This Day in History: US President Franklin D. Roosevelt signed Executive Order 6102 on this day in 1933 "forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States." With this Executive Order, gold as legal money disappeared in the United States, paving the way for the government to engage in near-unconstrained debasement of the currency. Without EO 6102 Roosevelt would be unable to enact his New Deal spending programs.
"The monetary system of the United States at the time of the Depression could not sustain inflation very long because the country was on a gold standard. If people sensed that the government was printing too many paper dollars, by law they could redeem those dollars from the government’s store of gold. Moreover, gold coins circulated along with silver dollars, half-dollars, quarters, and dimes. If people were exchanging their dollars for gold, then the government’s own gold supply would be diminished. Since the gold standard included requirements that the country’s money supply have at least a 40 percent gold backing, a drain on gold reserves would have forced the government to stop printing so many dollars. Therefore, the plans of the New Dealers ran headlong into the reality of the gold standard and its check on inflation." Source
This is the same revered administration that ordered the mass destruction of crops, as well as animals such as pigs and chickens, at a time of Depression when the country was hungry. "The aim was explicitly to raise the prices of all farm commodities. The preposterous economic 'theory' behind this was that if prices and wages were jacked up, that would increase 'purchasing power,' which was the way to lift the country out of the Depression." Source
Despite all of the above and all of the spending, the New Deal was an abject failure. On May 6, 1939, Henry Morgenthau, Roosevelt’s treasury secretary, confirmed this: “We have tried spending money. We are spending more than we have ever spent before and it does not work ... After eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!”
Any centralized governmental plan to invigorate an economy has always failed, and these plans are always proposed by elites who are not very bright. Raymond Moley wrote in May 1936 about Roosevelt: "I was impressed as never before by the utter lack of logic of the man, the scantiness of his precise knowledge of things that he was talking about, by the gross inaccuracies in his statements. . . ."
The limitation on gold ownership in the United States was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars, and certificates by an Act of Congress, codified in Pub.L. 93–373, which went into effect December 31, 1974.
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