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| Other short titles | Gold Reserve Act of 1934 |
|---|---|
| Long title | An Act to protect the currency system of the United States, to provide for the better use of the monetary gold stock of the United States, and for other purposes. |
| Acronyms (colloquial) | GRA |
| Nicknames | Gold Reserve Act (Devaluation) |
| Enacted by | the 73rd United States Congress |
| Effective | January 30, 1934 |
| Citations | |
| Public law | Pub. L. 73–87 |
| Statutes at Large | 48 Stat. 337 |
| Legislative history | |
| |
The United States Gold Reserve Act of January 30, 1934 required that all gold and gold certificates held by the Federal Reserve be surrendered and vested in the sole title of the United States Department of the Treasury. It also prohibited the Treasury and financial institutions from redeeming dollar bills for gold, established the Exchange Stabilization Fund under control of the Treasury to control the dollar's value without the assistance (or approval) of the Federal Reserve, and authorized the president to establish the gold value of the dollar by proclamation.[1][2]
Immediately following passage of the Act, the President, Franklin D. Roosevelt, changed the statutory price of gold from $20.67 per troy ounce to $35. This price change incentivized gold miners globally to expand production and foreigners to export their gold to the United States, while simultaneously devaluing the U.S. dollar by increasing inflation. The increase in gold reserves due to the price change resulted in a large accumulation of gold in the Federal Reserve and U.S. Treasury, much of which was stored in the United States Bullion Depository at Fort Knox and other locations. The increase in gold reserves increased the money supply, lowering real interest rates which in turn increased investment in durable goods.
A year earlier, in 1933, Executive Order 6102 had made it a criminal offense for U.S. citizens to own or trade gold anywhere in the world, with exceptions for some jewelry and collector's coins. These prohibitions were relaxed starting in 1964 – gold certificates were again allowed for private investors on April 24, 1964, although the obligation to pay the certificate holder on demand in gold specie would not be honored. By 1975, Americans could again freely own and trade gold.
- ^ "White House Statement on Proclamation 2072 - Franklin D. Roosevelt" (PDF). FAME - Foundation for the Advancement of Monetary Education. January 31, 1934. Archived from the original (PDF) on 2012-04-26.
- ^ "Gold Reserve Act of 1934". Statutes at Large of the United States of America from March 1933 to June 1934. 48 (1). Washington: Government Printing Office: 337–344. 1934.