1934 January 30
Gold Reserve Act of 1934: "An Act to protect the
currency system of the United States, to provide for the better
use of the monetary gold stock of the United States, and for
other purposes." As the economy continued to deteriorate,
the United States nationalized gold and prohibited private gold
ownership except under license. The President was empowered
to devalue the gold dollar by up to 40%, a power which was exercised
for the first time one day after this Act came into force [see
next document].
***
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, That the
short title of this Act shall be the "Gold Reserve Act of 1934"
SEC. 2. (a) Upon the approval of this Act all right, title, and
interest, and every claim of the Federal Reserve Board, of every
Federal Reserve hank, and of every Federal Reserve agent, in and
to any and all gold coin and gold bullion shall pass to and are
hereby vested in the United States; and in payment therefor credits
in equivalent amounts in dollars are hereby established in the Treasury
in the accounts authorized under the sixteenth paragraph of section
16 of the Federal Reserve Act, as heretofore and by this Act amended
(U.S.C., title 12, sec. 467). Balances in such accounts shall be
payable in gold certificates, which shall be in such form and in
such denominations as the Secretary of the Treasury may determine.
All gold so transferred, not in the possession of the United States,
shall be held in custody for the United States and delivered upon
the order of the Secretary of the Treasury; and the Federal Reserve
Board, the Federal Reserve banks, and the Federal Reserve agents
shall give such instructions and shall take such action as may be
necessary to assure that such gold shall be so held and delivered.
(b) Section 16 of the Federal Reserve Act, as amended, is further
amended in the following respects:
(1) The third sentence of the first paragraph is amended to read
as follows: "They shall be redeemed in lawful money on demand
at the Treasury Department of the United States, in the city of
Washington, District of Columbia, or at any Federal Reserve bank."
(2) So much of the third sentence of the second paragraph as precedes
the proviso is amended to read as follows: "The collateral
security thus offered shall be notes, drafts, bills of exchange,
or acceptances acquired under the provisions of section 13 of this
Act, or bills of exchange endorsed by a member bank of any Federal
Reserve district and purchased under the provisions of section 14
of this Act, or bankers acceptances purchased under the provisions
of said section 14, or gold certificates:".
(3) The first sentence of the third paragraph is amended to read
as follows: "Every Federal Reserve bank shall maintain reserves
in gold certificates or lawful money of not less than 35 per centum
against its deposits and reserves in gold certificates of not less
than 40 per centum against its Federal Reserve notes in actual circulation:
Provided, however, That when the Federal Reserve agent holds gold
certificates as collateral for Federal Reserve notes issued to the
bank such gold certificates shall be counted as part of the reserve
which such bank is required to maintain against its Federal Reserve
notes in actual circulation."
(4) The fifth and sixth sentences of the third paragraph are amended
to read as follows: "Notes presented for redemption at the
Treasury of the United States shall be paid out of the redemption
fund and returned to the Federal Reserve banks through which they
were originally issued, and thereupon such Federal Reserve bank
shall, upon demand of the Secretary of the Treasury, reimburse such
redemption fund in lawful money or, if such Federal Reserve notes
have been redeemed by the Treasurer in gold certificates, then such
funds shall be reimbursed to the extent deemed necessary by the
Secretary of the Treasury in gold certificates, and such Federal
Reserve bank shall, so long as any of its Federal Reserve notes
remain outstanding, maintain with, the Treasurer in gold certificates
an amount sufficient in the judgment of the Secretary to provide
for all redemptions to be made by the Treasurer. Federal Reserve
notes received by the Treasurer otherwise than for redemption may
be exchanged for gold certificates out of the redemption fund hereinafter
provided and returned to the Reserve bank through which they were
originally issued, or they may be returned to such bank for the
credit of the United States."
