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Gold Leaf Executive Order 6102
Item number: C125
Year: AD 2015-2016
Material: Gold
Provenance: Infinity Coins 2024
This is a contemporary reproduction during AD 2015-2016, in gold leaf of Executive Order 6102, passed by President Roosevelt on April 5, AD 1933, just a month after taking office, marking the beginning of the US dollar’s status as an international currency. At that time, the US federal government, through this order, required all individuals or entities of nationalities engaged in activities within US territory to refrain from trading and retain only up to 5 ounces of gold. Before May 1st, the remaining gold had to be surrendered to the Federal Reserve at the official rate of $20.67 per ounce, with non-compliance resulting in substantial fines and ten years of imprisonment. However, certain industries or products using gold as a material, such as jewellers and collectible gold coins, were exempt from these restrictions.
The federal government enacted such stringent gold trading legislation in response to the economic downturn since the Great Depression of AD 1929, which led to banks across states facing bankruptcy and credit crises. On February 14, AD 1933, the wealthiest state of Michigan declared an indefinite “bank holiday” for banks within its borders, prompting other states to follow suit. These measures resulted in public panic and a rush to withdraw deposits, exacerbating the banking crisis. As of March 4, the day Franklin D. Roosevelt was inaugurated as the 32nd President of the United States, according to reports from the Associated Press, banks across the country had 28 states announced as “closed”; 10 states were “partially or largely closed”; and 11 states were limited to withdrawals of $5 per transaction.
On March 5, to address the public’s crisis of confidence in banks, President Roosevelt mandated a nationwide “bank holiday” at the federal level for one week, bringing order and crisis management through national intervention. On March 9, following a special session of Congress, both houses granted the President the authority to issue paper currency to banks and for the Federal Reserve to reclaim gold at a rate of $20.67 per ounce to maintain the credibility of the dollar. Subsequently, on March 12, the final day of the “bank holiday” for national banks, President Roosevelt, in his inaugural “fireside chat” broadcasted over the radio, encouraged citizens to deposit their savings into banks approved and reorganised by the government. This action resulted in over two-thirds of savings being returned to banks.
To thoroughly strengthen the resilience and credibility of banks, President Roosevelt turned his attention to the 30% of the nation’s wealth held in gold, aiming to bring this gold into government control to serve as backing for the value of the US dollar. Therefore, on April 5, the federal government passed Executive Order 6102 to restrict the circulation and trading of gold. On January 30, AD 1934, Congress furthered these measures by passing the Gold Reserve Act, which transferred the gold assets previously reclaimed by the Federal Reserve to the Treasury Department for safekeeping. The act prohibited the exchange of dollars and gold within the country and crucially allowed the President to set the price of gold. President Roosevelt utilised this to establish a new gold standard at $35 per ounce, aiming to stimulate domestic inflation and consumption while increasing foreign inflows of gold into the US, thus stabilising the value and credibility of the dollar.
The far-reaching impact of these measures solidified the fixed exchange rate between the US dollar and gold, strengthening the stable image of the dollar internationally. In AD 1944, at the end of World War II during the Bretton Woods Conference, the US dollar was further recognised by various countries as having equivalent value to gold. The restrictions on gold transactions imposed by Executive Order 6102 continued until AD 1971 when President Nixon, dissatisfied with the significant outflow of US gold reserves, announced the end of the gold standard where gold would no longer back the value of the dollar, marking the culmination of what became known as the “Nixon Shock.”