; liberation of Paris (August 1944), 301; Nazi victory in western Europe (June 1940), 103–4; Normandy Landings (June 1944), x, xviii, 14, 15, 123, 167, 176, 197, 202, 236, 284, 291, 312; Pacific war, 14, 123, 307; Soviet Union and, 15, 129, 142, 162, 253, 295; VI attacks, xviii, 14, 165–6, 177, 197, 202, 291, 312 Shaw, George Bernard, 88, 92, 159 Shroff, Ardeshir Darabshaw, 219–20, 244 silver, xi, xxiii, 57, 58, 61, 195–6, 207, 210, 216, 224, 261, 262 Silvermaster, Greg, 153–4, 156, 157 Skidelsky, Robert, 49, 204* Smith, Adam, 119; The Wealth of Nations, Smithsonian Agreement, 383–4, 393 Smoot – Hawley tariff (1930), 84 Soong, T.V., 221 Soros, George, 387, 394–5 South Africa, 231, 261 Soviet Union, xxii–xxiii; agrees to attend Bretton Woods Conference, 149–50; as ‘Big Four’ nation, xii, 134, 231; collapse of (early 1990s), 398; failure to join Bretton Woods, 335–9, 344, 353; gold and, 149, 232, 265; Gosbank, 249, 251– 2; Gosplan, 78, 338; IMF quota and, 172, 223, 224, 232–3, 265; Morgenthau and, 120, 149, 150, 163, 253, 279–80; NKVD/KGB, 152, 156, 157, 160, 161, 198, 250; poor relations with China, 222; Roosevelt and, 108, 120, 162–4, 302–3, 335, 336*, 339; Second World War and, 15, 129, 142, 162, 253, 295; Truman and, 335–6, 339; Venona files and, 156, 157–8, 161, 361; White and, xxiv, 78, 149, 150, 151–2, 162–4, 274, 302–3, 335, 337, 339 Spanish influenza epidemic, 38 Spring-Rice, Sir Cecil, 34 Stalin, Joseph, ix, xxiii, 162, 265, 303, 337, 338, 353 Stamp, Josiah, 109–10, 111 Stein, Herbert, 380 Stepanov, Mikhail, xiv, xxiii, 252–3, 260, 265, 273–4, 275, 282, 338; considerable autonomy of, 232*, 276, 279*; language issues, xii–xiii, 250, 251, 285; last minute U-turn on Bank quota, 279– 80, 335 sterling, 69, 128, 132, 244, 245*, 247, 395; Britain ends peg with France, 44; convertibility, 248, 319, 322, 327, 329–30, 331, 332, 354, 366–7; derivation of term ‘pound’, 56; devaluation of (1949), 368, 373, 374; devaluation of (1967), 373, 382; dollar displaces as dominant unit, 41; final departure from gold standard (1931), 82, 171, 405; Heath floats pound (1972), 384; IMF’s control over value of, 169, 170–1, 173, 179, 191, 210, 242, 247–9, 297, 368–9, 373; return to gold standard (1925), 72–3, 75, 81, 86, 101, 332; sterling area, 84, 125, 212, 260, 319, 320, 321, 332; WW1 devaluation, 28, 40 Stickney, Carolyn, 7, 285 Stickney, Joseph, 2–3, 4–5, Stock Exchange, London, 25 Stoneman, David, 8–9, 12, 254–5, 267–8, 289, 386 Strachey, Lytton, 31, 32, 33, 36, 67; Eminent Victorians (1919??), 50 Stravinsky, Igor, 37 Strong, Benjamin, 70, 71, 384 Suarez, Eduardo, 261, 262 Suez crisis (1956), 373 Taft, Robert, 300 Taussig, Frank, 76, 78 Theunis, George, 23, 26, 275 Tiffany & Co., New York, 4, 9,387 Tilton, Sussex, 68, 92, 123, 205, 351, 352 Time magazine, 152, 221 Tobey, Senator Charles, 7, 15–17, 209 Triffin, Robert, 375, 376 Truman, President Harry, 303, 315–16, 335–6, 339, 340, 341–2, 355–6, 361 Turkey, 355 Twin Mountain Hotel, 203, 259 Ullmann, William Ludwig, 80, 155 Un-American Activities Committee, House, 154, 358–60, 380 unemployment: in 1920s Britain, 64; after 2008 crisis, 387; in Germany (from 1929), 87; during Great Depression, 77; Nazi public works projects, 90; public expenditure and, 89–90; White Paper on Employment (1944), 129, United National Relief and Rehabilitation Administration, 267 United Nations, xi, 179, 222, 225, 269, 353–4 United States conference delegation, xii, xv–xvi, xxii, 184, 210, 256–7; briefed by White, 206–7, 210–12, 406; French as ‘laughing stock’ for, 228–30; Latin Americans and, 207; make up of, 207– 10; Russians and, xi, 231–3, 265–6, 274, 278, 335 United States of America (USA): anti-British turn under Truman, 308, 316; as ‘Big Four’ nation, xii, 134, 168; British mission to Washington (September-December 