The president who issued an order often colloquially referred to as "banning gold" for private citizens was Franklin D. Roosevelt.
On April 5, 1933, President Roosevelt issued Executive Order 6102, which effectively restricted the private ownership of gold in the United States. This significant action was taken during the Great Depression to help stabilize the U.S. financial system and prevent further economic collapse.
Details of Executive Order 6102
Executive Order 6102 did not completely ban all gold ownership, but it specifically aimed to stop the private hoarding of gold. The order "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States." Citizens were required to deliver their gold to the Federal Reserve in exchange for U.S. currency at a fixed price.
Here are the key aspects of Roosevelt's gold order:
- President: Franklin D. Roosevelt
- Date Issued: April 5, 1933
- Order Name: Executive Order 6102
- Primary Action: Forbade the hoarding of gold coin, gold bullion, and gold certificates by private individuals and corporations.
- Exemptions: Some exceptions were made for industrial, professional, or artistic uses of gold, as well as for customary use in the arts and professions.
- Legal Basis: The order was issued under the authority of the Trading with the Enemy Act of 1917, which had been amended by the Emergency Banking Act in March 1933.
Why Was Gold "Banned"?
The move was a drastic measure intended to achieve several critical objectives during a severe economic crisis:
- Combat Deflation: By reducing the amount of gold in private circulation, the government could increase the money supply, counteracting the deflationary pressures of the Great Depression.
- Stabilize the Banking System: The Emergency Banking Act, enacted shortly before the Executive Order, closed banks temporarily. Confiscating gold allowed the Federal Reserve to expand its reserves, providing liquidity to banks and preventing runs.
- Fund Government Spending: The devaluation of the dollar against gold, which followed the order, allowed the government to effectively pay off its debts with cheaper dollars, freeing up funds for New Deal programs aimed at economic recovery.
The Impact and Legacy of the Gold Restriction
The restriction on gold ownership remained largely in place for over four decades. It wasn't until December 31, 1974, that President Gerald Ford signed legislation officially restoring the right of U.S. citizens to own gold bullion.
To summarize the key information:
| Aspect | Detail |
|---|---|
| President | Franklin D. Roosevelt |
| Executive Order | 6102 |
| Year Issued | 1933 |
| Purpose | To forbid the hoarding of gold coin, bullion, and certificates by private citizens |
| Authority Used | Trading with the Enemy Act of 1917, Emergency Banking Act (1933) |
| Restrictions Lifted | 1974 (under President Gerald Ford) |
This action fundamentally changed the relationship between U.S. currency and gold, moving the country further away from the gold standard and giving the government greater control over monetary policy.
