MAY 21, 1945
HYDE PARK, Sunday—Some of my friends are very much exercised because they fear that the Bretton Woods plan will not go through. This financial plan frightens many people purely because it is a financial plan and they think they cannot understand it.
Two hundred financial experts, representing 44 nations, met together at Bretton Woods in New Hampshire last summer for several weeks and agreed on this plan after much discussion and, naturally, some compromise. The main feature is the stabilization of currencies all over the world for the benefit of international trade.
How is this done? Through a world bank and a monetary fund. The bank will have a capital of $9,100,000,000, to which every nation contributes in proportion to its wealth. Our share is $3,175,000,000. Voting power and control correspond to contributions. The bank will approve and guarantee loans for reconstruction and development of countries ruined by the war.
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Some foolish people will ask: Why do we have to concern ourselves with the development and reconstruction of the ruined countries? The answer is simple. We are the greatest producing country in the world. We need markets not only at home, but abroad, and we cannot have them unless people can start up their industries and national economy again and buy from us. If Europe or Asia falls apart because of starvation or lack of work for their people, chaos will result and World War III will be in the making. In that event, we know that we will have to be a part of it.
Why do we need a monetary fund? This fund is an international stabilization pool of $8,800,000,000, to which we contribute $2,750,000,000. Members may borrow from it, to the extent of 25 percent of their own contributions in any one year, in order to stabilize their currency.
We need to stabilize currencies throughout the world because in the past there has been much speculative trading in currencies. Economic warfare results, and in time this brings us to shooting warfare. The simple way to look at it is this: If you want to sell goods in Holland, and their currency is depressed between the day that they agree to buy and the day they actually pay for what they buy, they are unable to buy because it costs them too much. The outcome is either that we lose our markets, or we are paid the amount we bargained for in money that does not have the value we expected it to have—which is a loss to us as individual merchants or traders. Consequently, we need both the bank and the fund for our own security, as well as for that of the rest of the world.
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You can write your Senators and Representatives and tell them how you feel about this. Whether you are a farmer or a merchant, whether your business is big or little, you are personally affected by it. Even if you don't sell directly to a foreign country, you are indirectly affected—for the prosperity of the country means your prosperity, and we cannot prosper without trade with our neighbors in the world of tomorrow.