(5) The fourth, fifth, and sixth paragraphs are amended to read
as follows:
"The Federal Reserve Board shall require each Federal Reserve
bank to maintain on deposit in the Treasury of the United States
a sum in gold certificates sufficient in the judgment of the Secretary
of the Treasury for the redemption of the Federal Reserve notes
issued to such bank, but in no event less than 5 per centum of the
total amount of notes issued less the amount of gold certificates
held by the Federal Reserve agent as collateral security; but such
deposit of gold certificates shall be counted and included as part
of the 40 per centum reserve hereinbefore required. The Board shall
have the right, acting through the Federal Reserve agent, to grant
in whole or in part, or to reject entirely the application of any
Federal Reserve bank for Federal Reserve notes; but to the extent
that such application may be granted the Federal Reserve Board shall,
through its local Federal Reserve agent, supply Federal Reserve
notes to the banks so applying, and such bank shall be charged with
the amount of the notes issued to it and shall pay such rate of
interest as may be established by the Federal Reserve Board on only
that amount of such notes which equals the total amount of its outstanding
Federal Reserve notes less the amount of gold certificates held
by the Federal Reserve agent as collateral security. Federal Reserve
notes issued to any such bank shall, upon delivery, together with
such notes of such Federal Reserve bank as may be issued under section
18 of this Act upon security of United States 2 per centum Government
bonds, become a first and paramount lien on all the assets of such
bank.
"Any Federal Reserve bank may at any time reduce its liability
for outstanding Federal Reserve notes by depositing with the Federal
Reserve agent its Federal Reserve notes, gold certificates, or lawful
money of the United States. Federal Reserve notes so deposited shall
not be reissued, except upon compliance with the conditions of an
original issue.
"The Federal Reserve agent shall hold such gold certificates
or lawful money available exclusively for exchange for the outstanding
Federal Reserve notes when offered by the Reserve bank of which
he is a director. Upon the request of the Secretary of the Treasury
the Federal Reserve Board shall require the Federal Reserve agent
to transmit to the Treasurer of the United States so much of the
gold certificates held by him as collateral security for Federal
Reserve notes as may be required for the exclusive purpose of the
redemption of such Federal Reserve notes, but such gold certificates
when deposited with the Treasurer shall be counted and considered
as if collateral security on deposit with the Federal Reserve agent."
(6) The eighth paragraph is amended to read as follows:
"All Federal Reserve notes and all gold certificates and lawful
money issued to or deposited with any Federal Reserve agent under
the provisions of the Federal Reserve Act shall hereafter be held
for such agent, under such rules and regulations as the Federal
Reserve Board may prescribe, in the joint custody of himself and
the Federal Reserve bank to which he is accredited. Such agent and
such Federal Reserve bank shall be jointly liable for the safekeeping
of such Federal Reserve notes, gold certificates, and lawful money.
Nothing herein contained, however, shall be construed to prohibit
a Federal Reserve agent from depositing gold certificates with the
Federal Reserve Board, to be held by such Board subject to his order,
or with the Treasurer of the United States for the purposes authorized
by law." (7) The sixteenth paragraph is amended to read as
follows:
"The Secretary of the Treasury is hereby authorized and directed
to receive deposits of gold or of gold certificates with the Treasurer
or any Assistant Treasurer of the United States when tendered by
any Federal Reserve bank or Federal Reserve agent for credit to
its or his account with the Federal Reserve Board. The Secretary
shall prescribe by regulation the form of receipt to be issued by
the Treasurer or Assistant Treasurer to the Federal Reserve bank
or Federal Reserve agent making the deposit, and a duplicate of
such receipt shall be delivered to the Federal Reserve Board by
the Treasurer at Washington upon proper advices from any Assistant
Treasurer that such deposit has been made. Deposits so made shall
be held subject to the orders of the Federal Reserve Board and shall
be payable in gold certificates on the order of the Federal Reserve
Board to any Federal Reserve bank or Federal Reserve agent at the
Treasury or at the Subtreasury of the United States nearest the
place of business of such Federal Reserve bank or such Federal Reserve
agent. The order used by the Federal Reserve Board in making such
payments shall be signed by the governor or vice governor, or such
other officers or members as the Board may by regulation prescribe.
