Even before it came to exist, the Bretton-Woods system and the Dollar-centered financial system that it produced were not embraced universally. The main architects of the Bretton-Woods system, Keynes for the United Kingdom and White for the United States, had to strike a number of bargains between their competing interests. Financial historians recognize three main compromises.

The Split Personality of Bretton Woods

The first compromise was on the tradeoff between monetary stability, which the United States sought to avoid the financial booms and crashes of the 1920s and 1930s, and flexibility of monetary policy, which the United Kingdom desired to avoid prolonged recessions. The Dollar was pegged at $35 per ounce, but convertibility of Dollars for gold was available only to central banks, not to private investors.

This quasi–gold standard restricted U.S. monetary policy and helped to establish the Dollar as a reliable currency for international trade. In order to reinvigorate international trade after the protectionist trade wars of the 1930s, the Bretton-Woods system stipulated that all other currencies were pegged to the Dollar. This frightened many Britons, who considered this system to be de facto return to “the tyranny of gold.” For that reason, a second compromise was embodied in the Bretton-Woods accord, whereby exchange rates relative to the Dollar could ostensibly be adjusted if necessary, under intentionally vague conditions.

The final compromise was reached to accommodate the United States' desire to have currency convertibility in order to promote international trade, and the United Kingdom's desire to maintain controls in order to avoid speculative attacks on currencies.