Reactions to U.S. actions expressed by executive directors on August 16 illustrated the initial reactions of most monetary authorities. There was indeed an atmosphere of crisis. Many executive directors have pressed Mr. Dale for the intentions of the U.S. authorities, particularly with respect to the exchange rate situation, which would occur immediately, and the import surcharge. Some felt that there was an urgent need to negotiate new values in the coming days. When the Executive Directors took up a draft decision that contained the Fund`s response to the U.S. communication, Dale said that U.S. authorities believed that U.S. measures were essential to create the dynamism of industrialized countries in the form of exchange rate and negotiation measures, which are essential to correct the imbalance in global payments. They therefore preferred that the Fund not make a decision at this stage. Mr.

Viénot objected and was surprised that the Fund had only “taken notice” in the draft decision of the actions taken by the United States; He preferred that the Fund express its opposition to the US action, which he said was “a clear deviance from the statutes”. But more importantly, there were a number of fundamental economic reasons why a depreciation of the dollar was avoided by raising the price of gold. On the one hand, it was considered possible that other countries could also increase the price of gold against their currencies, thus reducing the desired effect of a reorientation of the dollar against these other currencies. In addition, the dollar was the world`s largest reserve currency. For a number of reasons, many countries have accumulated large stocks of dollars since the Second World War. In order not to jeopardize the stability of the dollar, several countries, especially after 1965, had waived their right to convert these stocks into gold. A devaluation of the dollar would have a negative impact on the value of countries` dollar reserves. The regime adopted in the Bretton Woods system was somewhat complex compared to the existing gold standard. For a few years, staff in the Fund`s research department had developed a multilateral exchange rate model (merm) to analyze the impact of exchange rate changes on external trade flows.3 In early 1971, the stick began to use the model closely to study the impact of the exchange rate reorientation of major currencies on international cash flows and calculations for exchange rate changes in 11 currencies of the countries. Group of Ten and Switzerland, which would correct existing current account imbalances.