1945), 323–32; as deficit nation, 399–400, 401, 403; emphasis on IMF over Bank, 238, 239; enters WW1 (April 1917), 28, 33, 34; expansion of 1920s, 70–1, 73–4, 77; as ‘factory and grainery to the world’, 40; forces sale of British assets (1940–41), 106–7; as global economic superpower, xi, xxiii, 39–41, 106, 123, 132, 192, 210; gold standard and, 40, 59, 60–1, 70, 77, 78, 82, 171, 362; IMF quotas and, 223–33; Johnson Act (1934), 105; Kennedy-Johnson era, 375–8; Labour government and, 315, 316, 318, 320–3; loan agreement with Britain (December 1945), 330–2, 333, 334–5, 337, 353, 354, 366–7; loans to WW1 allies, 40, 43, 46, 52–3, 74–5, 105; Neutrality Acts, 105; objections to Clearing Union plan, 128–9, 138; postwar emphasis on World Bank, 342; question of post-war aid for Britain, 303, 307, 315, 316, 320–3; refusal to join League of Nations, xi, 7, 52; role of IMF and, 170, 171–2, 191; Second World War and, 15, 103, 104–5, 123, 135, 176; separation of powers, 113; settlement houses, 38–9, 41–2; ‘Shylock’ label, 74–5; State Department-Treasury tensions, 80, 84, 85, 114, 133–4, 185, 194, 195, 269; sub-prime mortgage debt, 400; trade and budget deficit in Nixon era, 377–80; Trading with the Enemy Act (1917), 381; Washington talks with the British (autumn 1943), 142–8, 167, 168; Watergate scandal, 385; WW1 inflation in, 70, 71 Varvaressos, Kyriakos, 175, 178, 196 Vassiliev, Alexander, 157, 361 Versailles, Treaty of (1919), x–xi, xv, 47–8, 275, 302 Vietnam War, 376, 377, 383 Viner, Jacob, 78, 114 Vinson, Fred, 184, 316, 330, 337, 342, 343, 353; ceremony bringing agreement into force, 334, 335, 339–40; at conference, 207, 225–6, 253, 256, 265, 267, 274; distrust of White, 328, 340, 342, 349; Keynes and, 325–6, 345, 346; in Savannah for IMF inaugural meeting, 346–7, 348, 350 Volcker, Paul, 377, 378–80, 381, 384, 385, 393 Voznesensky, Nikolai, 338 Wagner, Senator Robert F., 209–10, 212, Waley, Sir David, 126, 128, 138 Wall Street Crash (October 1929), 39, 66, 77, 80, 87, 91, 396 Wallace, Henry, 326–7 War Refugee Board, 301 Washington, 112, 129–30, 324–5; heat of summer in, 6, 293–4, 328; as location of new institutions, 345, 347, 353 Washington Committee for Democratic Action, 154 ‘Washington Consensus’, 398–9 Welfare systems, 39, 75–6, 371, 388, 390; British welfare state, 6, 102*, 109, 129, 308, 323, 333, 365, 366 Wentworth, John, White, Anne (Anne Terry), 29, 78–9, 154, 157, 158 White, Harry Dexter: academic education, 42.73–4, 76–8; Acheson and, 194; as American executive director of IMF, 340, 341, 349, 352–3, 356, 361; as anti-British’, 125, 136, 192; appearance of, xvi, 26–7, 73; appears before House Un-American Activities Committee, 358–60; on appeasement policy, 95–6; Atlantic City pre-drafting and, 166, 168–9, 183–5, 186–98; background and early career, xvi, 27–8, 29.42.73–4, 76–8; BIS and, 95, 166, 270, 271, 390; sings ‘the Bretton Woods Song’, 254; briefs US delegation, 206–7, 210–12, 406; Britain’s sterling debts and, 134–5, 178, 192–3, 219, 373–4; British WW2 finances and, 107, 115; burden of work at conference, 267; as chairman of Commission 1, 185, 190, 216, 265–6; character of, xvi, 73, 79–80, 145, 240, 307; contingency planning for German victory (1940), 103; death of (16 August 1948), 360; dollar standard and, 243–4; as emissary to London (1935), 84–5; end of life misgivings over Bretton Woods, 362–4, 376, 407; fall from influence under Truman/Vinson, 316, 328, 339–40, 342, 345; fears ‘inevitable’ nuclear war, 353–4; Final Act and, 290, 298; The French International Accounts 1880–1913 (PhD thesis), 76–7; on French withdrawal threat, 227; gold standard and, 55–6, 169, 179–80; gold value of the dollar and, 362–3, 375; ‘gold-convertible exchange’ term, 149, 179, 210, 243–4, 245–6, 376, 390; heart problems, 314, 358, 360; IMF quotas and, 