STRENGTHENING THE FOUNDATIONS
Paraguay
An additional way in which US officials supported international development goals during the Bretton Woods negotiations—one that has been quite overlooked in histories of Bretton Woods—was the 1943–44 financial advisory mission of Robert Triffin of the Federal Reserve Board, to Paraguay whose advice echoed that of the White mission to Cuba in 1941–42. This time, however, the US advice was implemented immediately, and the Paraguayan reforms quickly came to be seen as a model to be followed by Southern policymakers with development aspirations elsewhere. United States officials saw the Triffin mission as helping to prepare the country for membership in the new IMF, and the Fund’s provisions for adjustable exchange rates and capital controls were written into Paraguay’s new monetary legislation. As in Cuba, US officials also recommended domestic reforms to strengthen the government’s capacity to further development, including the creation of a new central bank, a national currency, and mechanisms for providing domestic development finance.
While the Bretton Woods negotiations created a multilateral framework that favored Southern governments’ development priorities, the Triffin mission strengthened the domestic institutional arrangements that allowed those priorities to be met. As we shall see in later chapters, Triffin and other US advisers then dispensed similar advice across Latin America and elsewhere to countries that had signed up to the Bretton Woods agreements. Triffin’s Paraguayan mission also deserves attention because it teaches us more about political sources of the US backing for international development in this period. While US economic interests were negligible in Paraguay, strategic concerns were significant in driving US policy toward the country, as they were elsewhere. The Paraguayan mission was also influenced by New Deal values, particularly the willingness of US officials to learn from, and partner with, Latin American policymakers who were pioneering new development-oriented financial polices at this time. As we shall see, the most significant of these policymakers was Raúl Prebisch, with whom Triffin worked closely in Paraguay.
The Emergence of the Mission
The Federal Reserve Board’s participation in the Cuban mission represented its first extensive involvement in Latin American financial advisory work. It became much more involved after the arrival of the thirty-year-old Triffin in mid-August 1942 to organize and lead the Board’s Latin American section of its research division. Triffin was a Belgian-born economist whose political sympathies there had been with center-left reformers.
1
He came to the United States in 1935 to study at Harvard, receiving his Ph.D. in 1938 working with Schumpeter, Leontief, and Chamberlin (and he spent a summer at the University of Chicago were he was turned off by the free-market Chicago School).
2
After returning briefly to Belgium, he took a three-year teaching appointment at Harvard between 1939 and 1942. In some ways, Triffin was an unlikely hire for the Federal Reserve role. His Ph.D. thesis (which, like White’s, had won the prestigious Wells Prize for best thesis) was very theoretical, examining monopolistic competition and general equilibrium theory.
3
At the time, he had also never traveled to Latin America. But economists were in short supply during the war and Triffin’s academic credentials were impressive, as were his Spanish language skills.
The Fed’s Walter Gardner played the major role in training Triffin.
4
As we have seen, Gardner had been deeply involved with the IAB initiative and the Cuban mission, and he was a member of White’s technical committee developing the Bretton Woods plans. He had also urged the Federal Reserve Board to assume a lead role in US financial missions to Latin America as far back as May 1939. Gardner found a very sympathetic colleague in Triffin. In a memo written just one month after his hiring, Triffin made clear that he supported the Good Neighbor financial initiatives that Gardner and others had pioneered. The memo advocated a program of large foreign lending to assist Latin American industrial development and economic diversification not just in the short term but also in the postwar period. Triffin argued that this program would reduce Latin American countries’ dependence on commodity exports and also provide new markets for US exporters of capital equipment after the war.
5
Because the Federal Reserve Board did not have access to good information on Latin American financial and monetary issues, Triffin immediately set to work on developing a major set of research studies that would compile statistics on money and banking issues for each Latin American country as well as analyses of their central bank operations and monetary and banking legislation. The goal was to have a set of country studies that, after receiving comments from each Latin American central bank, could be published in a single volume titled “Central Banking and Money Markets in Latin America.” Gardner noted that the information would be particularly useful if the IAB was created. Even if wasn’t, however, the work “will fill a long-felt want and will give the Board intimate contacts in Latin America and an influence on central banking philosophy in that area which could not otherwise possibly be achieved.”
6
Just as Triffin completed a draft of a first study of Colombia in mid-1943, he had his first opportunity to travel to the region as a member of a Treasury-led mission to Honduras that had been arranged by White. In addition to being struck by the poverty of the country, Triffin reported back to his superiors that he was impressed by the “enthusiastic response to our good neighbor policy” and by the fact that the policy “is certainly bringing fruit here and appears indispensable for any successful attack on the problem of Honduran progress and economic development.”
7
The Honduran government had asked White for help in establishing a central bank. Like Cuba, the country had no central bank at the time and US currency was often used there, particularly on the north coast where two US fruit companies (Standard Fruit and United Fruit) grew bananas that made up a large portion of the country’s exports.
8
The mission recommended the creation of a new public central bank that would have a monopoly of note issue backed with 30 percent reserves and that would be empowered to impose reserve requirements on banks as well as exchange controls. Within the central bank, the mission also recommended the creation of a credit department to help address the shortage of agricultural credit that placed farmers, in Triffin’s words, “at the mercy of the local merchants who seem to exploit the situation to the full.”
9
The recommendations of the Honduran mission met the same fate as those of White’s Cuban mission. It was not until 1950 that they were finally implemented. Years later, Triffin suggested that the powerful United Fruit Company had been one force working against them.
10
But as we will see below, he also felt that the mission’s lack of success reflected the way that White had approached the Honduran government. By this time, Triffin had already found an opportunity to do things differently in another country: Paraguay.
Cultivating the Paraguayan Request
As far back as 1938, officials in Paraguay had sought US credit and technical expertise to help achieve their goal of stabilizing the Paraguayan currency.
11
The State Department had strongly supported the idea because of the country’s strategic location in the region and out of fear that the Nazis were cultivating support among the large German population in the country. The first Nazi group overseas had been established in Paraguay in 1929 and the US ambassador estimated in 1941 that there were just twenty US citizens compared to twenty-six thousand Germans living in the country.
12
American fears about Axis influence only intensified when reports surfaced in 1939 that the Paraguayan government was negotiating a major economic deal with Germany and Bolivia, involving the building of an oil refinery in Paraguay to transport Bolivian oil to Buenos Aires for shipment to Europe.
13
Quickly thereafter, the United States approved an Export-Import Bank loan to the country for public works and to help stabilize the peso.
14
At the insistence of the Export-Import Bank, Paraguay’s state bank—the Banco de la República del Paraguay—hired Eric Lamb, who had been a statistician at the FRBNY and had Latin American experience, to serve as financial adviser during the period of the loan.
