Money Makers
Forthcoming in September, from Basic Books

As readers of this blog know, Franklin Roosevelt declared he had taken the US off the gold standard on March 6, 1933, as the first substantial act of his presidency. But scholars have not been so quick to accept this date or, with firmness, any other.

When Roosevelt first said he had taken the US off the gold standard, he didn’t want to make too great a fuss about it because he was trying to quiet a panic that had nearly broken the Federal Reserve System. He hoped Americans would bring their gold back for deposit in the nation’s vaults. And they did. Even though the papers were reporting that the president might issue scrip for temporary currency; even though the Emergency Banking Act provided that Federal Reserve notes could be backed by commercial bank assets, people generally preferred paper money to gold, so long as they trusted the paper money – which, with Roosevelt’s assurances, they did, as you can see from the chart. [click to continue…]