Gold and the Gold Standard.pdf

GOLD AND THE GOLD STANDARD
silver, and the granting to the President, for more
than a decade at least, almost supreme dictatorial
power over the nation's currency.
On July 2, 1933, came the President's "bolt of
lightning" message to Secretary Hull in London that
wrecked the World Economic Conference from which
we and the leading countries of Europe had reason
to expect much for the. cause of international monetary
stabilization on a gold basis.
A few months after this, in a radio address on
October 22, the President suddenly and without
previous public discussion announced the adoption
as a United States policy of the Warren gold purchase
plan, which was intended to raise commodity prices
quickly to the desired level-presumably that of
1926-and thereafter to maintain them at that
level, through a system of currency management.
The plan, which was not a success, was quietly discontinued
early in 1934. 1
By the end of 1933, practically all hope had
gone for any return to the gold-coin standard with
the old gold dollar as the legal unit of value.
The New Type of American Gold Standard
The gold reserve law of 1934, which became
effective at the end of January, gave to the United
States a new legal monetary unit of about the gold
value possessed by the paper dollar of that date, and
provided. the country with a currency system of a
1 Cf. KEMMERER, EDWIN WALTER, Kemmerer On Money, Chap. III.
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