By early 1933, widespread bank failures and public withdrawals were putting heavy pressure on U.S. banks and on the country’s gold reserves. As people tried to convert deposits into cash and gold, the financial system faced a fast-moving confidence crisis. This instability set the stage for emergency federal action on banks and gold.
President Franklin D. Roosevelt issued Proclamation 2039, ordering a nationwide "bank holiday" from March 6 to March 9, 1933, suspending most banking transactions. The proclamation cited heavy withdrawals of gold and currency and a national emergency. The pause aimed to stop panic withdrawals while the government prepared stabilization measures.
Congress passed, and Roosevelt signed, the Emergency Banking Act, providing legal tools to reopen solvent banks and supply needed currency. It also strengthened federal authority to regulate gold and foreign-exchange transactions under emergency powers. This law became a key legal foundation for later gold-restriction orders.
Roosevelt signed Executive Order 6102, prohibiting most private “hoarding” of gold coin, gold bullion, and gold certificates in the continental United States beyond specified exemptions. It required people and businesses to deliver covered gold to the banking system by May 1, 1933, in exchange for paper currency at the official price. The order aimed to concentrate gold under government control and reduce pressures on the banking system.
In April 1933, the Roosevelt administration moved to end domestic convertibility of dollars into gold as part of its broader recovery strategy. This shift meant gold was no longer freely available for redemption, allowing more flexible monetary policy. The change was closely tied to the government’s effort to stop gold outflows and raise prices during the Great Depression.
Congress passed a Joint Resolution declaring contract provisions demanding payment “in gold” (or in amounts measured by gold) to be against public policy. It required covered obligations to be discharged “dollar for dollar” in legal tender, even if the contract had a gold clause. This reduced legal and financial obstacles to changing the dollar’s gold value.
Roosevelt issued Executive Order 6260, which revoked earlier gold-related executive orders (including EO 6102) but continued and expanded federal regulation of gold, foreign exchange, and currency movements under the declared emergency. The order required licensing and reporting for many gold-related activities and reinforced penalties for violations. This helped standardize controls as the administration prepared longer-term legislative changes.
Roosevelt signed the Gold Reserve Act, described by the Federal Reserve as the culmination of the administration’s 1933–1934 gold program. The act transferred ownership of “monetary gold” from the Federal Reserve system to the U.S. Treasury and restricted redemption of dollars for gold. This formally restructured how gold backed the U.S. monetary system.
The Gold Reserve Act established a $2 billion Exchange Stabilization Fund (ESF) under Treasury control, using profits from the gold revaluation. The ESF could buy and sell gold and foreign exchange to influence the dollar’s exchange value. This created a lasting tool for U.S. exchange-rate and financial stability operations.
The Gold Reserve Act enabled a devaluation of the dollar by raising the official price of gold from $20.67 per ounce to $35 per ounce. In practical terms, this meant the dollar’s gold content was reduced, and the government captured gains from the revaluation of its gold holdings. The policy was intended to support higher prices and economic recovery during the Great Depression.
In 1935, the Supreme Court decided a set of “Gold Clause Cases,” addressing challenges to the government’s removal of gold-payment rights in contracts and federal obligations. The decisions generally upheld the government’s actions, limiting creditor remedies based on gold clauses and reinforcing the new monetary framework. This judicial outcome reduced legal uncertainty around the 1933–1934 gold policy shift.
Congress lifted restrictions on private ownership of gold effective December 31, 1974, ending the long domestic ban that began in the Great Depression era. In a 1974 statement, the Treasury clarified that the 1933 Gold Clause Joint Resolution still applied to gold-clause contract provisions even after ownership rules changed. This closing shift marks how the 1933–1934 emergency gold policies evolved into a new, more modern monetary and legal landscape.
U.S. Gold Policies: Executive Order 6102 and the Gold Reserve Act (1933–1934)