Bretton Woods, New Hampshire (USA) is a stunningly beautiful area. Psychologically far away from the concrete jungles of Boston and New York, it proved to be the perfect place for delegates from 44 Western aligned nations to hammer out an epoch-making agreement on the world economy over the first three weeks of July in 1944..
As the globalized financial system has edged toward collapse on numerous occasions recently, President Sarkozy of France, Prime Minister Gordon Brown of the UK and President Bush of the United States have forwarded the idea of convening a sequel to the landmark conference of 64 years ago.
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Since that time, when Allied armies were busy taking back France from Nazi occupation, the financial world has become more complex and contains a seemingly untold number of actors and variables. Presumably, representatives to Bretton Woods II, whether it be in Washington DC, Tokyo or in various capitals, would be poised to set parameters on lending, borrowing, capitalization of banks and stock trading to avoid another economic meltdown.
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The Bretton Woods Conference of 1944 was historically momentous for several reasons. By establishing the International Monetary Fund (IMF), the World Bank and the International Bank of Reconstruction and Development (IBRD), it not only steered the free world toward managed capitalism but also signalled the end of the British Empire's reign on the global economy. America would eclipse the greatest nation since the Roman Empire where the sun was said to never set. Ultimately, the 'arsenal of democracy' had translated into the arsenal of international finance.
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Beyond establishing several regulatory institutions, Bretton Woods launched a viable system of currency exchange whereby major non-American currencies were pegged to the US dollar within a fluctuation maximum of 1% above or below its value. This practical stabilization measure lasted until US President Richard Nixon took his country off the gold standard in 1971. Henceforward, the US Treasury Department has acted to secure the value of the US dollar.
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Who is credited with successfully orchestrating Bretton Woods and its landmark agreements? Most historians rightly mention the names of key heads of state, but a significant figure, who has been rarely accorded his due, deserves first consideration.
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Conventional wisdom among historians of the United States suggests that 'Franklin Roosevelt was his own Secretary of State'. While true in some respects, it grossly underestimates the role of Cordell Hull - not only the Secretary of State but the longest serving Secretary of State in American history (1933-1944). Obscured by the wide, towering shadow of FDR, Hull is seldom if ever mentioned as one of the greats to lead the Department of State. From his early accomplishments to championing Bretton Woods, a reappraisal is long overdue.
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Similar to Abraham Lincoln, Hull came into the world inside a log cabin. From a modest background in Tennessee, he earned a degree in law from a state university and went on to serve in the US House of Representatives for 22 years. In only his third term, Hull was one of the principle authors of the new federal income tax of 1913. After being elected to the Senate in 1930, he was offered the position of Secretary of State three years later by FDR.
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Although Hull largely receded into the background, he did not leave his unprecedented 11 year tenure at State before changing the course of modern history. One year prior to the D-Day invasion, Hull assembled a team to forge the basis of the UN Charter and received the Nobel Peace Prize two years later for his laudable efforts. Despite his work, most Americans and many historians are unaware that FDR considered him 'the Father of the United Nations'.
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Equally important, however, was his firm support for the Bretton Woods Conference to establish a set of free trade rules to obviate rivalries and potential hostilities between nations competing for resources and power. Hull rightly perceived economics, particularly inflation and scarcity, as principle causes to the rise of Nazi Germany and Imperial Japan, and his perspicacious worldview and excellent statesmanship have served the world far beyond his death in 1955.
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Considering the frequency of G-8 summits, one might ask how the recent financial implosion could have occured. It is very possible that the current crop of Western leaders simply do not have a Cordell Hull to chart a clear path away from crisis.
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J Roquen