Gold and the Gold Standard.pdf

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· BREAKDOWN, RECOVERY AND RELAPSE
only' give legal recognition to its depreciation when that
depreciation has already come about de facto. It has frequently
been the case-"-we have numerous examples of recent yearsthat
either through the misfortunes of war, or mistakes of
policy, or the collapse of prices, currencies have fallen so far
below par that their restoration would involve either great
social injustices or national efforts and sacrifices, for which no
°adequatecompensation can be expected.••. But it would
b'e to adopt an entirely new principle, and one which would undoubtedly
be an immense shock to the international financial
world, if the Government of the greatest creditor nation were
deliberately and by an act of positive policy to announce one
morning that it had redufed by law the value of its currency from
the par at which it was standing to some lower value . . . 1 In the
atmosphere of crisis and distress which would inevitably surround
such an extreme and sensationa! measure as the devaluation
of sterling, we might well :find that the state of affairs
immediately ensuing on such an event would be worse than
that which had preceded it.
Instead of taking action in the late spring of
1933, looking toward an early return to the pre­
"bank..;holiday" gold standard, the Roosevelt administration
resorted to a series of radical measures
deliberately depreciating the gold value of the dollar.
These measures resulted in the giving up of the goldcoin
standard, a permanent debasement of the
, nation's gold monetary unit, the abrogation of tens
of billions of dollars of specific gold contracts, includ­
ing those of the government itself, the outlawing
the circulation of all United States gold coins and
gold certificates, the nationalization· of our 'gold and
1 The italics are my own.
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