With the advent of peace Australia found itself excluded from the leading vehicle of economic cooperation of the post-war world: the International Monetary Fund. It had been excluded by its own choice – its own hesitant choice. For the next two years a decision to join or not join the Fund foundered on divisions within the Chifley Labor Government. The four, from Canberra, Washington, New York and Chunking,^[1] added their wary approval to voices supporting joining.

The current of hostility to the Fund that the four sought to moderate was impelled by three considerations.

First, it was widely held that the success of full-employment policies would be obstructed by a commitment to rigidly fixing the value of the Australian pound (except in the face of ‘fundamental disequilibrium’), as membership of the IMF would require.

Secondly, any commitment to a financial agreement triggered unpleasant associations on the Left. ‘To many Labor stalwarts it smelt of international financiers, Wall Street, ‘the Money Power’ – the ultimate forces of capitalistic evil which Labor had felt itself to be fighting down the years’ (Crisp 1960, p. 201). This resonance provoked crazed responses from maverick MPs, Eddie Ward and Jack Lang.^[2]

Finally, the treaty brought out tensions between economic autonomy and economic internationalism; or ‘independence versus dependence’ as nationalists would put it.

The four were not immune to the tug of the first and last of these three, and during the war they had sought, as supporters of the Australian Government’s policy, to obtain a more acceptable agreement.

During the war the four – like other Australian policy-makers and advisors – had more sympathy with Keynes’ Clearing Union than the Stabilisation Fund proposal of the US Treasury. Keynes’ plan was an attempt to contrive a system of stable rates that made unnecessary the deflationary policies that a commitment to fixed exchange rates had formerly entailed. It essentially amounted to granting a large pool of credit to deficit countries, thus giving these countries room to pursue full-employment policies while avoiding balance of payments crises. The plan manifested a concern to avoid full employment being sacrificed for the sake of maintaining fixed exchange rates. This sentiment was one that the four strongly shared.

The Assistant Secretary to the US Treasury, Harry Dexter White, advocated an alternative scheme, a Stabilisation Fund, which more strongly resembled the IMF that was to eventuate. The Stabilisation Fund emphasised exchange rate stability, rather than full employment, and consisted of a pool of a number of currencies and gold, accumulated from contributions by member nations, which would be deployed towards maintaining the relative values of member country currencies. As the US dollar would be pegged to gold, and as other currencies were pegged to the $US, the Stabilisation Fund would in some measure be a revival of the old gold standard, the difference being that each member country would be committing part of its gold and currency reserves to any other member country endeavouring to maintain its exchange rate.

As early as January of 1943, Wilson, fresh from consultations in the United Kingdom and the United States, had expressed his doubts to Curtin about the White scheme:

Another ‘unpalatable’ feature of the US proposals, he reported, is ‘the exalted position given to gold’. Finally, ‘a country’s rate of exchange would be much more under the control of the Stabilisation Fund than would be under the International Clearing Union’. As a consequence, Wilson believed that ‘the most useful approach from our point of view appears to be to press the British proposals in regard to the International Clearing Union as strongly as possible’.

At the Hot Springs conference of May 1943 Brigden pressed the same warning against the restoration of a gold standard, and the same support for the Clearing Union. In Brigden’s view (Brigden 1943b), the ‘C[learing]U[nion] has a more vivid sense of the realities of the post-war world’. He explained: ‘There must be an expansionist outlook, and some credit creation’. Predictably, Brigden was on guard against the ‘dangers’ of credit expansion. ‘It will come somehow and it will be dangerous. It will come better if planned and controlled’. He also complained that the draft articles of the putative Fund gave its board no guidance on policy. White sought to deflect this criticism by promising that full employment would be mentioned in the Fund’s preamble (Brigden 1943b, p. 2).

The United States had every wish to placate its allies in these discussions, but had no intention of conceding. Brigden was sensitive to how the American sense of resolution could shade into presumption.^[3] In ‘Discussions on the S[tabilisation] F[und]’, he complained of the habit of the American negotiators to treat the US Congress ‘as though it were recognised to be in fact a super-national authority. … Latin American countries and the Canadians accept it from habit. Europeans accept it with varying moods, from a state of chronic indignation among the Norwegians, to fatalistic resignation among the Continentals. The UK attitude is … quietly watchful for opportunities to escape the oppression’ (Brigden 1943b, p. 1). He added that the Canadians ‘never feel safe’ with the United States. To H.V. Evatt, the Australian External Affairs Minister, he grumbled about the ‘puppet states’ (mainly Latin American) that voted according to the United States’ say so. To his ‘horror’ this remark was passed on to White.^[4]

Other Australian advisers – above all Melville – were also critical of the proposed Stabilisation Fund. Reinforced by this doubt, on 8 June 1944, Curtin told the Australian Legation in Washington that no ministers were to attend the crucial ‘monetary conference’ that was to be held at Bretton Woods in the first three weeks of July. Australia’s presence was to be limited solely to officials. Curtin seems to have initially proposed that Brigden alone attend. In the event, four officials went: one from the Commonwealth Bank (Melville, the delegation leader), one from Treasury (F. H. Wheeler), one from the Department Post-War Reconstruction (A. H. Tange), plus ‘in practice’ Brigden. At the end of the conference the Australian delegation merely indicated its presence at the proceedings, and declined to sign the Articles of Agreement. A decision to join was put off.