15
During Lamb’s time, Paraguayan politics underwent a major transformation. The Liberal Party, which had dominated the country since the late nineteenth century, faced growing challenges to its rule in the late 1930s from groups who favored greater state intervention in the economy to bolster the nation’s power and independence from foreign domination.
16
After several changes of government and growing political instability, General Higinio Morínigo became president in September 1940 committed to these more nationalist goals. Dominating Paraguayan politics until 1948, he pushed for “a program of authoritarian modernization and reform” involving the creation of new public works programs, public monopolies, social security programs, and state assistance for industrialization and agriculture. In a speech in December 1940, he laid out his goals: “we believe that the true and direct object of the State is the development of all the faculties of the nation and the perfecting of its life. Hence we reject Liberalism, the product of the 19th century, which does not admit the intervention of the State positively in satisfying human needs and considerably reduces its mission.”
17
Many in Morínigo’s government and the armed forces were sympathetic to the Axis cause. As part of broader efforts to improve relations with Paraguay, the US government replaced the existing ambassador, who had been hostile to the new regime, with Wesley Frost who was more supportive of its reforms and industrialization goals.
18
By mid-1941, Morínigo had decided to accept US military aid and his government subsequently, at the important inter-American conference in Rio in January 1942, agreed to break diplomatic ties with the Axis powers.
19
After this, a key goal of US policy was to reduce the country’s economic dependence on Argentina, an objective that dovetailed with the preferences of Morínigo and other Paraguayan nationalists who were very wary of the influence of their powerful southern neighbor, especially since Argentina had instigated revolutions in Paraguay in the past.
20
Just before he left the country in mid-1941, Lamb outlined a plan to improve the Banco’s internal organization since its operations were growing dramatically. The bank was now involved not just in new financing of crop purchases but also in administering exchange controls that the government had put in place in February 1941. Lamb’s plan was well received by the bank, but Lamb noted that the staff lacked confidence in their ability to carry it out. To address this situation, he suggested that the US government provide help to some members of the Banco to visit the United States on a training mission. The proposal was approved by the Banco and funded by the Office of the Coordinator of Inter-American Affairs.
21
The Paraguayan Bankers Mission arrived in Washington in July 1942 with three officials, including the Banco’s manager Harmodio Gonzales, just as Triffin was about to join the Federal Reserve Board. Although Treasury officials initially developed a plan for the Paraguayans to study the Federal Reserve and US monetary system, they did not show much interest in the Paraguayans’ training.
22
Indeed, despite his usual enthusiasm for Latin American loans, White had been very skeptical of the Export-Import Bank loan to Paraguay in mid-1939, arguing that it would not yield “political benefits” because the country was firmly “in the economic orbit of Argentina.”
23
Filling the vacuum, Triffin quickly assumed the major role in supervising Gonzales. When Gonzales indicated that he favored monetary, banking, and central bank reform in his country, Triffin steered the training toward the study of concrete monetary and banking experiences of Latin American countries as well as those of the agricultural exporting countries of the British dominions. Between October and December, Triffin in fact devoted most of his time to studying the Paraguayan situation and helping Gonzales. Gardner pointed out that “the association of the two men has proved to be particularly happy.”
24
Triffin’s willingness to devote enormous time to the task of working with Gonzales stemmed from his view that Lamb’s failure to convince the Banco to adopt his reform ideas was “due in part to the attempt to present Paraguay with a kind of ‘fait accompli’ in the form of projects drawn without their cooperation and which remained completely foreign to them.”
25
He drew a similar lesson from the experience of the Treasury-led Cuban and Honduran missions. Although those missions had consulted with the local governments and various local interests, they had developed their proposals unilaterally and then presented them publicly to the local governments. Triffin felt that this had also been the approach of Kemmerer in the 1920s and that it should be rejected in favor of a more “flexible procedure designed to ensure full participation and responsibility of the Latin American countries themselves in the plans ultimately worked out.”
26
Triffin’s work with Gonzales paid off. By December, Gonzales asked Gardner if he would to come to Paraguay to help oversee a major reform of the country’s monetary and banking system.
27
Gardner was too busy and Triffin was chosen to head the mission which was formally approved in May 1943 by the Federal Reserve Board. It was to be the first foreign financial advisory mission led by the board and Gardner highlighted (as he had at earlier moments) how missions of this kind would help boost the Fed’s influence in the region as well as at home.
28
Treasury officials noted how the mission had arisen because the Fed had “cultivated assiduously” the contact with Gonzales, but they seemed content simply to be involved in discussions about potential reforms.
29
Indeed, some Treasury officials thought the mission was “a mistake” because “the political situation in Paraguay is very bad…and will probably block adaptation of any recommendations.”
30
The Treasury’s position was not helped by the fact that Paraguay’s minister of finance, Rogelio Espinoza, apparently hated Morgenthau because of a perceived snub during a previous Washington visit.
31
Triffin’s Two Visits: Monetary and Central Bank Reforms
Triffin first visited Paraguay between August and October of 1943, accompanied by Bray Hammond of the Federal Reserve Board. On the trip to Asunción, they stopped in Bolivia, Colombia, Ecuador, and Peru, making contacts with local central bankers, other officials, and businessmen in order to assist Triffin’s broader Latin American research project. Triffin and Hammond were particularly impressed by their Colombian visit where they received helpful comments on Triffin’s draft study of the country and were hosted by Enrique Dávila, assistant secretary to the Bank of Colombia.
32
Indeed, they were so impressed with Dávila that they negotiated with the Colombian authorities for him to join them in Paraguay for five or six weeks to help with the mission.
33
In the discussions with officials in various countries, Hammond reported to Fed Governor Mat Szymczak that Triffin’s background proved particularly useful:
I have observed that he is singularly well suited for the work, apart from the fluency with which he can talk with these people in their own language. You will remember that many or rather
most
of these bankers, officials, and business men we meet have been educated in Europe. To find an American representative with the background of European culture which they know and value surprises and delights them. I have noticed time after time how an official’s face softens and lights up when he finds himself addressed easily in Spanish and when finds further he can switch to French.
34
After arriving in Asunción as “physical wrecks” after ten days of travel, Triffin and Hammond set to work at the Banco in a shared office which Hammond contrasted sharply with the opulent central banks they had visited in Colombia and Peru: “There is no collection of gold treasure here, nor paintings, nor ceramics. It is the rattiest, dirtiest, messiest business office I have ever had anything to do with.”
35
Triffin met for long hours with local officials to develop a new monetary law that was designed to consolidate a new currency. Because the Paraguayan currency had been so unstable for many years, Argentine currency acted as the dominant medium of exchange and many large-scale transactions were even denominated in an abstract “gold peso” based on an obsolete Argentine monetary unit. The new proposed law would consolidate the note issue with the Banco and replace with gold peso with a new currency, the guaraní. As a temporary measure until international monetary stability was restored, the value of the unit would be tied to a basket of currencies made up of the Argentine, Brazilian, British, and the US currencies.
