The End of Solidarity
(I am doctor Eduardo Suarez, and I present to you some of my most candid journal writings from my time as Mexican Minister of Finance, a post which I held from 1942 to 1944. Contained within are writings kept during the Bretton Woods Committee of 1944.)
We have been driving for about 4 hours, traveling east from New York City. I guess it was noon when I landed, but it’s hard to say with the overcast sky. I have been sweaty, agitated and fatigued since I landed on a red eye from Mexico City. I have not eaten, slept, or urinated since leaving my house at 914 Marcos Carrillo Drive. After passing through customs I met up with the escort driver, and jumped into the back seat of a black Cadillac with a small selection of international delegates.
On my right is John Maynard Keynes, the British representative. Forever calm and collected, he speaks with a slow cockney drawl no matter how many brandy and sodas he has consumed. He sits in the darkened corner of the limousine reading today’s ‘New York Times’.
On my left is Holger Frei, the Swiss representative. Tall and lean in his old age, his flowing moustache of white hides a bucktoothed smile. Holger tells me he recently spent time in Greece, talking with the military leaders about potential invasions into Russia. He says they are scared. Small talk descends into silence as the hum of the tires captivates. The chauffeur meanders through lowland meadows, and the scent of lavender wafts through the opened window and calms my oncoming headache.
730 delegates from 44 countries have accepted an invitation from American President Franklin Delano Roosevelt to attend an International Economic Conference. The American and British governments have called this meeting to try and set an international system of economic transactions. The great Depression of 1929 was felt very strongly in Mexico; especially for the farmers. Then the Second World War began, and though factories are churning out machinery and material for the war effort, national economies are running up increasingly high debts. The hope is that international bodies will prevent the running up of debt and the preponderance of international conflict. My mandate, handed down from the presidential office, is to fight for the creation of a standardized currency rate, and for lowering the import rates on American commodities.
I know these are reasonable goals, but I can’t help but feel that this meeting of global figureheads can have much more influence than simply economic structures. I want what’s best for the world, for the poor people in the word, for the children with hopes and dreams that get shattered because families cannot afford bread. With reason and empathy, I believe humanity can move forward in peace and global solidarity.
I turn eagerly to inform Keynes of my plans, but I turn to find the withering form of a man, his head slouched forward into his folded arms. Now’s not the time for economics I suppose.
On the floor of the limo is a tourism pamphlet. “Striking Beauty, Natural Habitats and Endless Adventures Await in the state of New Hampshire” it advertises. Underneath the quote is a picture of a station wagon driving through the hillside with fishing rods, a canoe, and a tent all packed into the car. The license plate reads “Live Free or Die Young”. I am disgusted by the narcissistic tendency in America. In Mexico, the natural beauty of life presents itself in myriad forms each and every day; we have no desire to try and explain the latent power of Mother Nature. Americans, on the other hand, try to constantly remind themselves who they are, and why they are so ‘great’.
II
We pull into the driveway of the chateau, greeted by a small party of American delegates. The bald spot of shimmers in the sunlight. His black beady eyes take all the focus away from his short stature, as he smiles sinisterly towards us in the encroaching vehicle. I take a deep breath and prepare to face the renowned sloganeer-er and Conservative political antagonist, the infamous Secretary of State Harry Dexter White. Ol’ Harry’ (as he is known by his gin sipping chum-buddies) gives each of us a short smile, a firm handshake, and a generic welcoming phrase.
“A yesss Holger, how pleasant to see you again!” he exclaims.
“The pleasure is all mine ol’ Harry” (I guess he’s one of those gin-sippers) “I look forward to relaxing in the beautiful mountains of your country. They rival some of the Swiss Alps in fact!”
“Why thank you Holger, the situation in your country is certainly grave at the moment. Lets make this a memorable meeting in the annals of world history.” Smiles, and Holger moves on.
Harry White addresses me with a broad smile and a pat on the arm. “Greetings! And who do I have the pleasure of meeting?”
“My name is Eduardo Suarez, the Mexican representative. A pleasure to meet you Mr. White. Thank you for inviting us here to your secret utopia. It really is so pleasant”.
“Well how long have you been in office then, my man?” As White asks me he peers over my shoulder at Keynes. They are economic rivals, while I am a newcomer into this world.
“Nearly two years” I respond while still shaking his hand. “By the end of my term I hope to raise the standard of living in Mexico by a full percentage! But, as you know, the global economic situation is simply atrocious. It is such a big obstacle, especially for a country so economically dependent as ours. It is my ambition to start some of the work towards global market comparability here at Bretton Woods.”
