On April 5, 1933, President Franklin D. Roosevelt signed Executive Order 6102 amid the Great Depression. The order prohibited the “hoarding” of gold coins, bullion, and certificates within the United States, essentially criminalizing any individual or corporation’s possession of monetary gold.
The Gold Reserve Act of 1934, which began in 1933 with the passing of Executive Order 6102, was a significant law passed in the United States that accomplished several key things related to gold and the country’s monetary policy:
Ended private holding of gold: The act solidified the suspension and the transfer of gold from private hands to the U.S. Treasury, which began in 1933 with Executive Order 6102.
Transferred gold to U.S. Treasury: The act required that all gold and gold certificates held by the Federal Reserve be surrendered to the U.S. Treasury.
Revalued gold and devalued the dollar: The act allowed for the revaluation of gold to $35 per ounce from $20.67 and, therefore, devalued the U.S. dollar. This was intended to stimulate the economy during the Great Depression by raising the prices of goods and services.
Established Exchange Stabilization Fund: The profit derived from the revaluation of gold was used to create the Exchange Stabilization Fund, which is used to stabilize the exchange value of U.S. currency without the approval of the federal reserve.
The Gold Reserve Act of 1934 was critical in ending the gold standard and moving the U.S. and other countries toward a fiat currency system.