The monetary reform was adopted very quickly in early October 1943. At the time, the Banco’s president, Carlos Pedretti, stressed that the reform would contribute to economic development by providing greater stability and convenience, and would allow for “the recuperation of our monetary independence and sovereignty.” He also pointed out that the new currency’s name gave “homage to the indomitable race which impressed its characteristic stamp upon our nation.”
36
Triffin was impressed with both Pedretti and Espinoza, and he noted that Pedretti “especially is now a very good friend,” a friendship to which he later attributed the success of his mission.
37
Of the government more generally, he was critical of its constraints on the press, but he added that “it is generally conceded, however, even by the liberals, that Morínigo has done much more for the country in two years than the liberal governments have done in the course of their thirty years in power.”
38
On their way back from Paraguay, Triffin and Hammond made stops in Uruguay, Argentina, Chile, Peru, and Panama to support the broader Latin American research project. Soon after their return, the Paraguayan government asked if Triffin could come again to Paraguay. He went back for a second visit between April and December 1944, accompanied initially by an official from the Federal Bank of Cleveland and then by David Grove from the Federal Reserve Board (and another Harvard graduate). On this second trip, Triffin helped draft new central bank legislation working closely with Espinoza.
39
The legislation was approved unanimously by the Paraguayan legislature in September 1944, along with new banking and exchange control laws.
40
The overall goals of these legislative measures were similar to those put forward by White’s earlier Cuban mission. But Triffin’s recommendations went further in some areas and he justified the overall approach in much more detail than the White mission had. In his 170-page report on the Paraguayan mission and in other publications at this time, Triffin argued forcefully that the interwar experience had demonstrated that Latin American monetary management should no longer be guided by the automatic adjustment mechanism of the gold standard. In his words, “the domestic disruptions implicit in this mechanism…were especially drastic in undeveloped economies, dependent to an extreme degree on international trade and capital movements.”
41
For example, in the late 1920s, enormous capital inflows into Latin America generated “a perfectly orthodox inflation, based on the piling up of gold and dollar assets in the central bank.” Then, between 1929 and 1931, orthodox policy had reinforced the contractionary effect of the collapse of international lending, commodity prices, and external markets, resulting in “the near collapse of the economic and social structure of these countries.”
42
Even if these domestic disruptions were economically and socially tolerable, Triffin questioned whether they were as self-equilibrating as the gold standard theory assumed. He noted that balance of payments movements “were often due to erratic fluctuations in crop yields or to cyclical movements in the buying countries, rather than to basic disparities in the international price and cost structure.” In cases such as these, “the internal adaptions forced upon the country by adherence to the gold standard were fundamentally disruptive rather than re-equilibrating.” He concluded: “in monoculture countries characterized by an extreme dependence vis-à-vis the fluctuations of international trade and of capital movements, it [the gold standard] subjects the economy to unbearable and often unnecessary disruptions.”
43
Policy Autonomy and Bretton Woods
What was needed, Triffin argued, was a new form of monetary management that was focused on “the internal needs of the economy.”
44
In describing his proposals to the Federal Reserve Board, he pointed out that “the rigid monetary automatism of the gold standard has been avoided in favor of a bold attempt at autonomous monetary management. The new approach follows the very general trend in monetary and banking organization and its necessity is ten times greater in the case of Latin American countries.” He continued: “The most novel aspect of the Paraguay legislation resides in the thoroughness with which these new trends have been integrated into a unified and logically systemized structure.”
45
This “ structure” included equipping the central bank with strong domestic powers to conduct activist monetary management. Triffin observed that open-market operations and discount rate changes were often ineffective in Latin America because domestic financial markets were underdeveloped and the banking system was dominated by foreign banks responding primarily to monetary developments in their home countries. For this reason, the central bank’s monetary department was authorized to impose flexible reserve requirements on private banks and to issue and retire its own bonds “to take the place of open market operations.”
46
But Triffin went further to argue that the central bank had to become an active banker to the public. He had much more in mind than the limited emergency lending that had provoked so much controversy in the Cuban debate. Triffin proposed that the central bank include two departments that would engage in regular banking activities: a banking department and a savings and mortgage department. As in the Honduran case, these banking activities would be useful partly in addressing “the inadequacy of credit facilities for production and developmental loans” caused by the fact that the foreign banks dominating the banking system were focused mainly on the foreign trade sector.
47
But Triffin also noted that the activities of the two central bank departments would provide a direct mechanism for it to influence monetary conditions. He argued that this kind of direct intervention in the market had “been found indispensable for monetary management in new countries, characterized by monoculture, a high degree of dependence on foreign trade, and the absence of a developed financial market.”
48
The two departments would be supervised by the monetary department in order to ensure that their lending activities served the goals of monetary policy. Grove, for his part, also sought to strengthen the research and statistical capacity of the central bank and link this to its policy work.
49
Alongside these measures to strengthen the central bank’s domestic powers, new provisions were developed to protect national monetary policy from external influences. To begin with, the strict link between reserve levels and domestic monetary conditions was loosened by allowing the monetary issue to be guided by two “warning signals”: the rate of expansion of the medium of circulation and the ratio of net international reserves to normal exchange requirements. Triffin also went out of his way to state that monetary reserves should be used “to moderate the harmful effects of fluctuations in the balance of payments on the money supply, on credit, and on economic activities in general.”
50
The domestic economy could also be buffered from external forces by exchange rate adjustments and capital controls. The former required legislative approval, while the central bank was empowered to control cross-border capital flows at its discretion. In his defense of capital controls, Triffin also endorsed the country’s exchange controls, while drafting legislation that modified them “in a liberal direction” by allocating foreign exchange for nonessential transactions via an auction.
51
The new exchange control legislation also ensured that these restrictions would serve monetary policy more directly by placing responsibility for their management with the monetary department of the central bank. Triffin made sure to run his draft proposals for exchange controls by an interdepartment group that met at the State Department and the proposals met no objections.
52
In a later draft memo, Triffin developed arguments for US acceptance of exchange controls abroad that made explicit reference to US policymakers’ need to recognize the distinctiveness of the Latin American economic context:
We often lose sight of the fact that the general attitude taken in this country with respect to exchange control may be related to the peculiar circumstances of our own economy and does not take into consideration the fundamentally different characteristics of other economies, more dependent on international transactions and subject to violent disruptions associated with quasi monoculture. In other words, we tend to generalize and give universal validity to rigid principles derived from familiarity with conditions specific to the United States or at least to highly developed and well balanced economies.
53
In developing Paraguay’s legislation relating to external controls and exchange rates, Triffin was careful to ensure that they conformed with the Bretton Woods plans.
