Gold Standard Act
Pub. L. 56–41 | |
| Statutes at Large | 31 Stat. 45 |
|---|---|
| Legislative history | |
| |
The Gold Standard Act was an
The Act formalized the American gold standard that the Coinage Act of 1873, which demonetized silver, had established by default. Before and after the Act, silver currency including silver certificates and the silver dollar circulated at face value as fiat currency not redeemable for gold.[2]
The Act fixed the value of one dollar at 25.8 grains of 90% pure gold, equivalent to about $20.67 per troy ounce, very near its historic value. American circulating gold coins of the period comprised an alloy of 90% gold and 10% copper for durability.
After the realigning election of 1932 following the onset of the Great Depression, from March 1933 the gold standard was abandoned, and the Act abrogated, by a coordinated series of policy changes including executive orders by President Franklin D. Roosevelt,[3] new laws,[4] and controversial Supreme Court rulings.
After World War II international agreements comprising the Bretton Woods system formally restored foreign central banks' ability to exchange United States dollars for gold at a fixed price. World trade growth increasingly stressed this system, which was abandoned in the Nixon shock of 1971.[5] Attempts to reform the Bretton Woods system quickly proved unworkable and failed. All modern currencies thus became fiat currencies freely floating and subject to market forces despite capital controls imposed by some central banks, with gold as a commodity.
See also
- Double eagle, one of a variety of U.S. gold coins minted in dollar units at $20.67/ounce
- Gold standard
- Specie Payment Resumption Act
- Bland–Allison Act
- Sherman Silver Purchase Act
References
- Federal Reserve notes, but excluding silver certificates and National Bank noteswhich were secured by government bonds issuing national banks had deposited with the Treasury. Though the Act did not require national banks to redeem their issued National Bank notes in gold coin, ordinarily they would, as might other banks.
- JSTOR 2140799.
- ^ Federal Reserve. "Roosevelt's Gold Program".
- ^ Wikisource. "Joint Resolution of June 5, 1933".
- ^ James Stuart Olson. Historical Dictionary of the Great Depression, 1929–1940. p. 131.
Further reading
- Allen, Larry (2009). The Encyclopedia of Money (2nd ed.). ISBN 978-1598842517.
- McCulley, Richard T. (1980). The Origins of the Federal Reserve Act of 1913: Banks and Politics during the Progressive Era, 1897–1913 (Ph.D.). University of Texas.
External links
- Gold Standard Act (text of the Act)
- Gold Standard Act of 1900 (discussion)