Executive Order
On 4 March 1933, Roosevelt was inaugurated and within days he signed executive proclamations closing all banks for a “bank holiday” freezing foreign exchange and preventing banks from paying out gold coin when they reopened. A month later he signed an executive order requiring U.S. citizens to turn over their private property (gold) to the Federal Reserve, in exchange for Federal Reserve notes.
On 20 April, he signed another executive order, ending the right of U.S. citizens to buy, or trade-in, foreign currencies, and/or transfer currency to accounts outside the U.S.
On 28 August 1933, Roosevelt signed Executive Order 6260, outlawing the constitutional rights of U.S. citizens to own gold. To keep from having to default on its commitments (declare bankruptcy) and to keep concealed the fraud of fractional reserve banking, the banking system’s only choice was to get the government to make gold (the legal money of our constitution, an inert, inanimate element) illegal for U.S. citizens to own. Roosevelt gladly obliged.
The government was no longer a government of the people, by the people, for the people. Instead, it was a government of the bankers, by the bankers, for the bankers.
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On 31 January 1934, Roosevelt signed an executive proclamation effectively devaluing the dollar. Before this proclamation, it took $20.67 to buy one troy ounce of gold. But now, since the dollar instantly had 40.09 percent less purchasing power, it took $35 to buy the same amount of gold. This also meant that, with regard to international trade, the government had just stolen 40.09 percent of the purchasing power of the entire currency supply of the people of the U.S. – all with the stroke of a pen. That is the power of fiat currency.
But despite the efforts of the U.S. government, gold won in the end. Gold and the will of the public forced the government’s hand. By forbidding the U.S. population from laying claim to any of its own gold, and by devaluing the U.S. dollar, the U.S. was able to avert international runs on the dollar and was able to continue international trade under the gold standard. By declaring the claim checks from foreign central banks to purchase each unit of gold, there was now a far lower multiple of claim checks to gold, and the fractional reserve system was once again manageable.
But all the pain and suffering could have been avoided. Gold and silver require discipline and constraint from banks and governments, and both banks and governments resent gold for it. Numerous factors contributed to the Great Depression, but there was only one root cause. Governments around the world, along with the Federal Reserve, foreign central banks and commercial banks, all tried to cheat gold.
From the book: “Guide to Investing in Gold and Silver” by Michael Maloney