54
The Paraguayan government was one of the first to respond to a US invitation in early 1943 extended to thirty-seven countries to send technical experts to Washington to consult on the White plan.
55
Since Gonzales was already in Washington, he assumed the role of conferring bilaterally with White, and he also attended a mid-June multilateral consultation session that White hosted with eighteen countries.
56
At the time that the Paraguayan monetary law of October 1943 was approved, Pedretti also expressed interest in pegging the new Paraguayan currency to the international standard of “bancor” or “unitas” that the Keynes and White plans proposed.
57
United States officials had also seen their Paraguayan work as linked to the Bretton Woods plans from very early on. On the first trip to Paraguay, Hammond remarked in an October 1943 letter to the Fed Board that he and Triffin saw their mission as complementary to the drafting of the White’s proposed Fund. As he put it, “the extent that you do establish and maintain monetary stability within any country, you ease the difficulty of stabilization through the Fund. In Paraguay, if we succeed in our banking program, we shall have checked instability at one of its sources at least and shall have made the task of international stability to some degree less difficult.”
58
Two months later, Gardner also highlighted how the work of the Board’s Latin American group would be of great value “to the international financial agencies now being discussed in Washington”
59
During his second trip, Triffin wrote to Hammond (just as the Bretton Woods conference was ending) that he hoped his Latin American work would “contribute significantly to the stabilization mission of the monetary fund, as far as Latin America is concerned.”
60
After his return from Paraguay, he explained the link in more detail to the Fed Board:
I view our present work in Latin America as part of a general program of monetary stabilization in that area. It need not be emphasized that the progress of the International Monetary Fund will depend very largely on the development of better monetary and central banking management in each individual country. Failing that, it is to be feared that the resources of the International Fund will be uselessly sacrificed in a never-ending process. There is, however, at present a very deep and widespread interest throughout Latin America in improvements in monetary and banking institutions. The Fund constitutes no direct help in this respect, since its operations affect only the level of international reserves of each country. In order to stabilize the internal monetary situation, action on the national scale is required…. Finally, it is painfully obvious that the Fund will be unable to intelligently examine the monetary situation of the Latin American countries and to give them the advice which it will be called upon to offer under various circumstances, if only the information and data presently available in Washington is at their disposal. Our missions to Latin America are progressively developing excellent personal contacts and a broad basis for statistical and economic studies of Latin America.
61
Just after the Bretton Woods conference ended, Gardner stressed this last point to the Fed Board in discussing Triffin’s activities in Paraguay.
62
In an earlier June 1944 letter to Gardner from Paraguay, Triffin had also noted that he anticipated that some staff involved in the Fed missions to Latin America would soon move on to the Fund and Bank.
63
Triffin himself moved to the Fund in 1946, taking charge of the Fund’s exchange control division. On the Paraguayan mission, Triffin had taken a particular interest in harmonizing Paraguay’s exchange control legislation with the new Fund’s rules, allowing permanent controls only for the purpose of controlling capital movements.
64
In correspondence in March 1945, he expressed a hope that the type of exchange controls introduced in Paraguay “may be of interest to the IMF and provide some sort of pattern for the future policy of the Fund.”
65
When his draft proposals had been discussed by the interdepartmental group at the State Department, the suggestion had also been made that a general international convention on exchange controls might be developed along the lines of the Paraguayan example—a suggestion that Triffin had greatly appreciated.
66
United States Politics and the Paraguayan Mission
The Paraguayan reforms were much less controversial within the United States than the Cuban ones. Few American private businesses had any direct stake in the results since US economic ties to the country were minimal and no US banks operated in the country. Opposition may also have been lessened because prominent members of the New York financial community had been impressed with the quality and usefulness of Triffin’s Colombia study which was published in mid-1944 (with five hundred copies sent across Latin America). Even Burgess had made a point of writing to Hammond in August 1944 to say that people in his bank thought the study was excellent.
67
The praise was impressive since the report had been implicitly critical of Kemmerer’s work in establishing the country’s central bank in 1923, a criticism that Fed officials had deliberately toned down in order to avoid giving offense.
68
Still, there were a few grumblings about the Paraguay reforms in the banking community. Triffin reported in mid-1945 that “one of the most intelligent, practical bankers in the United States recently commented to me that while the Kemmerer legislation was admittedly completely inadequate and did not pay any attention to the peculiar needs and circumstances of Latin American countries, the Paraguayan legislation ran the risk of being also unrealistic in that it did not take sufficiently into account the administrative backwardness of the country.” Triffin dismissed the criticism, arguing that the “comment is probably very much exaggerated and that you can find more honesty and competence in Paraguay than he would have thought from New York.” He also argued that the only alternative to his “some flexible system” was the more rigid Kemmerer approach that he thought unrealistic: “Flexibility may be abused but rigidity will be swept away in practice.”
69
Triffin later recalled that some of his work in Paraguay had attracted very strong criticism from the Treasury, against which Eccles had defended him.
70
He did not explain the nature of the criticism and I have found no archival documents to fill in the story. It seems very unlikely that the Treasury objected to the content of Triffin’s advice since it was similar to that of the earlier Treasury-led Cuban and Honduran missions. Instead, jurisdictional jealousies were the likely cause, particularly given the success of Triffin’s work. Indeed, Triffin reports that White even tried to recruit him to the Treasury at one point, an offer Triffin had refused because of his “concern for independence” which he thought would have been compromised in White’s “regimented staff.” White did not take the rejection well; Triffin reports that White had been “scornful of my stupidity” given that the Treasury’s held greater power than the Fed within the government.
71
In advance of his second trip to Paraguay, Triffin made a point of involving the Treasury’s Latin American point person, Norman Ness, in the Fed’s discussions about the content of his recommendations and Ness approved all the legislative drafts that Triffin took to the country.
72
The success of Triffin’s first visit also appeared to annoy some FRBNY officials who asked to be notified in advance of future board missions and to participate in them. Gardner reminded Eccles that the board had in fact asked the FRBNY whether any of their people were available for the Paraguayan mission but had been told no one was available for such an unimportant country. As Gardner put it, “they failed at that time to appreciate the fact that the Paraguayan job would have a significance far beyond Paraguay itself.”
73
Gardner also told Eccles that he and Triffin would be happy to involve the FRBNY in future advisory work, but only “so long as it is clear that the Board is taking the lead and it is also understood that the method we have developed for working with the Latin Americans is not going to be blocked.”
74
In advance of his second trip, Triffin sent all the material relating to the mission to Henry Wallich in the FRBNY and invited his comments (which were largely approving).
75
Wallich was not, however, included in the formal “technical commission” that commented on the Paraguayan recommendations in Washington during January and February of 1944; that body included Ness and five Federal Reserve Board officials (Triffin, Gardner, Hammond, George Bach, Julia Wooster).
