The Battle for Bretton Woods: America, Britain and the International Financial Crisis of October 1967-March 1968

Abstract

Previous accounts of American foreign policy in the 1960s have argued that the financial crisis of October 1967-March 1968 marked the beginning of the decline of American influence in world affairs. In the specific context of Anglo-American relations, some studies have also emphasized that a relationship famed for its intimacy in international monetary policy was now becoming increasingly distant. Through an examination of Anglo-American economic relations during the international financial crisis of 1967-68, this article contends that whilst the financial difficulties of the late 1960s were clearly an unwelcome development for the United States, its ability to shape and influence the conduct of its allies in international monetary affairs had not been seriously damaged. Moreover, although the close economic relationship between Britain and the United States would later be dramatically affected by the financial shocks of the 1970s and British membership of the Common Market, during the devaluation and the ensuing gold crisis of 1968, the two countries had continued to work closely together to shore up the foundations of the international monetary system.