The Money Makers by Eric Rauchway

Author:Eric Rauchway
Language: eng
Format: epub
Publisher: Basic Books
Published: 2015-08-20T22:14:30+00:00

A week later, on Sunday morning, December 14, 1941, with the US officially at war with both Japan and Germany, Morgenthau called White and asked him to draw up a plan for a stabilization fund “for actual and potential allies” and also to provide the basis for “a post-war ‘international currency.’” Within a few days, Morgenthau would start joking that he had designated White his “Minister of Foreign Affairs,” and White would in turn promise to start wearing tails, like a proper diplomat.67

The war brought White a significant increase of responsibility but it was, as ever for him, the responsibility to execute, not to envision. Throughout the summer, Morgenthau and Roosevelt had dealt with Keynes as Churchill’s delegate. Now Morgenthau had effectively appointed White as Keynes’s counterpart. White was better with figures and economic principles than either Morgenthau or Roosevelt, but unlike Keynes he would not set the agenda for his nation’s monetary policy, because Roosevelt had already done it. In the gold crisis of 1933, Roosevelt envisioned an international currency along Keynesian lines, and management of the dollar became a tool for use in domestic policy. With the Exchange Stabilization Fund and the agreement with Britain and France in 1936, the US sought both international stability and domestic prosperity.

The Depression had provided the Western industrial powers with the motive and the knowledge to make the necessary arrangements to use their currencies for recovery. The war provided the same nations, now allies, with the pressure to use their currencies for victory. With the telephone call from Morgenthau, White began drafting his version of the international system that Keynes in principle and the Roosevelt administration in practice had already developed, with the idea that it could—like the Atlantic Charter—become a program for the prosperity of all the men in all the lands.

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