It did. By design.
And certainly almost no one who voted in November, 1932 for a sound gold standard money according to the Glass money plank in the platform could have believed that less than a year later, in a radio address reviewing the extraordinary monetary acts of the New Deal, the President would be saying: "We are thus continuing to move toward a managed currency."
The third step was a decree by the President requiring all persons and corporations whatever to divest themselves of gold and hand it over to the government. The law authorizing him to do that had fixed the penalty of non-compliance at a fine equal to twice the value of the gold. The executive decree added the penalty of imprisonment.
In view of further intentions not yet disclosed it was imperative for the government to get possession of all the gold. With a lot of gold in private hands its control of money, banking, and credit could have been seriously challenged. All that the government asked for at first was possession of the gold, as if it were a trust. For their gold as they gave it up people received paper money, but this paper money was still gold standard money that is to say, it had always been exchangeable for gold dollar for dollar, and people supposed that it would be so again, when the crisis passed. Not a word had yet been said about devaluing the dollar or repudiating the gold standard. The idea held out was that a: people surrendered their gold they were supporting the nation's credit.
This decree calling in the gold was put forth or April 5. There was then an awkward interlude. The Treasury was empty. It had to sell some bonds. If people knew what was going to happen they might hesitate to buy new Treasury bonds. Knowing that it was going to devalue the dollar, knowing that it was going to repudiate the gold redemption clause in its bonds, even while it was writing the law of repudiation, the government nevertheless issued and sold to the people bonds engraved as usual, that is, with the promise of the United States Government to pay the interest and redeem the principal "in United States gold coin of the present standard of value."
The fifth step was the act of repudiation. By resolution June 5, 1933, the Congress repudiated the gold redemption clause in all government obligations, saying they should be payable when due in any kind of money the government might see fit to provide; and, going further, it declared that the same traditional redemption clause in all private contracts, such, for example, as railroad and other corporation bonds, was contrary to public policy and therefore invalid.
When by the Inflation Amendment the dollar was cut loose from gold it did not immediately fall. That was because, in spite of everything, it was the best piece of money in the whole world. Well then, when the dollar did not fall headlong of its own weight the government began to club it down, and the club it used to beat it with was gold. In the President's words the procedure was like this: "I am authorizing the Reconstruction Finance Corporation to buy newly mined gold in the United States at prices to be determined from time to time after consultation with the Secretary of the Treasury and the President. Whenever necessary to the end in view we shall also buy or sell gold in the world market. My aim in taking this step is to establish and maintain continuous control. This is a policy and not an expedient."
LOL! If you are like me, you’ll be posting excerpts from that old thread for quite awhile - it is ALL so relevant to today!
Nixon ended the Gold Standard. The price of the US$ was 35 to one ounce of gold until He said we will no longer pay out gold at $35 per ounce.
At the time gold was fetching $40 per ounce and was leaving Fort Knox at a terrific rate. One could buy gold at for knox for $35 and sell it in New york or London for $40. He had no choice