Rep. Marcy Kaptur (D-OH) advised in an interview with Bill Moyers— to stay in their homes and leave the burden of proof for the banks to prove to the courts that they indeed own the mortgage. Similarly, when arguments over whether responsibility lay with the feds or the banks dominated every nuance of the discussion, another more fundamental question appeared–how did the dollar become the international trading currency? This currency question wouldn’t go away– in part, because I didn’t know how to answer it, but mostly because my frustration was a result of the internet sites that mostly obfuscated the history. Every attempt to define this question did so as a rallying cry for celebrating free-markets– explanations like: the US currency was strong and so in 1944 during Bretton Woods all the countries adopted the dollar as the trading currency; or countries were bankrupted because of the war which resulted in the dropping of the gold standard, or just as reasonably, on the other end of the -uh- political spectrum, the dollar’s position was a result of some occultish banking/Federal Reserve conspiracy that leads back to Madame Blavatsky or the Rothschilds. For such a fundamental question, how is it that so little is written about how the dollar became the international trading currency– rather, how is it that we take the strength of the dollar, or the fortitude of American enterprise so much for granted? Although I’m sure there are many academics and economic/foreign policy historians that can adequately explain this process within the context of counterpart funds, or the U.S. transition from Depression-era foreign-owned debts to postwar territorial assets, I am not convinced that one can look at the historical context of how the dollar became the international trading currency and suggest that our present economic policy is still viable. Is it just desperation that defends our federal economic system without exploring a kind of radical paradigm shift that may be both more internationally inclusive and sustainable? Centralizing industries and debt-plagued states are literally bankrupting us to buy more time to solve outdated problems while we raise the ceiling of our national debt in the expectation that the old paradigm still works. It begs to question why our best economic minds are practicing necromancy rather than encouraging it to evolve organically within some other alternative and creative financial discourse. Some personal background– considering that the collapse of the financial markets all occurred while Hawaii was preparing to commemorate it’s 50th anniversary of statehood, my attention was primarily focused on the discussion surrounding Hawaii’s routes of independence through the options of either de-occupation, decolonization or through the UN Declaration on the Rights Indigenous Peoples. This attention required immersion into Hawaii’s Kingdom, Republic and Territorial history; international labor; U.S. State Department and Congressional policy from 1898, when Hawaii was occupied as a base during the Spanish-American war; and 1946, when Hawaii was officially put on the U.N. list on Non-Self-Governing Territories (NSGT). Granted, post-war U.S. economic policy might have had little to do with the 1959 Hawaii Statehood Act, but whether approaching statehood through international labor (which played a substantial role), the United Nations, WWII, or through economic commerce and trade, all these roads lead to Postwar Foreign Policy Preparation. Researching how the dollar became the international trading currency was a proverbial stones throw from Hawaii’s surreptitious removal from the UN list of NSGT because much of it is connected to the same sources and departments concerned with Postwar Planning and the results of that plan. This is a not a difficult story, simply another approach towards discussing U.S. economic policy strategies and these are four the pillars upon which this series of articles rests, each of which is not without controversy, further discussion, and professional circumspect:
- The postwar 1946 Employment Act establishes the objectives of Employment, Production and Purchasing Power as a new paradigm for the U.S. economy. (go to article)
- The 1948 Economic Cooperation Act, arguably an extension of the Lend/Lease Act and a precursor to the 1951 Mutual Security Act, is central to the establishment of the dollar as the international trading currency between “cooperating” nations, in part, through a process called counterpart funds.
- The 1943 Committee on Post-War Foreign Economic Policy and the establishment of the 1944 Bretton Woods Agreement helps to establish the mechanism through which international economic cooperation takes place. When we look at the substantial deposits of foreign gold and assets invested in the U.S. during the Depression as part of an international effort to help with U.S. recovery, and then the subsequent financial collapse of Europe as a result of WWII, a new international financial trust is created through the 1943 United Nations Relief and Rehabilitation Administration (UNRRA) and the Bretton Woods Agreement the following year, and shortly after the formation of the World Bank and the General Agreement on Tariffs and Trade.
- Chapter XI of the U.N. Charter, the Declaration regarding Non-Self-Governing Territories– specifically the UN resolutions that followed (UNGAR, 222, 742), marks the end of the colonialist system and establishes international rights for self-determination (UNGAR 1514). This includes the influence of the International Labor Organization (ILO) as one of the dominant Specialized Agencies in the United Nations– specifically the role the transport unions of the World Federation of Trade Unions (WFTU) played in encouraging independence for territories, while the rise of the International Congress of Free-Trade Unions (ICFTU), was created in part, to maintain the colonialist system and ensure the objectives outlined in the 1951 Mutual Security Act .