Partially surprised by the level of my English, and perhaps taken aback by my ambition, my host took a second to focus his beady eyes. “Well young man, one must make baby steps to create grand change in the world…. I trust you will find yourself at ease in the mountains of New Hampshire.” Mr. White turns to address Mr. Keynes, leaving me and my plan for solidarity merely and afterthought.
The lush scenery and gorgeous architecture of the white stone mansion is invigorating. I make my way into the building with Holger Frei.
“Look” he says, and points to American State agents standing guard around the courtyard, dressed in black, with guns at the ready. “It is hard to feel at ease here already Eduardo”.
“Yes, I wonder if they think we will incite some sort of revolution or so. Do you recall last years’ economic conference in Lake Placid? The mysterious deaths of those Soviet diplomats are still unsolved”.
“American antagonisms may bring this world to pieces.”
We trudge into the marble floored atrium. I peer into the dinning room with its gold-rimmed tables and Baroque chandeliers, and remind myself not to let resentment towards American wealth creep into my speech.
“Care for a drink in the back with the other delegates?”
“O I couldn’t Holger, but thanks anyways. Enjoy the scenery.” I could hear delegation members convening in the back yard, sipping on Martini’s as I make my way up the central spiral staircase.
My room was on the seventh floor in the West Wing. Nineteenth century posters of American politicians hang on the velvet-trimmed walls, and my bathroom is larger than my mother’s kitchen. American wealth. American narcissism. You cannot have one without the other.
III
President Henry D. Roosevelt begins the Committee with a general address: “The economic health of every country is a proper matter of concern to all its neighbors, near and far.”
Three commissions are to be established in order to conduct the work of the Conference: Commission I is charged with formulating the Articles of Agreement of the International Monetary Fund. Harry D. White was to be the chair. Commission II assumed the same responsibility with respect to the International Bank for Reconstruction and Development, and Lord Keynes was to chair. Commission III is to consider other means on international financial cooperation, and I was assigned the chair of this group.
The first two days were very productive. Under my watchful eye, the Commission set down the rules and regulations for the International Trade Organization (ITO).
Only the American delegation was showing opposition. I heard word of representative Cordell Hull engaging other delegates in antagonistic conversation during short breaks; attempting to convince the Australian, Indian, and Polish representatives that working within the American model was the best way forward. Mexican representatives told me that meetings were being set up at late hours in the dungeons of the chateau, where Roosevelt and White were recruiting impressionable delegates from small nationalities like Columbia, Belgium, and even Italy. So that is what the guards are for. American antagonisms…
These secret meetings began to have an effect. By the second week, it became clear that any sort of economic restructuring would have to involve the banks. I saw that I was up against a wallop of economists with very miniscule socialist leanings.
The delegate from Brazil piped in: “Why would we look outside the banks? They have been the sources and havens of money for a long time, and they should continue to act as such. Furthermore, it is the role of the Western industrial powers to help the rest of the world to modernize. In the Latin American context for example, countries like Columbia will be unable to advance without foreign aid.”
The Indian delegate responded: “Well, in the interest of economic prosperity, I can see a problem arising if we put to much faith in the banks. What may happen is that debt becomes part of international trade; debt would be owed to these international banks, and this debt would only make it harder for countries to continue trading and investing. The global structure bank cannot become a loan haven for everybody, because it will only perpetuate in a downward fashion.”
Harry Dexter White, the bombastic American representative, interrupted the Indian delegate and began to ramble … “Unhampered trade dovetailed with peace; high tariffs, trade barriers, and unfair economic competition, with war…if we could get a freer flow of trade…” He paused, tightened his collar and continued. “Freer in the sense of fewer discriminations and obstructions…so that one country would not be deadly jealous of another and the living standards of all countries might rise, thereby eliminating the economic dissatisfaction that breeds war. Only if we make this step, then we might have a reasonable chance of lasting peace, and I think that it must be done in conjunction with banks, regardless of whether everyone wants it or not.” Mr. White sat back down, sipped from his water, and the silence of the room made the click of my pen the most audible in the room. What he said sounded accurate, but the vagueness of the remark contributed to the silence as much as the power of his words.
I cleared my throat, and racked my brain for a response. “Thank you Mister White for your comments, very insightful indeed. I would like to remind everyone that we must continue with our mandate: what other means of financial cooperation can we look towards?”
The silence was deafening. It appeared that not one of the delegates had any alternative solutions to the issue at hand. The Australian delegate was scratching his ear, the Indian delegate was whipping his glasses, the Chinese man was writing some notes, and the English delegate had his hand raised. Sir Herman Dunstable stood up.