76
While Triffin’s work generated some annoyance in the Treasury and FRBNY, the Federal Reserve Board was particularly happy with his accomplishments. After his second trip, one Fed official declared that the new central bank law was “one of the most advanced and far-reaching legislations, both from the theoretical and practical point of view, ever adopted in a Latin American country.”
77
The Fed even approved a large print run of one thousand copies of the formal report on the Paraguayan reforms, an expense that one Fed official justified by pointing out that the reforms had “attracted considerable attention throughout Latin America” and “should be considered as a pathbreaking innovation in this field.” The official also mentioned that “the Board itself showed a great interest in this matter and at the time expressed the hope that this new adventure might influence thinking in the field of central banking both at home and abroad.”
78
In a statement to the board in January 1945, Triffin also highlighted the particular benefits that accrued to the board itself from the Paraguayan mission: “the Board has acquired a great deal of goodwill and prestige throughout Latin America and it is emphasized everywhere that our work constitutes a most welcome evidence of our general good-neighbor policy.”
79
It is clear, then, that the Fed’s own bureaucratic interests vis-à-vis the Treasury and FRBNY played a role in encouraging the Paraguayan mission. But Fed officials themselves were also very aware that their work was tied to US foreign policy objectives. As Hammond observed in one letter from Paraguay in October 1943, “if we are doing a good job in Paraguay, it means that our country’s foreign policy is being strengthened.”
80
One British official in Asunción also told his superiors that Triffin’s explanations of his proposed reforms to Paraguayans often included “the playing up of Paraguayan nationalist sentiment directed to detaching them from the Argentine.”
81
The State Department also praised Triffin’s work as a “practical implementation of the Good Neighbor Policy.”
82
As the war wound down and fears of German power in the region diminished, this strategic motivation fell away and more general US national interests were emphasized. In a March 1945 document, the board explained how missions such as that in Paraguay “may reduce the disturbances to our domestic credit situation that originate in foreign economies” and “will also work to the enhancement of American prestige and the cultivation of friendly and mutually helpful international relations.”
83
In addition to bureaucratic and foreign policy goals, the Paraguayan mission was also informed by New Deal values. Near the end of his time in Paraguay, Hammond expressed the humanitarian case for why the United States should be helping the country: “They are not so well off as we, they are victims of a lot of hard luck, their situation is disadvantageous, and it won’t hurt us to give them some help.”
84
In true New Deal fashion, Triffin also appeared to enjoy challenging the old liberal orthodoxy in international monetary thought. He went out of his way to trumpet the unorthodox nature of Paraguay’s new monetary and central banking laws, describing them as “wholly unorthodox” and “revolutionary.”
85
In an address to the Pan American Society a few months after returning from Paraguay, Triffin also emphasized that “the success or failure of our efforts at international economic monetary stability will depend largely on our willingness to give up ready-made, dogmatic, formulas of supposedly universal applicability.”
86
This view was very different from that of Kemmerer and his colleagues who held the view that the financial advice they gave was a universal and scientific product.
87
While Kemmerer offered very similar recommendations to each country he advised, Triffin went out of his way to tailor his advice to the distinct circumstances of each country.
88
Learning from Latin America
This aspect of Triffin’s approach to financial advising stemmed from one further New Deal value: a willingness to learn from Latin American experience and ideas. Triffin was keen to differentiate his approach from that of Kemmerer in the 1920s when, as he put it, “orthodox, but thoroughly alien, central banking reform attempted to transplant bodily in La Paz or Quito the monetary and banking mechanisms of older financial centers”
89
By contrast, Triffin extensively studied, and drew inspiration from, the experience of Latin American central banks that had experimented with unorthodox policies during the 1930s such as exchange controls, activist monetary policies, and central bank financing of agricultural and industrial projects.
The Paraguayan recommendations also emerged from discussions with leading monetary thinkers across Latin America. Particularly important were Triffin’s consultations with Raúl Prebisch. At this time, Prebisch was one of the best known central bankers in Latin America. He had played a central role in the creation of Argentina’s central bank in 1935, a bank that had been assigned far-reaching powers to regulate banks, administer exchange controls, pursue activist monetary management through open-market operations, and adjust the country’s exchange rate. Prebisch became the bank’s first head and remained in that position until October 1943 when he was fired in the wake of a military coup in June. He then delivered a series of high-profile lectures at the Bank of Mexico between late January and the end of March 1944 that further bolstered his stature as one of the most foremost monetary thinkers in Latin America. The lectures had been given to a small group of the Bank of Mexico’s staff, including its head Villaseñor (who had promoted the IAB proposal), but portions of his text were also published in the daily press.
90
One of the officials involved, Victor Urquidi, later described the seminars as ”an outstanding occasion.”
91
At this time, Prebisch was consolidating some of the broader economic ideas for which he would soon become well-known beyond the region, notably his case for state-supported industrialization to help poorer countries escape from their vulnerability to external shocks and declining terms of trade associated with commodity exporting. At the core of Prebisch’s thought at this time was a commitment to greater national policy autonomy. This commitment echoed that of Keynes except that Prebisch was critical of the fact that Keynes had ignored the distinct circumstances and difficulties facing poorer agricultural exporting countries. In Prebisch’s view, these countries needed to insulate themselves from powerful shocks emanating from the industrialized countries and to carve out policy space to promote state-supported industrialization and economic development.
92
Triffin first met Prebisch during the latter’s early 1944 Mexican visit. Even before they had met, Triffin had decided that the Argentine central bank legislation of 1935 was “the best starting point for the preparation of a Paraguayan banking law” because it was “concise and flexible” and embodied “most of the important features of other modern banking reforms” as well as because the two countries were very close “in economic and legal background.”
93
After their meeting in Mexico, Triffin and Prebisch quickly struck up a close personal friendship characterized by mutual intellectual respect.
94
Triffin frequently cited his debt to Prebisch’s “pioneering work” in his publications.
95
Triffin drew not just on Prebisch’s general monetary ideas but also on some specific policy innovations Prebisch had developed in Argentina. For example, Paraguay’s exchange controls drew directly on Argentina’s experience of allocating foreign exchange for nonessential transactions by an auction system.
After the Paraguayan reforms had been approved, Triffin arranged for Prebisch to spend three months in Paraguay, starting in early December 1944, to help implement them.
96
Triffin told the Fed’s Board that “we could have no better guarantee for the ultimate success of our mission” than to involve Prebisch since both of them were ”thoroughly in agreement upon the essential problems of monetary, banking, and exchange organization in Paraguay.”
97
Given the broader US suspicions of Argentina at the time, Prebisch’s role might have been expected to raise some questions. But he had been a high-profile advocate of closer Argentine links to the United States after the outbreak of World War II. Indeed, his strong US links were one of the reasons he had been fired from his central bank post.
