Monetary Relations between Europe and America

Abstract

The monetary history of the past century can be conveniently divided into three periods : the sterling-dominated gold standard prior to the First World War, the dollar-dominated gold standard following the Second World War, and the transition period in between (1914 to 1945). The transition period saw the attempt to restore sterling in 1925, the separation of sterling from gold in 1931, and the rise of the dollar to international status after devaluation in 1934. The post-war system has been dominated by the United States. The monetary order established at Bretton Woods in 1944 created a code of conduct for the adjustable peg system in addition to a multilateral credit facility, but it was the interaction of national power rather than the International Monetary Fund that dominated the form into which the post-war system evolved.