The Bretton Woods Conference of 1944

In July 1944, while the Second World War was still being fought, delegates from 44 Allied nations met at the Mount Washington Hotel in Bretton Woods, New Hampshire, to design a new international monetary order. The leading figures were Britain's John Maynard Keynes and the US Treasury's Harry Dexter White.

Keynes proposed an international clearing union with its own currency, the 'bancor', which would pressure both deficit and surplus countries to adjust; White's more modest plan, reflecting America's position as the world's dominant creditor, largely prevailed. The agreement created the International Monetary Fund to oversee exchange rates and lend to countries with payment problems, and the International Bank for Reconstruction and Development, later part of the World Bank.

Currencies would be pegged to the dollar, and the dollar convertible into gold at $35 an ounce. The aim was to avoid the competitive devaluations and trade collapse of the 1930s.