The economic depression and the epidemic of bank failures in the early 1930s led to sweeping reforms in the nation’s monetary structure. Executive proclamations issued by President Franklin D. Roosevelt in March and April 1933 prohibited gold exports except under government
President Franklin D. Roosevelt prohibits gold exports.
license, and called in all gold and gold certificates from general circulation, thus ending the gold standard. Under the Gold Reserve Act of Jan. 30, 1934, the country returned to a modified gold standard with a devalued dollar. The act gave the president authority to lower the weight of the gold dollar to between 50 and 60 percent of its former gold content. The following day the president issued a proclamation reducing the gold content of the dollar to 59 percent of that established by the Gold Standard Act of 1900, or from 23.22 to 13.71 grains of fine gold.
The years 1933 and 1934 were also marked by important legislation regarding silver. Under the Thomas Amendment to the Emergency Farm Relief Act of May 12, 1933 (commonly known as the Inflation Act), the president was given the power to restore unlimited coinage of silver under a bimetallic system. The Silver Purchase Act, which was signed by the president on June 19, 1934, authorized the nationalization of silver and declared it to be the policy of the U.S. to have the silver holdings of the Treasury ultimately make up a maximum of one-quarter of the
A wagon full of U.S. silver bullion (1897).
value of the nation’s combined monetary gold and silver stocks. On Aug. 9, 1934, the president issued an executive order requiring that all silver in the U.S., with the exception of certain categories such as silver coins, fabricated silver, and silver owned by foreign governments, be delivered to the mints to be coined or held as bullion for later coinage. Under the Silver Purchase Act and subsequent legislation the Treasury purchased large quantities of silver abroad and from domestic producers, which tended to raise the price of the metal and curtail the monetary use of silver abroad, especially in China and India.
“Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.”
~Trump: Art of the Deal, by Donald J. Trump and Tony Schwartz (1987)
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