Bretton Woods Agreements Act

Bretton Woods Agreements Act (1945)

1) Link to the Text of the Act
Read the statute (22 U.S.C. §§ 286–286mm)

2) Why It Was Done
Enacted to approve U.S. participation in the Bretton Woods Conference agreements of 1944, which created the International Monetary Fund (IMF) and the World Bank. The goal was to stabilize exchange rates, promote international trade, and rebuild the global economy after World War II.

3) Pre-existing Law or Constitutional Rights
Before this Act, the U.S. had no formal role in a permanent international monetary system. The Constitution gave Congress authority over money and treaties, but this Act delegated substantial power to the executive branch in international finance.

4) Overreach or Proper Role?
Supporters saw it as essential for postwar recovery and leadership in global finance. Critics argued it ceded too much U.S. sovereignty to international institutions and limited Congress’s direct role in monetary policy.

5) Who or What It Controls

  • U.S. Treasury & President (authorized to participate in IMF and World Bank)
  • IMF (stabilization of exchange rates)
  • World Bank (loans for reconstruction and development)
  • Member Nations (tied to the U.S. dollar–gold standard exchange system)

6) Key Sections / Citations

  • 22 U.S.C. § 286a: Authorization for U.S. to join the IMF and World Bank
  • 22 U.S.C. § 286c: U.S. Governor and Alternate Governor roles in IMF/World Bank
  • 22 U.S.C. § 286e: U.S. financial commitments (subscriptions to IMF/World Bank)

7) Recent Changes or Live Controversies

  • The Bretton Woods system collapsed in 1971 when President Nixon ended dollar convertibility to gold.
  • The IMF and World Bank continue to operate, though often criticized for structural adjustment policies and their impact on developing nations.
  • Congress periodically reviews and funds U.S. commitments to these institutions, keeping the Act relevant.

8) Official Sources