The International Position of the Dollar in a Changing World

Peaceable relations between states require that each nation affected by another's acts be induced to acquiesce in all those acts, but this acquiescence may take many forms. It may be quite positive, involving affirmation and, at times, concerted action, or it may be negative, involving mere silence or pro forma protest and, most importantly, total abstinence from countervailing acts. Economic and financial relations between states display all forms of acquiescence and too often demonstrate the sad results of failure to obtain consent. Their history, however, manifests gradual progress from an erratic reliance on tacit consent to a wide-ranging reliance on positive, explicit undertakings frequently accompanied by concerted action. Increasingly, moreover, that concerted action has been multilateral, not just bilateral. The tariff warfare of the twenties and earlier decades has now given way to the formal regulation of tariff policies, and the bilateral trade agreements of the 1930's, covering exclusively tariff reductions, have been replaced by a single comprehensive multilateral arrangement, the General Agreement on Tariffs and Trade (GATT) dealing with all aspects of commercial policy. The competitive exchange-rate depreciations of the thirties have likewise given way to formal regulation, beginning with the Tripartite Declaration of 1936 involving the United Kingdom, France, and the United States and culminating in the Articles of Agreement adopted by the Bretton Woods Conference of 1944 establishing the International Monetary Fund (IMF).