The 1933 Gold Recall and the Gold Reserve Act of 1934
In the depths of the Great Depression, the United States government took a step that still surprises people today: it required citizens to hand over most of their gold coins, bullion and gold certificates. A year later, it raised the official price of gold by more than two-thirds. These measures reshaped American monetary policy and left a lasting mark on how some investors think about holding gold.
The banking crisis of early 1933
By early 1933, the American banking system was in crisis. Thousands of banks had failed since 1930, and depositors were withdrawing cash and gold. Foreign holders were also converting dollars into gold, draining reserves. When Franklin D. Roosevelt took office in March 1933, he declared a national bank holiday, closing banks temporarily, and Congress quickly passed the Emergency Banking Act, which gave the president broad powers over gold and currency.
Executive Order 6102
On 5 April 1933, Roosevelt signed Executive Order 6102. It required individuals and businesses to deliver gold coin, gold bullion and gold certificates to the Federal Reserve by 1 May 1933, in exchange for paper money at the official price of $20.67 per troy ounce.
There were exceptions, including:
- Gold needed for legitimate industrial, professional or artistic use, such as by dentists, jewellers and artisans.
- A small amount of gold coin per person, up to a set value.
- Gold coins with a recognised special value to collectors.
Violations were punishable by fines and imprisonment. In practice, prosecutions were rare, and many coins were never turned in. But the order effectively ended the circulation of gold coins in the United States, and large quantities of coins were melted into bars.
The Gold Reserve Act of 1934
The next step came on 30 January 1934, when Roosevelt signed the Gold Reserve Act. It transferred ownership of the gold held by the Federal Reserve to the US Treasury and gave the president authority to change the gold value of the dollar.
The following day, the official price of gold was raised from $20.67 to $35 per troy ounce. This was a devaluation of the dollar against gold. The Treasury captured the profit on the gold it now held, and part of it was used to set up the Exchange Stabilization Fund.
| Measure | Date | Main effect |
|---|---|---|
| Executive Order 6102 | 5 April 1933 | Private gold holdings to be delivered to the Federal Reserve |
| Gold Reserve Act | 30 January 1934 | Fed gold transferred to the Treasury |
| New official price | 31 January 1934 | Gold set at $35 per troy ounce |
Why the government did it
The aim was to stop deflation. Prices had collapsed since 1929, crushing farmers and debtors. By breaking the fixed link at $20.67 and devaluing the dollar, the administration hoped to raise prices and free monetary policy from the constraints of gold outflows. Economists still debate how much these measures helped, but many date the start of the recovery to the period when the United States and other countries broke with the old gold parities.
The Gold Clause cases
Many contracts at the time contained gold clauses, promising payment in gold or its equivalent. A joint resolution of Congress in June 1933 made these clauses unenforceable. In 1935 the Supreme Court, in what are known as the Gold Clause Cases, largely let the government’s position stand, so debts could be settled in ordinary dollars.
Ownership becomes legal again
For four decades, Americans could not legally hold gold bullion, apart from exceptions for collectors and industry. The ban was lifted with effect from 31 December 1974, following legislation signed earlier that year. American citizens could once again buy and hold gold bars and bullion coins. The US Mint began its own gold bullion coin program in 1986.
What it means today
The 1933 episode is often cited in discussions about storage and jurisdiction, and some investors say it shaped their thinking about holding gold. It is history, not a forecast: the legal and monetary context today is very different. For how central banks see gold now, see Central Banks and Gold, and for the era that preceded 1933, The Classical Gold Standard. Practical questions about holding metal today are covered in our guide on how to store bullion.
This article may contain partner links. They never influence what we write.