Message:21125 In: TODAY.WW
From: KF5JRVDate: Mon, 20 Apr 26 05:13:00 Z
Newsgroups: TODAY.WW
Subject: Today in History - Apr 20
Message-ID: <10443_KD5TCY>
Path: N2NOV|VE2PKT|VE3CGR|KD5TCY
R:260420/0534z @:N2NOV.#RICH.NY.USA.NOAM $:10443_KD5TCY
R:260420/0534Z 5906@VE2PKT.#TRV.QC.CAN.NOAM LinBPQ6.0.25
R:260420/0534Z 75512@VE3CGR.#SCON.ON.CAN.NOAM LinBPQ6.0.25
R:260420/0513Z 10443@KD5TCY.#NWAR.AR.USA.NA BPQK6.0.24
On April 20, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Co
ngress enacted a joint resolution nullifying the right of creditors to demand payment in gold. The United States had been on a
gold standard since 1879, except for an embargo on gold exports during World War I, but bank failures during the Great Depressi
on of the 1930s frightened the public into hoarding gold, making the policy untenable.
Soon after taking office in March 1933, President Roosevelt declared a nationwide bank moratorium in order to prevent a run on
the banks by consumers lacking confidence in the economy. He also forbade banks to pay out gold or to export it. According to K
eynesian economic theory, one of the best ways to fight off an economic downturn is to inflate the money supply. And increasing
the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pr
essures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.
On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other
money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reser
ve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 mi
llion of gold certificates. In early June, a joint resolution of Congress repealed the gold clauses in many public and private
obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. I
n 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve’s
balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.
The government held the $35 per ounce price until August 15, 1971, when President Richard Nixon announced that the United State
s would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Ge
rald Ford signed legislation that permitted Americans again to own gold bullion
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