The form of such order shall be approved by the Secretary of the
Treasury,"
(8) The eighteenth paragraph is amended to read as follows:
"Deposits made under this section standing to the credit of
any Federal Reserve bank with the Federal Reserve Board shall, at
the option of said bank, be counted as part of the lawful reserve
which it is required to maintain against outstanding Federal Reserve
notes, or as a part of the reserve it is required to maintain against
deposits."
SEC. 3. The Secretary of the Treasury shall, by regulations issued
hereunder, with the approval of the President, prescribe the conditions
under which gold may be acquired and held, transported, melted or
treated, imported, exported, or earmarked: (a) for industrial, professional,
and artistic use; (b) by the Federal Reserve banks for the purpose
of settling international balances; and, (c) for such, other purposes
as in his judgment are not inconsistent with the purposes of this
Act. Gold in any form may be acquired, transported, melted or treated,
imported, exported, or earmarked or held in custody for foreign
or domestic account (except on behalf of the United States) only
to the extent permitted by, and subject to the conditions prescribed
in, or pursuant to, such regulations. Such regulations may exempt
from the provisions of this section, in whole or in part, gold situated
in the Philippine Islands or other places beyond the limits of the
continental United States.
SEC. 4. Any gold withheld, acquired, transported, melted or treated,
imported, exported, or earmarked or held in custody, in violation
of this Act or of any regulations issued hereunder, or licenses
issued pursuant thereto, shall be forfeited to the United States,
and may be seized and condemned by like proceedings as those provided
by law for the forfeiture, seizure, and condemnation of property
imported into the United States contrary to law; and in addition
any person failing to comply with the provisions of this Act or
of any such regulations or licenses, shall be subject to a penalty
equal to twice the value of the gold in respect of which such failure
occurred.
SEC. 5. No gold shall hereafter be coined, and no gold coin shall
hereafter be paid out or delivered by the United States: Provided
however, That coinage may continue to be executed by the mints of
the United States for foreign countries in accordance with the Act
of January 29, 1874 (U.S.C., title 31, sec. 367). All gold coin
of the United States shall be withdrawn from circulation, and, together
with all other gold owned by the United States, shall be formed
into bars of such weights and degrees of fineness as the Secretary
of the Treasury may direct.
SEC. 6. Except to the extent permitted in regulations which may
be issued hereunder by the Secretary of the Treasury with the approval
of the President, no currency of the United States shall be redeemed
in gold: Provided, however, That gold certificates owned by the
Federal Reserve banks shall be redeemed at such times and in such
amounts as, in the judgment of the Secretary of the Treasury, are
necessary to maintain the equal purchasing power of every kind of
currency of the United States: And provided further, That the reserve
for United States notes and for Treasury notes of 1890, and the
security for gold certificates (including the gold certificates
held in the Treasury for credits payable therein) shall be maintained
in gold bullion equal to the dollar amounts required by law, and
the reserve for Federal Reserve notes shall be maintained in gold
certificates, or in credits payable in gold certificates maintained
with the Treasurer of the United States under section 16 of the
Federal Reserve Act, as heretofore and by this Act amended.
No redemptions in gold shall be made except in gold bullion bearing
the stamp of a United States mint or assay office in an amount equivalent
at the time of redemption to the currency surrendered for such purpose.
SEC. 7. In the event that the weight of the gold dollar shall at
any time be reduced, the resulting increase in value of the gold
held by the United States (including the gold held as security for
gold certificates and as a reserve for any United States notes and
for Treasury notes of 1890) shall be covered into the Treasury as
a miscellaneous receipt; and, in the event that the weight of the
gold dollar shall at any time be increased, the resulting decrease
in value of the gold held as a reserve for any United States notes
and for Treasury notes of 1890, and as security for gold certificates
shall be compensated by transfers of gold bullion from the general
fund, and there is hereby appropriated an amount sufficient to provide
for such transfers and to cover the decrease in value of the gold
in the general fund.
