Abstract
In recent years, there has been intense speculation about the future role of the US dollar and its continued viability as a reserve and trade currency. This thesis examines post-war planning conducted by the United States between 1939 and 1945, focusing on how the US dollar became the world’s reserve and trade currency. World War II gave rise to new institutions and conceptions of how the post-war economy and politics should function. Planners from the US State Department and Treasury were profoundly informed by the events of the interwar period, 1919–1939. Motivated by a concern to prevent interwar instability from occurring after WWII, they set about designing plans to ensure this outcome. Open and liberal trade would define how post-war economics would be conducted.This thesis argues that concerns surrounding commodities, the balance of payments and post-war relief and reconstruction were major factors in the post-war status of the dollar. Archival documents from the Foreign Relations of the United States (FRUS) series, the Council on Foreign Relations (CFR), the UK Parliamentary Papers and the Harley Notter file demonstrate these three concerns were critically connected with the emergence of the US dollar and its new post-war role. Commodities feature from the earliest stages of planning. Commodities and their military use and, later, their need for reconstruction were a major source of planning concern. It is also vital to understand the balance of payments. The US was able to leverage its economic strength after the war to create a global trading system that could sustain demand in a post-war world. Foreign nations would first need US dollars to buy and sell goods from the US. This necessarily raised concerns over the scale of the US economy compared to others and the economic implications of this. Regulating the balance of payments and currency stability necessitated international institutions aimed at facilitating global trade. This was a profound concern of policymakers in the US Treasury and State Department and many Allied nations. As early as 1942, what would become the International Monetary Fund (IMF) and Bank for Reconstruction and Development would be aimed at this end. These institutions would be implemented at the Bretton Woods Conference in June 1944. Relief aid played a significant role in internationalising the use of the dollar. As the largest economy in the world at the end of World War Two, the US played 6 a leading role in rebuilding Europe and Japan, including caring for refugees. The aid took the form of grants and credits. Grants were considered gifts and did not require repayment. In contrast, credits were considered loans, thus requiring repayment. This assistance spanned four broad categories: military aid, relief, recovery, economic aid, and technical assistance.1 Commodities would be needed to rebuild and restart economies on a peacetime basis. This would require easy access to and trade in these commodities. The US was the largest supplier of post-war relief aid and financing for this purpose.
This thesis contributes to the existing literature on the emergence of post–World War II US power by highlighting the abovementioned factors. The central questions are how and why the US dollar emerged as the world’s reserve and trade currency and how it constructs US power.
| Date of Award | 2025 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Peter Mauch (Supervisor) |