(QUOTE) "It is our common aspiration, I believe, that, assembled here among these eternal hills, we shall, under a deep conviction of the needs of humanity, discard trivia and refuse to be turned away from our great purpose to give to the people of the world new hope and courage through the constructive results which we pray may come from this historic conference. . . .

Every great effort in human history has had its saboteurs, men who utter critic peep and cynic bark. There are some of these around the perimeter of this Conference.

As we confer together here today, amidst the eternal hills, inspired by the sublime beauty around us, and as the shadows of passing clouds above leave their impress for a moment on the slopes of yonder mountains, may the contemplation of the tragic sufferings and sacrifices of every nation bind us together in brotherly love.

Two thousand years ago Christ was hanged on a cross, a spear thrust in his side.... There are nations represented here today, who too, have had their sides pierced and a crown of thorns pressed upon them by the sufferings of war ........

Gentlemen, we must not, we cannot, we dare not fail. The hopes and aspirations of the common people of each of our countries  rest in us". (END QUOTE)

And thus the stage, and the challenge, was set for the 44 participating nations.

John Maynard KEYNES of the United Kingdom and
Harry Dexter WHITE of the United States of America

BRETTON WOODS CONVENTION

Following World War 2, a group of 130 of the western worlds most accomplished economic, social and political minds representing some 44 nations, met in upstate New Hampshire at a small vacation town called Bretton Woods. John Maynard Keynes, the man who had predicted the catastrophe in his book, The Economic Consequences of the Peace, written in 1920, was about to become the principal architect of the post-World War II reconstruction. Keynes presented a rather radical plan to rebuild the worlds economy, and hopefully avoid a third world war. This time the world listened, Keynes and his supporters were the only ones with a plan that in any way seemed grand enough in foresight and scope, to have a chance at being successful. Yet Keynes had to fight hard to convince those rooted in conventional economic theories and partisan political doctrines to adopt his proposals. In the end, Keynes was able to sell about two-thirds of his proposals through sheer force of will and the support of the United States Secretary of the Treasury, Harry Dexter White.

They knew, that unless the economies and infrastructure of Europe and Asia were re-built to great strength, there existed the smouldering risk, of another World War, and this fundamental logic produced the Marshall Plan.

Marshall Plan - IMF - World Bank - Bank for International Settlements 'BIS'

Bretton Woods produced - Marshall Plan, Bank for Reconstruction & Development (i.e.) The World bank, The International Monetary Fund 'IMF' and the Bank for International Settlements 'BIS'. These four would re-establish and revitaise the economies of the western nations. The world bank would borrow from rich nations and lend to poorer ones. The IMF working with the World bank through a pool of funds, and controlled by a Board of Govenors, would initiate currency adjustments and maintain exchange rates among national currencies within defined limits. The bank of International Settlements would effectively act as a bank to the world.

The IMF was to be a lender to the central banks of other nations experiencing a deficit in the balance of payments, the IMF provided currency, which allowed the country to remain in business until its export base achieved a positive balance of payments, and the central bank could repay. If there was an protracted economic downturn the IMF would stand ready to make another loan.

Bank of International Settlements ' BIS '

The BIS was created as a new central bank to the central banks of each nation. It was organised along the lines of the US Federal Reserve System and its principal role was the orderly settlement of transactions among the central banks of the nations. It also set standards for capital adequacy ratios, and coodinates the orderly distribution of sufficient currency supply, necessary to support International trade.

The BIS is controlled by the Basel Committee, which comprises Ministers sent from each of the G-10 Nations central banks. These ministers operate in similar fashion to the New York Federal reserve person controlling the open market desk.

World Bank

The world bank, which is organised along more traditional lines, was formed to be a lender to the world, initially to rebuild the infrastructure, manufacturing and service sectors of the European and Asian economies, and ultimately support the development of Third World countries and their economies. Depositirs to the world bank are nations rather than individuals, however the bank's 'ripple system' uses the same general banking principles that have proven effective for centuries.

The Tie that Binds - The World Bank and Bank for International Settlements

The Directors of both Banks, are controlled by ministers from each of the  G-10 countries,  which was formed when; Belgium, Canada, France, Italy, Japan, the Netherlands, United Kingdom, the United States and the central banks of two others Germany and Sweden, agreed to make resources available to the IMF for drawings by participants and under certain circumstances drawings by nonparticipants. The General Agreement on Borrowing GAB was strengthened in 1964 by the association of Switzerland, then a nonmember of the Fund, but the name of the G-10 remained the same. The following international organizations are official observers of the activities of the G-10: The Bank for International Settlements (BIS), European Commission, IMF, and OECD.

Although Bretton Woods has changed much since 1947, the world coming off the Gold Standard (a master stroke of genius by then President Nixon) to name one, the fundamental essence of this convention still serves the worlds banking system well today, underpinning trade in most everything from Government issued Securities, other Investment Grade Securities and trade in Commodities, Precious Metals, T/Bills, Oil, Medium term Notes, and so on.