When Franklin Roosevelt Dropped a Bombshell on Gold – by Sebastian Edwards (Bloomberg News – May 23, 2018)


The global reaction in fall 1933 was calm bewilderment. Second of four excerpts from “American Default.”

On Sunday, Oct. 22, 1933, President Roosevelt delivered the fourth of his fireside chats that year. He opened by summarizing his administration’s accomplishments.

He talked about public works and the legislation passed during his first hundred days; he praised the National Recovery Act and the Agricultural Adjustment Act; and he told the American public that things were improving. He asserted that since his inauguration on March 4, four million people had found work.

He reiterated that the definite goal of the government was to “restore commodity price levels, [and] to make possible the payment of public and private debts more nearly at the price level at which they were incurred.”

With regard to currency values, he stated that “when we have restored the price level, we shall seek to establish and maintain a dollar which will not change its purchasing and debt-paying power during the succeeding generation.” It was important, he asserted, not to put the cart before the horse.

He said that his government was building an “edifice of recovery” with many columns, and that “the work on all of them must proceed without let or hindrance.” He then declared that one of these columns, monetary policy, was less developed than the others and that it was time to strengthen it.

For the rest of this article: https://www.bloomberg.com/view/articles/2018-05-23/fdr-s-bombshell-on-gold