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FDR takes United States off gold standard - HISTORY

FDR takes United States off gold standard

On June 5, 1933, the United States went off the gold standard, a monetary system in which currency is backed by gold, when Congress 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 Depression 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 Keynesian 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 pressures, 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 Reserve 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 million of gold certificates. Two months later, a joint resolution of Congress abrogated 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. In 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 States would no longer convert dollars to gold at a fixed value, thus completely abandoning the gold standard. In 1974, President Gerald Ford signed legislation that permitted Americans again to own gold bullion.

MIDDLE EAST
1967
Six-Day War begins
Israel responds to an ominous build-up of Arab forces along its borders by launching simultaneous attacks against Egypt and Syria. Jordan subsequently entered the fray, but the Arab coalition was no match for Israel’s proficient armed forces. In six days of fighting, Israel ...read more

U.S. PRESIDENTS
2004
Former U.S. president Ronald Reagan dies
On June 5, 2004, Ronald Wilson Reagan, the 40th president of the United States, dies, after a long struggle with Alzheimer’s disease. Reagan, who was also a well-known actor and served as governor of California, was a popular president known for restoring American confidence ...read more

GREAT BRITAIN
1963
British Secretary of War John Profumo resigns amid sex scandal
On June 5, 1963, British Secretary of War John Profumo resigns his post following revelations that he had lied to the House of Commons about his sexual affair with Christine Keeler, an alleged prostitute. At the time of the affair, Keeler was also involved with Yevgeny.

U.S. PRESIDENTS
1888
President Cleveland denies widow her husband’s military pension
On June 5, 1888, President Grover Cleveland vetoes a bill that would have given a pension to war widow Johanna Loewinger, whose husband died 14 years after being discharged from the army. Mr. Loewinger served in the Civil War, enlisting on June 28, 1861. 

ART, LITERATURE, AND FILM HISTORY
1956
Elvis rocks the “The Milton Berle Show”
By the end of 1955, Elvis Presley had nearly 18 months of nonstop touring behind him and two dozen singles already under his belt, though his only hits were on the Country and Western charts. He was a hardworking and hard-to-categorize up-and-comer.

ART, LITERATURE, AND FILM HISTORY
2004
Jennifer Lopez marries Marc Anthony
On June 5, 2004, some 40 guests watch as the pop star and actress Jennifer Lopez weds her third husband, the singer Marc Anthony, in an intimate ceremony held in the backyard of Lopez’s home in Los Angeles. Lopez was born in 1970 in the Bronx, New York.

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  1. SamJune 6, 2020 at 2:29 PM

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