The historical origins of US exchange market intervention policy

This paper examines the historical precedents of US exchange market intervention. Before 1934 we describe operations by the Second Bank of the United States, the US Treasury and the Federal Reserve. We then examine the operations of the Exchange Stabilization Fund, created in 1934 as a Treasury Department agency. Our study, based on unique, unpublished sources, analyses ESF dealings with the Banque de France and the Bank of England before and after the Tripartite Agreement of 1936. Finally, using unique data we discuss US efforts from 1961 through 1972 to defend the dollar's parity under the Bretton Woods System. Copyright (c) 2007 John Wiley & Sons, Ltd.