The events of the beginning of the twentieth century have been one of the most devastating periods in world history, not just politically but economically as well. In the late 1920s and 1930s, governments all over the world tried to protect themselves from economic crisis by putting up trade barriers and devaluing their currencies. By doing this, every country assumed that they would, by some means manage to keep their economy afloat while everyone else's sank. However, it was evident that this "beggar thy neighbor" economic policy had aggravated the Great Depression and that a new cure was necessary for the well being of the people. .
After World War 1, people found themselves wanting peace more than they ever had before after seeing the destruction that has arose from the war. The people needed to rebuild the war-torn economies of Europe and create a sense of collective security among all nations. Collective security was the belief that by uniting nations, they could help protect each other from an attacking nation. Also it was believed that once the countries are united, there could be more done to help enforce the rights of smaller nations in conflict with larger ones. In an attempt to prevent another world war, 63 nations joined the League of Nations. But that's just what it was: an attempt. There were many flaws with this organization, but specifically some of the world's most powerful countries (such as the United States) never joined, which would've enabled the League of Nations to have more power . Also, rather than opposing aggressions, we were led once again into another world war.
By the time the Second World War was over, there was an increasing desire to construct a new international monetary system that would create a stable exchange system, a reserve asset (the gold standard), control over the international flows, availability of short- term loans to countries facing a temporary balance of payments crisis and rules to keep economies open to trade .