98
Prebisch was also very well regarded within the Fed where Goldenweiser described him as “without any doubt, the most outstanding man in his field in Latin America and one of the outstanding ones in the world.”
99
He also had an excellent reputation with many New York bankers as well as with Berle who had described him as “brilliant” after they met during a trip Prebisch made to the United States in late 1940.
100
In light of later postwar US criticisms of Prebisch’s views, it is also worth noting that much of his thinking about development was similar not just to Triffin’s but also to that of other prominent US economists discussed in the previous chapter. For example, his arguments about the need for industrialization in the face of declining terms of trade echoed Kindleberger’s ideas (which Prebisch had read at the time).
101
Much of his thinking was also reminiscent of John Williams’s work, including Prebisch’s arguments about the destabilizing impact of the gold standard on the periphery, his advocacy of exchange controls, his criticism of classical trade theory, and his broader emphasis on the distinctive economic needs of poorer countries.
102
Again, Prebisch was very familiar with Williams’s work, having translated the latter’s 1920 book on Argentina’s prewar trade and having met with him in subsequent years.
103
Prebisch welcomed Triffin’s offer to help implement the Paraguayan reforms in late 1944 not just because of the difficult political situation in Argentina. Earlier in the year in Mexico, Prebisch had told his audience how encouraged he had been by White’s 1942 Cuban mission report which he felt had shown that the US government now recognized the usefulness of exchange controls for countries experiencing large balance of payments fluctuations.
104
At the time, he expressed his desire to discuss the issue more with US officials, an opportunity that arose right away when he met Triffin. His appreciation for Triffin’s ideas was clear. For example, he wrote to Triffin in June 1945 after reading the latter’s summary of the Paraguayan work:
You have developed monetary principles in your projects which are most suitable to countries like ours. I deliberately include Argentina: if I had to prepare a new project for my country I would adopt a great part of what you have proposed. Paraguay now has an efficient instrument for the stabilization of its economy. If managed with good judgment and prudence, the reform will be the beginning of a new monetary orthodoxy in our countries, under the auspices of the big shots of the Federal Reserve. We shall be freed, my dear friend, of the exorcisms by which foreign advisors would have wished to purify the exchange policy of these countries in not too remote periods.
105
Triffin replied, thanking Prebisch “for the nicest letter I have received in a very long time” and for his “extraordinary contribution to the success of those reforms in Paraguay.” He observed: “If the reform is successful I think the credit should always go to you. Yours was really the hard work while mine remained perforce confined to more or less academic theorizing.”
106
Prebisch was not the only Latin American thinker that Triffin drew upon. Triffin was also initially interested in the ideas of Herman Max, a Chilean professor at the University of Santiago and adviser to the Chilean central bank who had also served as adviser for monetary reforms in Costa Rica in 1936, Venezuela in 1939, and Nicaragua in the fall of 1940. Drawing on the experience of the depression, Max had become a strong critic of the gold standard, arguing that countries needed to be able to adjust exchange rates in response to external or internal developments in order to preserve domestic stability. He was also an advocate of activist monetary management and suggested that central banks should be able to lend directly to the public, in part because this might help make their interest rates effective vis-à-vis commercial banks.
107
During the Paraguayan Bankers Mission to the United States, Triffin had encouraged Gonzales to read the ideas of Max.
108
When returning from his first trip to Paraguay, Triffin also made a point of meeting with Max in Santiago. On his return trip in April 1944, he again stopped in Chile to discuss with Max the draft legislation he was going to propose to the Paraguayans.
109
Triffin thought the Max-led reforms were “better adapted to the basic economy and financial characteristics of the countries involved” than those of Kemmerer had been. He ultimately concluded, however, that the detailed nature of Max’s legislation was not appropriate for Paraguay “which up to now has not had even the most rudimentary of banking laws and in which the machinery of banking supervision can be built up only slowly and progressively.”
110
Triffin’s proposal that Paraguay’s central bank create monetary, banking, and savings and mortgage departments also drew directly on the experience of the Costa Rican central bank.
111
In mid-1943, Triffin had met several times in Washington with the general manager of that bank, Julio Peña, and then had asked in early 1944 for Peña’s comments on his draft recommendations for the Paraguayan central bank.
112
After Triffin stopped in Costa Rica on his way to Paraguay in May 1944, Hammond also suggested that Paraguayan officials be sent, at US expense, to Costa Rica to study the administration of that country’s central bank.
113
Indeed, both Triffin and Hammond were very keen more generally to encourage these kinds of intra–Latin American exchanges of financial expertise, building on the model they had used with Dávila and Prebisch in Paraguay. Their rationale was that Latin American officials could learn much more from each other than they could from US officials and practices.
114
As Triffin put it, “experience shows that a Paraguayan or any other banking employee of a small and primitive country is bewildered rather than effectively trained by a sojourn in the United States.”
115
Triffin’s mission to Paraguay was an important episode in the Good Neighbor financial partnership. It attracted much attention across Latin America for pioneering a new approach to financial advising that was supportive of development goals of governments in the region. Since White’s Cuban mission had been the actual pioneer, this reputation was not entirely deserved, but in contrast to the Cuban experience, the recommendations of the Paraguayan mission were immediately adopted. The Paraguayan mission’s higher political profile in the region also reflected the fact that Triffin devoted much more time and effort to publicly explaining and justifying the new approach. In addition, he went out of his way to consult with, and involve, leading Latin American authorities in the process of the developing the Paraguayan reforms.
Despite its importance, Triffin’s Paraguayan financial advisory mission has received very little attention from historians of US foreign economic policy.
116
This is striking given that the mission served as the model for subsequent Fed missions to Latin America that were one of the more prominent and popular aspects of the Good Neighbor policy in this period. After the entry of the United States into World War II in December 1941, Latin American officials had become frustrated by the fact that US financial assistance to the region increasingly focused on initiatives that served US defense needs directly rather than broader regional development goals.
117
In this context, the Paraguayan missions—and its development content—served as an important sign of the enduring US commitment to the Good Neighbor financial partnership that had begun in the late 1930s.
The neglect of the Paraguayan mission also by historians of Bretton Woods is unfortunate because the mission revealed a further dimension of the development content of the Bretton Woods goals. As we have seen, U.S. and Paraguayan officials explicitly drafted Paraguayan legislation to be consistent with the Fund’s endorsement of adjustable exchange rate pegs and capital controls. In keeping with embedded liberal ideology, these provisions were seen as crucial for protecting Paraguayan policy autonomy. Instead of supporting the welfare state and Keynesian full employment policies (as in Northern countries), adjustable exchange rate pegs and capital controls were designed to defend the Paraguayan government’s ability to pursue the kinds of state-led development objectives that had become popular across Latin America in the 1930s. To reinforce this point, US financial advisers went much further than the IMF could in supporting domestic institutional reforms that strengthened the capacity of the Paraguayan state to pursue these goals, including the creation of a national currency, central bank reforms, and new credit facilities to serve the local economy more effectively. In this way, the Paraguayan mission linked the new Bretton Woods framework very directly to Latin American development aspirations.
