Yet American officials were determined to open up their access to the British Empire. The combined value of British and American trade accounted for well over half of all world merchandise trade. In order for the United States to open world markets, it first had to divide the British (commercial) Empire. While Britain had dominated the nineteenth century economically, American officials intended that the second half of the twentieth century would be under American hegemony.   The relative decline in American power and the discontent of Europe and Japan with the system were accentuated by the continued decline of the dollar, the basis that underpinned the world trading system after 1945. The Vietnam War and the refusal of the government of US President Lyndon B. Johnson, and his Great Society programs, led to an increase in the outflow of dollars to pay for military spending and widespread inflation, which led to a deterioration in the U.S. trade position. In the late 1960s, the dollar was overvalued by its current trading position, while the German mark and yen were undervalued; And of course, the Germans and Japanese did not want to upgrade their exports and make them more expensive, while the United States tried to preserve their international credibility by avoiding a devaluation.  Meanwhile, the pressure on public reserves was accentuated by the new international money markets, whose huge reserves of speculative capital were in search of rapid profits.  A devastated Britain had little choice. Two world wars had destroyed the country`s main industries, which paid to import half of the country`s food and almost all its raw materials except coal.
The British had no choice but to ask for help. It was not until the United States signed an agreement on December 6, 1945, to provide $4.4 billion in aid to Britain that the British Parliament ratified the Bretton Woods Agreements (which was done later in December 1945).  Harold James` elegant essay is the most thoughtful of the book. The Bretton Woods agreement, he writes, was possible because it isolated monetary unification from endless trade disputes that stopped trade wars for 70 years. Knowing how and why international exchange rates are set today, as well as the reasons for interest rates and securities prices can help finance professionals become more rounded and valuable to their business. . . .