The Gold Standard Act was an Act of the United States Congress, signed by President William McKinley and effective on March 14, 1900, defining the United States dollar by gold weight and requiring the United States Treasury to redeem, on demand and in gold coin only, paper currency the Act specified.[1]
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| Long title | An Act to define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes. |
|---|---|
| Nicknames | Gold Standard Act of 1900 |
| Enacted by | the 56th United States Congress |
| Effective | March 14, 1900 |
| Citations | |
| Public law | Pub. L. 56–41 |
| Statutes at Large | 31 Stat. 45 |
| Legislative history | |
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The Act formalized the American gold standard that the Coinage Act of 1873, which demonetized silver, and the Resumption Act of 1875, which made all legal tender notes redeemable in gold at the Treasury, had established by default.[2][3] Before and after the Act, silver currency including silver certificates and the silver dollar circulated at face value as fiat currency not redeemable for gold.[4]
The Act fixed the value of one dollar at 25.8 grains of 90% pure gold, equivalent to about $20.67 per troy ounce, very near its historic value. American circulating gold coins of the period comprised an alloy of 90% gold and 10% copper for durability.
After the realigning election of 1932 following the onset of the Great Depression, from March 1933 the gold standard was abandoned, and the Act abrogated, by a coordinated series of policy changes including executive orders by President Franklin D. Roosevelt,[5] new laws,[6] and controversial Supreme Court rulings.
After World War II international agreements comprising the Bretton Woods system formally restored foreign central banks' ability to exchange United States dollars for gold at a fixed price. World trade growth increasingly stressed this system, which was abandoned in the Nixon shock of 1971.[7] Attempts to reform the Bretton Woods system quickly proved unworkable and failed. All modern currencies thus became fiat currencies freely floating and subject to market forces despite capital controls imposed by some central banks, with gold as a commodity.[dubious – discuss]
See also
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- Double eagle, one of a variety of U.S. gold coins minted in dollar units at $20.67/ounce
- Gold standard
- Specie Payment Resumption Act
- Bland–Allison Act
- Sherman Silver Purchase Act
References
edit- ^ Including gold certificates, United States notes, Treasury notes, and later Federal Reserve notes, but excluding silver certificates and National Bank notes which were secured by government bonds issuing national banks had deposited with the Treasury. Though the Act did not require national banks to redeem their issued National Bank notes in gold coin, ordinarily they would, as might other banks.
- ^ Taussig, F. W. (1900). "The Currency Act of 1900". The Quarterly Journal of Economics. 14 (3): 394–415. doi:10.2307/1882566. ISSN 0033-5533. JSTOR 1882566.
- ^ Falkner, Roland P. (1900). "The Currency Law of 1900". The Annals of the American Academy of Political and Social Science. 16: 33–55. ISSN 0002-7162.
- ^ Johnson, Joseph French (1900). "The Currency Act of March 14, 1900". Political Science Quarterly. 15 (3): 482–507. doi:10.2307/2140799. ISSN 0032-3195. JSTOR 2140799.
- ^ Federal Reserve. "Roosevelt's Gold Program".
- ^ Wikisource. "Joint Resolution of June 5, 1933".
- ^ James Stuart Olson. Historical Dictionary of the Great Depression, 1929–1940. p. 131.
Further reading
edit- Allen, Larry (2009). The Encyclopedia of Money (2nd ed.). Santa Barbara, CA: ABC-CLIO. pp. 183–185. ISBN 978-1598842517.
- McCulley, Richard T. (1980). The Origins of the Federal Reserve Act of 1913: Banks and Politics during the Progressive Era, 1897–1913 (Ph.D.). University of Texas.
External links
edit- Gold Standard Act (text of the Act)
- Gold Standard Act of 1900 (discussion)