The initial Fed backing for the Paraguayan mission stemmed from both bureaucratic rivalries and the same strategic motivations of countering Axis influence as other aspects of the Good Neighbor financial partnership. In addition, the content of the US advice to Paraguay was influenced by New Deal values such as the desire to help the poor and challenge liberal economic orthodoxy as well as by a willingness to learn from Latin American experience and work with reformers in the region. The fact that these New Deal values were so prominent among US central bankers deserves underlining. At this time, central bankers were often portrayed as conservative thinkers attached to the liberal orthodoxy of the 1920s and skeptical of the new interventionist ideals embodied in the Bretton Woods framework. But as we have seen, the Federal Reserve Board was a rather distinct intellectual environment. In Latin America, too, central bankers such as Prebisch had taken a lead role—often through force of circumstances—in challenging orthodox policy and thought. This alliance of central bankers committed to development-oriented embedded liberal ideas would soon be strengthened further.
4.
Triffin to Gardner, August 28, 1945, p. 4, ISF, box 227.
5.
Triffin, “Notes on an Investment Program for Latin America” September 25, 1942, ISF, box 152.
6.
Gardner to Goldenweiser, July 24, 1943, p. 3, ISF, box 148. For the board’s lack of good information on Latin America, see “Latin American Field,” May 23, 1943, ISF, box 264.
7.
Triffin to Szymczak, June 16, 1943, p. 3, ISF, box 227.
8.
See, for example, Vinelli 1950.
9.
Triffin to Szymczak, June 16, 1943, p. 1. For the mission’s recommendations, see Julia Wooster to J. Burke Knapp, September 6, 1943, ISF, box 139.
12.
Friedman 2003, 21; Frost to Hull, April 7, 1944, WFP. More generally, see Grow 1981, Mora 1998.
13.
See for example O. E. Moore to Mr. Knoke, August 4, 1939, ISF, box 101.
14.
Grow 1981, 53; US State Department 1957, 759–61.
15.
Adams 1976, 216–17; US State Department 1957, 764.
17.
Quoted in Grow 1981, 62.
18.
Grow 1981, 67–68, 101, 135–36. For Frost’s support of industrialization goals, see for example Frost to Allan Dawson, January 3, 1944, WFP.
19.
Grow 1981, 66–76. Paraguay did not declare war on the Axis until February 1945.
20.
Frost to Hull, January 11, 1943, April 8, 1944, and Frost to Allan Dawson, February 1, 1944, all in WFP. See also “Summary Statement of United States Policy Toward Paraguay,” December 12, 1944, DSDF, 250/44/7/7, box 58.
21.
Eric Lamb, “Memorandum for Mr. Duggan,” September 9, 1941 and Duggan to Compton, September 12, 1941, DSDF, 834.516/104; Rockefeller to Lawrence Clayton, March 25, 1942, ISF, box 264.
22.
Triffin 1990, 26. For the study plan, see DeBeers to Glasser, August 11, 1942 and Debeers to White, August 14, 1942, TSF, Entry 66A0155, box 54.
23.
White to Morgenthau, “Paraguay,” May 4, 1939, p. 1, CFHDW, box 3, file 14.
24.
Gardner to Goldenweiser, December 19, 1942, p. 1, ISF, box 231. See also Triffin to Gardner, December 3, 1942 and Triffin “”Suggested Outline of Study for Dr. Gonzales,” December 12, 1942, ISF, box 259.
25.
Triffin, “Suggested Outline,” p. 2. See also Triffin to Gardner, December 3, 1942.
26.
Triffin, “The New York Federal Reserve Bank and the Latin America Work,” n.d. (but January 1944), p. 1, ISF, box 229. See also Triffin to Arthur Schlesinger, May 13, 1946, p. 6, ISF, box 156.
27.
Gardner to Goldenweiser, December 19, 1942, p. 1, ISF, box 231.
28.
Gardner, “Latin American Field,” May 25, 1943, and Gardner to Szymczak, November 11, 1943, ISF, box 231.
29.
Quote from deBeers to White, “United States Economic Advice to Latin America,” January 22, 1943, p. 1, TSF, 450/81/20/07, box 28. See also deBeers to White, December 2, 1942, TSF, Entry 66A0155, box 54.
30.
DeBeers to White, “United States Economic Advice to Latin America,” p. 1.
31.
Hammond to Governor, September 21, 1943, ISF, box 231. Espinoza had studied economics at the London School of Economics and was described in general by Frost as “a staunch friend of the United States”; Frost to Hull, March 9, 1942, DSDF, 834.516/107.
32.
Hammond to Szymczak, August 28, 1943, ISF, box 231; Hammond to Morrill, Goldenweiser, and Thurston, November 24, 1943, ISF, box 148.
33.
Edmund Montgomery to Hull, October 21, 1943, DSDF, 834.51A/118.
34.
Hammond to Szymczak, September 9, 1943, p. 7, ISF, box 231.
35.
Hammond to Szymczak, September 9, 1943, p. 7, and September 21, 1943, p. 3, ISF, box 231.
36.
Quotes from Pedretti, “The Monetary Reform” (address to the Asunción Chamber of Commerce on October 13, 1943), pp. 16, 5, ISF, box 162. For the details of the reform, see Triffin 1946.
37.
Quote from Triffin to Captain Marion Allen Leonard, November 18, 1943, p. 6, ISF, box 231. See also Triffin 1990, 27.
38.
Triffin to Captain Marion Allen Leonard, p. 5.
40.
The legislation had been delayed during the summer by opposition from the minister of agriculture, Dos Santos, who personally disliked Pedretti. Triffin became quite involved in mediating between Dos Santos and Pendretti, and eventually played a role in convincing the former to drop his opposition; Grove to Gardner and Hammond, August 25, 1944, ISF, box 230; Triffin to Board of Governors, “Second Mission to Paraguay,” January 10, 1945, ISF, box 162.
42.
Robert Triffin, “Address to the Pan American Society on Recent Monetary and Exchange Developments in Latin America,” April 11, 1945, p. 3, ISF, box 156.
43.
Triffin 1946, 22, 74.
45.
Robert Triffin to Board of Governors, “Second Mission,” January 10, 1945, p. 6.
48.
Triffin to Board of Governors, “Second Mission,” p. 5.
49.