223–4, 227, 231–2, 370; international currency idea and, 121, 122, 130, 132–3, 139–40, 243; issue of conference venue, 6; Jewish background of, 8, 29, 39, 73; journalists and, 203; on Keynes, 115, 238; Keynes and, xvi, xxiv–xxv, 329, 368–9, 376; Keynes and (face-to-face meetings), 85, 86, 135–6, 144, 145–7, 240, 307, 348–50; Keynes on, 194–5, 196–7; Keynes plan and, 135, 138; ‘Keynsian’ views of, 77–8; Kol’tsov and, 198, 249–50; left wing politics of, 42–3, 158–9, 161–2; location of new institutions and, 268, 269; marriage and family, 29, 73; Morgenthau demands to be kept informed, 187–8; Morgenthau Plan and, 301–4, 305–6, 307; as Morgenthau’s right-hand man, xiii, 79–80, 121–2, 184, 187–8; not given IMF presidency, 343; planning for post-war system during WW2, 103; pleading of national politics by, 193, 211; press conferences and, 259; prevents constraints on creditor nations, 140–1, 171–2, 210, 331, 385; ratification campaign and, 291, 298, 299, 300–1; Redevelopment Bank plan (World Bank), 131, 133, 139–40, 148, 189, 238–9; resigns from IMF and moves to private sector, 356–7; returns from WW1, 37–8, 39; rise within Treasury, 78–80; in Savannah for IMF inaugural meeting, 348–50; service in WW1, xvi, 29, 30; silver and, 261, 262; Soviet Union and, xxiv, 78, 149, 150, 151–2, 162–4, 274, 302–3, 335, 337, 339; Stabilisation Fund (IMF) proposal, 131, 136, 139, 144–5, 147–8, 149, 170, 171, 210–12; status of at conference, xviii; structure of conference and, 215–17; style of chairmanship, 237; as suspected Soviet spy, 152–61, 340–2, 358–60, 361–2, 407; tensions with State Department, 85, 133–4, 185, 194; White plan, 122, 123–4, 130–3, 134–5, 136, 137, 138–41, 144–5, 147–9, 179, 185, 295; White plan (Atlantic City draft), 168–71, 179, 186–8, 190–1, 195, 217; work in settlement houses, 38–9, 41–2 White, Nathan, 39 White Mountains, 2, 3,215, 255, 386 Wilson, Harold, 373, 382 Wilson, Sir Horace, 126 Wilson, Woodrow, 7, 28, 52, 86, 162, 168, 290; Fourteen Points, 26, 43, 45; Keynes on, 49–50, 51; Paris peace conference (1919) and, 43–4, 45, 46, 49–50, 51 Winant, John, 114, 135 Wood, Sir Kingsley, 111, 314 Woolf, Leonard, 43* Woolf, Virginia, 68–9, 71 World Bank, xix, xx, 175, 178, 262–3, 335, 338, 343, 355–6, 369, 408; Keynes and, 180–1, 189–90, 195, 237–40; location of headquarters, 172, 193, 240, 268–70, 345, 346, 347; Marshall Plan marginalises, 357, 372; name of, 180*, 181, 239–40; quota sizes, 266, 273–5, 279–80; US view on, 238–9, 342; ‘Washington Consensus’, 399; week two of conference and, 216–17, 237–40; White disappointed by, 363; White’s proposal (Redevelopment Bank), 133, 139–40, 148, 189, 238–9 World Trade Organisation, 372 Wyckoff, Cecelia, 259 Yalta summit (1945), xxii, 353 Young, John Parke, 185, 194, 274 Yugoslavia, 172, 231 Zhou Xiaochuan, 402–3 Zlobin, Ivan, 250 About the Author Ed Conway is the economics editor of Sky News Previously he was economics editor of theDaily Telegraph and Sunday Telegraph He is the author of 50 Economics Ideas You Really Need to Know, which was an Amazon bestseller and has been translated into thirteen languages He lives in London, where he was born in 1979 THE SUM M IT Pegasus Books LLC 80 Broad Street, 5th Floor New York, NY 10004 Copyright © 2014 by Ed Conway First Pegasus Books hardcover edition February 2015 All rights reserved No part of this book may be reproduced in whole or in part without written permission from the publisher, except by reviewers who may quote brief excerpts in connection with a review in a newspaper, magazine, or electronic publication; nor may any part of this book be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or other, without written permission from the publisher ISBN: 978-1-60598-681-4 ISBN: 978-1-60598-744-6 (e-book) Distributed by W W Norton & Company, Inc