Business Adventures: Twelve Classic Tales from the World of Wall Street

by John Brooks

Ultimately, it appeared, the nation had just three possible economic courses: to somehow end the Vietnam war, root of the payments problem and therefore heart of the matter; to adopt a full wartime economy, with sky-high taxes, wage and price controls, and perhaps rationing; or to face forced devaluation of the dollar and perhaps a depression-breeding world monetary mess. Looking beyond the Vietnam war and its incredibly broad worldwide monetary implications, the central bankers went on plugging away. Two weeks after the stopgap solution of the dollar crisis, those of the ten most powerful industrial countries met in Stockholm and agreed, with only France dissenting, on the gradual creation of a new international monetary unit to supplement gold as the bedrock underlying all currencies. It will consist (if action follows on resolution) of special drawing rights on the International Monetary Fund, available to nations in proportion to their existing reserve holdings. In bankers’ jargon the rights will be called S.D.R.’s; in popular jargon they were at once called paper gold. The success of the plan in achieving its ends—averting dollar devaluation, overcoming the world shortage of monetary gold, and thus postponing indefinitely the threatened mess—will depend on whether or not men and nations can somehow at last, in a triumph of reason, achieve what they have failed to achieve in almost four centuries of paper money: that is, to overcome one of the oldest and least rational...