“I feel that if we are to use the global framework like a bank, we must be wary of how much influence we give the economic powers. I believe there should be a system in place whereby a nation can only engage in the export/import market when the deal is mutually beneficial. All economic activity would have to flow through this global mechanism. Any proposed trade that is too lopsided (either for the importer or the exporter) would be modified or prevented on these grounds.”
This seemed like a legitimate middle ground position.
“So what would we call such an international body?” I asked.
“I propose the name to be the International Clearing Union, or the ICU”, responded Mr. Dunstable. “It is a theoretical economic governing body that I and John Maynard Keynes have created. Ideally, it would act as a cooperative fund to help governments get through crisis.”
Murmurs of approval create the buzz of a beehive in late August when the pollen is most sweet. The Indian delegate was raising his two hands to the heavens in approval.
“Pardon me Mr. Suarez”, the voice of Mr. Hull interjected, “if I could respond to this proposition…”
I nodded in apprehensive approval.
“Well, let me state that any form of mediating body in trade is not the role of government. Our system of trade should be free market, and the market should determine the commodity prices based on amount consumed, produced, and desired. What Mr. Dunstable has suggested reeks of socialist policy, and, dare I say it, the red mark of communism.”
The den of beehives transformed into a rolling tidal wave encroaching on a rock-face. Our basement meeting room felt like Azteca Stadium after Necaxa had defeated Americas.
White raised his hand up to quell the noise. “I have discussed this proposition with my American colleagues and the representatives of most Latin American nations. We have been perfectly adamant on that point. We have taken the position of absolutely no.”
The tidal wave had spurted against the jutting rock, shot white spray high into the air, and crashed back down into the ocean with a bang. The serene conglomeration of businessmen had turned into a room of excited fifth graders on the last day of school before summer.
“Silence, silence!” I shout, but to no avail.
White continued: “I propose an alternative: The International Monetary Fund. The IMF would function exactly like our national banks function today. There would be a fund into which member nations could contribute money, and this money could then be loaned out to help countries pay off debts. It would be a promoter of economic growth through international trade and stability. Also, the commodity price on each item would reflect its worth in the global market. What this sort of system promotes is the extension of the core-periphery model discussed recently in economic theory. It is the understood role of larger economies to nurture the smaller countries and help them achieve economic. Contrary to Mr. Dunstable and Mr. Keyne’s theory of a monitory structure that only creates mediocrity, I know that my model will push for global progress in a humane, efficient manner”.
Shock receded into intrigue, followed by a general consensus that such a plan made most sense. The tsunami of antagonisms had transcended into camaraderie. The Liberian delegate was shaking hands with Ibrahim Kamal, the Iraqi Senator and delegate; the Italians were chatting with the Columbians.
I spotted John Maynard Keynes Keynes depart the room, and I followed them out. I caught him in the stairwell to the basement, and asked him where he was going. He turned, stammering and livid with rage with arms flailing: “I cannot bear to watch these sitting ducks follow along and get tricked by these American buffoons! To be perfectly honest, what we have just witnessed is the end of democracy on the global level.” He descended farther down into the darkness of the stairwell, and I dared not follow him.
IV
I had been aware of White’s theory for a while. If my memory serves correct, it was a week before the Bretton Woods conference that I read over his proposal. Sitting in my study, with the portrait of Robert Owen peering over me, I read a treatise for an economic system that would gradually bring all other national economies under the influence of American government and business elite. I recall that a torrential thundershower had submerged the city, and the rain clanged like gargantuan stones on my rooftop in the early morning.
The President and i had met next morning at 9 o’clock. I told him we needed to fight against any sort of Conservative hegemonic international banking system, and that the document I read last night spelt out these exact terms. The President heard my diatribe without even as much as a smile. When I finished, he grabbed my hand, looked my in the eye, and said: “Compromise. We as a derivative economy must compromise. Up against the American’s there is little hope unless we do as we are told. Look at Russia: do we really desire a Communist state? No. We must compromise. I demand that you compromise at these meetings. It is for the best interest of all Mexicans.” Mr. President stood up, tightened his tie, turned, and left the room.
V
The next day at lunch the French delegate was ecstatic. “Ce absolutement magnifique! Now we can move forward and begin improvements to our country.” The captivating and bombastic Mr. White had stolen the spotlight. Grand nations like France were content with short-term gain in exchange for long-term economic subjugation.
I peered through the windowpane, and spied a flock of ravens descend on the rotting carcass of a bunny. They ripped mercilessly at the fur and flesh, heartlessly stuffing their beaks until the very last morsel was consumed.