Grove to Board of Governors, January 11, 1945, ISF, box 230. This work of Grove provides a good example of what Mitchell (2002, 8) calls the broader “politics of calculation” emerging across the world at this time. According to Grove, among Latin American central banks, only the Argentine one had organized its statistical and research department in a manner that would help it effectively address core economic problems of the country.
50.
Triffin 1946, 22, 78.
51.
Triffin to Board of Governors, January 11, 1945, p. 3.
52.
Triffin to Szymczak, “The Development of Exchange Control Policy for the International Monetary Fund,” Draft 3/1/45, RTP, box 7.
53.
Triffin to Szymczak, “The Development of Exchange Control Policy,” pp. 1–2.
55.
White to Morgenthau, May 3, 1943, CFHDW, box 9, Chron. 47.
56.
For his bilateral consultation with White, see Ness to White and Mikesell, June 4, 1943 and Gonzales to White, June 10, 1943, HDWP, box 8, folder 2.
57.
Pedretti, “The Monetary Reform,” p. 9.
58.
Hammond to Governor, October 18, 1943, p. 4, ISF, box 231.
59.
Gardner to Szymczak, “Tentative program of the Latin American group for the year 1944,” December 1, 1943, p. 2, ISF, box 148.
60.
Triffin to Hammond, July 21, 1944, p. 1, ISF, box 109.
61.
Triffin to Board, “Questions on which Board decisions or guidance are needed,” January 11, 1945, pp. 3–4, ISF, box 230.
62.
Gardner to Triffin, August 24, 1944, ISF, box 230.
63.
Triffin to Gardner, June 23, 1944, ISF, box 231.
64.
Triffin to Board of Governors, January 11, 1945; Triffin to Szymczak, “The Development of Exchange,” p. 24.
65.
Quoted in Dosman 2008, 204.
66.
Triffin to Szymczak, “The Development of Exchange,” p. 2.
67.
W. Randolph Burgess to Hammond, August 18, 1944 and Gerald Beal to Hammond, November 28, 1944, ISF, box 109.
68.
Hammond to Triffin, July 4, 1944, ISF, box 231.
69.
Triffin to Prebisch, July 23, 1945, pp. 1–2, ISF, box 162.
72.
Triffin 1946, 113; Hammond to Triffin, May 24, 1944, ISF, box 231.
73.
Gardner to Eccles, “Relations with FRBNY,” January 23, 1944, p. 2, ISF, box 148.
74.
Gardner to Eccles, “Relations with FRBNY,” 1–2.
75.
Wallich, “Comments on Draft of Paraguayan Central Bank Law,” June 7, 1944, ISF, box 162.
77.
Eduardo Montealegre to Mr. Hammond, August 2, 1944, p. 1, ISF, box 162. For the board’s support of Triffin’s work, see Triffin 1990, 26; Triffin 1981, 242.
78.
Woodlief Thomas to Board of Governors, January 16, 1946, p. 1, ISF, box 162. See also Gardner to Thomas, July 24, 1945, ISF, box 162.
79.
Triffin to Board, “Questions on which Board decisions or guidance are needed,” p. 4.
80.
Hammond to Governor, October 18, 1943, p. 3.
81.
F. F. J. Powell, September 22, 1944, p. 1, BOE, OV 167/1.
82.
Stettinius to Eccles, January 31, 1944, p. 1, DSDF, 834.51A/119. See also Willard Beaulac to Secretary of State, October 3, 1944, ISF, box 230.
83.
(No author), “Foreign Missions of the Federal Reserve System,” March 29, 1945, ISF, box 218.
84.
Hammond to Governor, October 18, 1943, p. 2. See also Hammond to Szymczak, September 9, 1943, ISF, box 231.
85.
Triffin 1946, 23, 25.
86.
Triffin, “Address,” p. 6.
88.
For Kemmerer’s similar advice everywhere, see Drake 1989, 25.
89.
Triffin, “Address,” p. 2.
92.
Dosman 2001; 2008, 218–19; Love 1996, 126–27.
93.
Triffin to Gardner, April 9, 1943, p. 1, ISF, box 162.
94.
See for example Triffin to Prebisch, July 23, 1945, p. 4.
95.
Triffin 1966 (1947), 141 n. 2.
96.
Triffin to Board of Governors, “Second Mission”; Dosman 2008, 197–202.
97.
Triffin to Board of Governors, “Second Mission,” p. 4.
98.
Dosman 2008, chaps. 6–8. Still, J. Edgar Hoover and some other US officials had raised questions about his loyalties (Dosman 2008, 151–52).
99.
Goldenweiser to Roger Evans, February 23, 1945, ISF, box 156. See also Dosman 2008, 132, 233; Gardner to Federal Reserve Board, August 18, 1944, p. 1, ISF, box 230.
100.
For Berle, see Berle and Jacoby 1973, 353. For bankers, see their interest in sponsoring his visit to Harvard in 1945; Szymczak to Nelson Rockefeller, February 5, 1945, ISF, box 156.
101.
Prebisch (1991 [1944], 197–98) cited Kindleberger’s work in his Mexico seminar in early 1944.
102.
For these ideas in Williams’s work, see Asso and Fiorito 2009.
103.
Dosman 2008, 36, 122, 131.
104.
Prebisch (1991 [1944]), 200–201. Prebisch had met White during his late 1940 trip to the United States.
105.
Prebisch to Triffin, June 17, 1945, p. 2, ISF, box 162.
106.
Triffin to Prebisch, July 23, 1945, pp. 1, 2.
107.
See for example O. E. Moore to Sproul, “Dr. Herman Max,” October 29, 1940, and Jack Corbett to Sproul, “Monetary Views of Dr. Herman Max,” November 4, 1940, ISF, box 180.
108.
See for example Triffin, “”Suggested Outline of Study for Dr. Gonzales,” December 12, 1942, ISF, box 259.
110.
Triffin to Gardner, April 9, 1943, p. 1.
111.
Triffin 1946, 74–75; Triffin to Gardner, March 15, 1944, ISF, box 231; Triffin to Board of Governors, January 11, 1945.
112.
Peña to Triffin, March 3, 1944, ISF, box 231.
113.
Hammond to Gardner, May 19, 1944, ISF, box 264.
114.
Triffin to Board, January 11, 1945; Triffin and Hammond to Board of Governors, January 11, 1945 and Hammond to Morrill, October 9, 1944, ISF, box 22; Hammond, “Exchange of Personnel for Foreign Study,” August 7, 1946, CSF 001.411.
115.
Triffin to Szymczak, “The Mexican Invitation to an Inter-American Conference of Central Banks,” p. 3, January 11, 1945, RTP, box 3.
116.
It is even overlooked in Michael Grow’s (1981) fascinating history of US-Paraguayan relations in this period and Mora’s (1998) important survey of those relations.
117.
Green 1971, chap. 4.