For the next 20 months Brigden’s task was to keep Australia at the card table, without ever playing its hand. In the hottest summer in Washington for 70 years, Brigden coped with shingles, and met Keynes for a ‘depressing’ discussion about Lend-Lease. This meeting was a reminder that Australia had more than one international alliance to cope with, and Brigden tried to convey to Keynes Australia’s ambivalent attitude to any reliance on the traditional Imperial link:

By the time of the inaugural meeting of the IMF (and World Bank) in March 1946 (in Savannah, Georgia) Australia was still a non-member and still undecided. Nevertheless, the United States wished Australia to join, and invited Australia to send a delegation in any case. Melville and Brigden were the two Australians amongst the 600 delegates. It was at Savannah that there perished any lingering hopes that the Fund might bear Keynes’ imprint. The US pushed through its wishes with barely a consoling concession. As Brigden told Giblin ‘… when Keynes went through the ordeal (to him) of Savannah he found it very distressing. The way in which the International Monetary Fund and [World] Bank were launched was anything but propitious and the whole atmosphere of the occasion must have been very disappointing indeed to Keynes’ (RWA JBB to LFG, 21 November 1946). Keynes, to put the matter starkly, went home and died.^[6]

Brigden, too, found much to ‘dislike and disapprove’ at Savannah. It confirmed his ‘fears’, and ‘did nothing to reduce my general scepticism’ (DFTHP JBB 8 April 1946). But where could Australia turn?, Brigden asked. The old imperial connection was derelict: ‘whoever won the war’, he wrote, ‘it was not the British’. The imperial power was now itself the supplicant of the United States. The December 1945 loan agreement between the United Kingdom and the United States, imposed, in Brigden’s judgement, ‘preposterous burdens on the UK people’. Keynes, Brigden felt, did not deal ‘frankly’ with the British public.

And total isolation was not an advisable choice either, for ‘we can defend ourselves better inside an organisation than outside’. He concluded: ‘I see no real alternative to our membership of the Monetary Fund’.

From the discomfort of Chunking, Copland read the post-Savannah reports of Brigden and Melville and sent his own analysis to Chifley (DFTHP DBC 2 July 1946). He noted that the traumatic events of Australia in 1930 would seem to argue against joining the Fund; a fixed exchange rate had then prevented Australia from depreciating in the face of the slump in its export prices. The prospect of a the exchange rate being fixed – except in the case of ‘fundamental disequilibrium’ – was intimidating. The spectre of 1930 hung heavily: ‘it is ever present in the minds of all of us who have to consider the course Australia should pursue’. Copland and Giblin had, in the inter-war period, pressed hard against the gold standard, and to their minds it was – in attenuated form – being revived as a piece of ‘post-war reconstruction’. Giblin was pessimistic about Australia’s balance of payments if full employment was to prevail. How could a stable rate of exchange be preserved under full employment?^[7]

But on the other hand, Copland suggested Australia would not receive a capital inflow from the UK in the post-war period, so its vulnerability to external shocks was reduced. There was no ‘flow’ to ‘dry up’. Finally, Britain had abdicated from international leadership.

By 1946 the Chifley Government was quietly in favour of joining the IMF, but was still delaying this difficult decision. More than two years after Australia’s initial decision to stay out, Brigden was instructed to go to the September 1946 meeting of the Fund and keep alive Australian membership (DFATHP G.P.N. Watts 12 September 1946). Not long after, on 31 December 1946, the official deadline (already once extended) for any joining country to be deemed an ‘original’ member passed. And Australia was still outside. Finally, on 5 March 1947, not quite three years after Bretton Woods, Chifley manoeuvred his party into agreeing to Australia’s membership.

In the same month Wilson visited Washington, having been appointed to a United Nations committee of experts.^[8] He discovered that Brigden was suffering high and uncontrollable blood pressure, which threatened a heart attack. He told Giblin that there was ‘a probability of trouble increasing at a rate of 10 per cent per annum as long as he continues at his present work’. And Brigden was hesitating to take the obvious course of action. ‘At one moment he contemplates retirement on the 30th June with his return spread out over a period of months … and at other moments he mumbles somewhat incoherently about this, that and the other, which might keep [him] in the harness for another year or two.’ Wilson hinted that Giblin should intervene. ‘It would seem to me that somebody should make up his mind for him’ (RWA RW 10 March 1947).

Whether Giblin made up Brigden’s mind for him is not known. But Brigden resigned in the middle of 1947, with the intention of totally withdrawing from active life. He wrote to Eggleston: ‘My intentions are to retire entirely and live quietly somewhere on the outskirts of Melbourne’. His last duty was to attend the annual meeting of the IMF in London in September 1947, en route to Australia. He noted with satisfaction: ‘the F[oreign]O[ffice] has had to accept economics as a really serious influence’ (NLA JBB 20 August 1947). Wilson filled Brigden’s place as Financial Counsellor to the Australian Embassy in Washington, and as Australia’s Alternate Executive Director at the International Monetary Fund and World Bank.^[9]

On his return Brigden retreated into a retirement that was rarely interrupted. On one occasion he spoke to University of Melbourne students; a witness recalls him leaving the podium several times in mid-speech. The problems were physiological, not mental. But a watchful custody of the mind was a necessary part of the appropriate care of the body. Wilson later commented to Giblin: ‘There was never any hope, following his return from the United States, that he would be able to do serious intellectual work without undue danger …’ (RBA RW 2 November 1950). In Brigden’s world the problems of the compost heap had replaced the problems of finance. How well he faced up to the empty spaces of an enforced retirement is not clear. Giblin made sure he visited whenever possible. He pressed Eilean to at least make a phone call; such a call, he said, was always a tonic to persons ‘feeling they have been forgotten’ (NLA LFG).