The Gold Reserve Act of 1933

Once the Depression started, the widespread failure of banks led to a massive deflation. Gold came under attack, as it had in the previous century, as the culprit. The cry that there "wasn't enough money" was heard again, and Congress decided to give President Roosevelt the power to call in all the gold coinage, "regulate the Value therefore," and create more money. The Gold Reserve Act of 1933 required that all gold coins and gold certificates be surrendered to the Treasury. This was initially said to be a temporary measure but it would last more than thirty years. Americans were soon forbidden to hold gold (or gold certificates). Consequently, the Series 1934 gold certificates were not a public issue. They were only intended to circulate among Federal Reserve Banks and therefore read, "Payable to the Bearer on Demand as Authorized by Law." Like the circulating Silver Certificates of that time, the 1934 Gold Certificates also now specified payment "in gold" rather than "in gold coin," so that the value of the dollar could be easily repegged -- though that value actually remained at $35 a troy ounce from the 1930's to the 1970's. It became legal to hold gold certificates on April 24, 1964 although the obligation to "pay the bearer on demand" in "gold coin" would not be honored. By the 1970's Americans could again freely own and trade gold.