On This Day - What happened 1 July 1944 AD

The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During the Great Depression, countries sharply raised barriers to trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade. This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in Bretton Woods, New Hampshire, in the United States, to discuss a framework for postwar international economic cooperation and how to rebuild Europe.

The conference was held from July 1 to 22, 1944. Agreements were signed that, after legislative ratification by member governments, established the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF).

Early in the Second World War, John Maynard Keynes of the British Treasury and Harry Dexter White of the United States Treasury Department independently began to develop ideas about the financial order of the postwar world. (See below on Keynes's proposal for an International Clearing Union.) After negotiation between officials of the United States and United Kingdom, and consultation with some other Allies, a "Joint Statement by Experts on the Establishment of an International Monetary Fund," was published simultaneously in a number of Allied countries on April 21, 1944. On May 25, 1944, the U.S. government invited the Allied countries to send representatives to an international monetary conference, "for the purpose of formulating definite proposals for an International Monetary Fund and possibly a Bank for Reconstruction and Development." (The word "International" was only added to the Bank's title late in the Bretton Woods Conference.) The United States also invited a smaller group of countries to send experts to a preliminary conference in Atlantic City, New Jersey, to develop draft proposals for the Bretton Woods conference. The Atlantic City conference was held from June 15–30, 1944.