The Road to Bretton Woods: International Monetary Policy and the Public Servant

The Road to Bretton Woods: International Monetary Policy and the Public Servant J. L. GRANATSTEIN During the Second World War, Canada altered more dramatically than in any comparable period in its history. There was full employment, a startling change after ten years of depression and one that brought relative prosperity to all parts of the land. Overseas, the armed forces had developed into vast and powerful organizations, collectively making Canada, despite its ten millions in population, probably the fourth military power on the Allied side. And all through the war, industry poured out an impressive array of material, far too much for Canada's forces to absorb on their own. The Canadian people freely gave away billions of dollars in goods to their allies, and in return Canada began to achieve a status and influence that would have been almost unimaginable in 1939. The alterations that the war produced were shaped by the government of Mackenzie King. Gifted with a very strong Cabinet, King directed Canada's war and merits much of the credit for the results. But underneath the political level, with its obsessive concerns over conscription and worries about coming elections, were the civil servants, the initiators and implementers of the nation's policies. If Canada had been changed by the war, so too had the Canadian public service. The war brought new men and women to Ottawa to staff the great bureaucracies created by the Departments of National Defence, Munitions and Supply, and National War Services, and to work in established departments such as Finance and External Affairs. For the first time, the civil servants had an opportunity to spread their wings; the change in Canadian power gave them an opportunity to perform on a larger stage. Men such as Lester Pearson, Hume Wrong, Norman 174 Robertson, Clifford Clark, Robert Bryce and Louis Rasminsky found that the war gave them their chance, and they took it. Important questions of diplomacy, mutual aid, the creation of new political and financial structures for the world little was foreign in those days, and if one was able there seemed no limits. One who was able was Louis Rasminsky, and this paper examines his efforts in helping to shape the new international monetary structure that culminated in the creation of the International Monetary Fund at Bretton Woods, New Hampshire in the summer of 1944. I Born in Montreal in 1908, Louis Rasminsky grew up in Toronto where his father had a wholesale electrical products distributing business. The family was not poor, but there was never enough money, and when the son won all the prizes at Harbord Collegiate, including a tuition scholarship to the University of Toronto, there was almost certainly as much relief as pride. At the University, Rasminsky's scholarly career blossomed. He took courses in Economics and battled for standing with his good friend and later colleague, A.F.W. Plumptre. The graduating class in Economics of 1928, one of its professors, V.W. Bladen, later recalled, was a vintage year, the best students in it meeting regularly and informally at the Plumptre house to argue with and to learn from each other.I The competition was fierce but friendly, and in 1926 Plumptre placed first in the group with first class honours (or 1.1) while Rasminsky was second (or 1.2). The next year Rasminsky was 1.1 and Plumptre 1.2, and in 1928 both graduated tied as 1.1. The Massey Scholarship in Economics, however, went to Plumptre who proceeded to Cambridge University to study under John Maynard Keynes. For Rasminsky, there was nothing. At this point, one account has it, Professor Gilbert Jackson of the Toronto Department of Political Economy called on a Toronto rabbi to say that if Rasminsky had been an Anglican, he would have made this call on the Anglican Bishop of Toronto. But "as he is a Jew, I come to you. Revue d'etudes canadiennes Vol. 16, Nos. 3&4 (Automne-Hiver 1981 Fall-Winter) It would be a disgrace if your community didn't give this boy the opportunity for graduate study." Within days, so this story goes, enough money to provide a fellowship for a student of the...