SEC. 8. Section 3700 of the Revised Statutes (U.S.C., title 31,
sec. 734) is amended to read as follows:
"SEC. 3700. With the approval of the President, the Secretary
of the Treasury may purchase gold in any amounts, at home or abroad,
with any direct obligations, coin, or currency of the United States,
authorized by law, or with any funds in the Treasury not otherwise
appropriated, at such rates and upon such terms and conditions as
he may deem most advantageous to the public interest; any provision
of law relating to the maintenance of parity, or limiting the purposes
for which any of such obligations, coin, or currency, may be issued,
or requiring any such obligations to be offered as a popular loan
or on a competitive basis, or to be offered or issued at not less
than par, to the contrary notwithstanding. All gold so purchased
shall be included as an asset of the general fund of the Treasury."
SEC. 9. Section 3699 of the Revised Statutes (U.S.C., title 31,
sec. 733) is amended to read as follows:
"SEC. 3699. The Secretary of the Treasury may anticipate the
payment of interest on the public debt, by a period not exceeding
one year, from time to time, either with or without a rebate of
interest upon the coupons, as to him may seem expedient; and he
may sell gold in any amounts, at home or abroad, in such manner
and at such rates and upon such terms and conditions as he may deem
most advantageous to the public interest, and the proceeds of any
gold so sold shall be covered into the general fund of the Treasury:
Provided, however, That the Secretary of the Treasury may sell the
gold which is required to be maintained as a reserve or as security
for currency issued by the United States, only to the extent necessary
to maintain such currency at a parity with the gold dollar."
SEC. 10. (a) For the purpose of stabilizing the exchange value of
the dollar, the Secretary of the Treasury, with the approval of
the President, directly or through such agencies as he may designate,
is authorized, for the account of the fund established in this section,
to deal in gold and foreign exchange and such other instruments
of credit and securities as he may deem necessary to carry out the
purpose of this section. An annual audit of such fund shall be made
and a report thereof submitted to the President.
(b) To enable the Secretary of the Treasury to carry out the provisions
of this section there is hereby appropriated, out of the receipts
which are directed to be covered into the Treasury under section
7 hereof, the sum of $2,000,000,000, which sum when available shall
be deposited with the Treasurer of the United States in a stabilization
fund (hereinafter called the "fund") under the exclusive
control of the Secretary of the Treasury, with the approval of the
President, whose decisions shall be final and not be subject to
review by any other officer of the United States. The fund shall
be available for expenditure, under the direction of the Secretary
of the Treasury and in his discretion, for any purpose in connection
with carrying out the provisions of this section, including the
investment and reinvestment in direct obligations or the United
States of any portions of the fund which the Secretary of the Treasury,
with the approval of the President, may from time to time determine
are not currently required for stabilizing the exchange value of
the dollar. The proceeds of all sales and investments and all earnings
and interest accruing under the operations of this section shall
be paid into the fund and shall be available for the purposes of
the fund.
(c) All the powers conferred by this section shall expire two years
after the date of enactment of this Act, unless the President shall
sooner declare the existing emergency ended and the operation of
the stabilization fund terminated; but the President may extend
such period for not more than one additional year after such date
by proclamation recognizing the continuance of such emergency.
SEC. 11. The Secretary of the Treasury is hereby authorized to issue,
with the approval of the President, such rules and regulations as
the Secretary may deem necessary or proper to carry out the purposes
of this Act.
SEC. 12. Paragraph (b) (2), of section 43, title III, of the Act
approved May 12, 1933 (Public, Numbered 10, Seventy-third Congress),
is amended by adding two new sentences at the end thereof, reading
as follows:
"Nor shall the weight of the gold dollar be fixed in any event
at more than 60 per centum of its present weight. The powers of
the President specified in this paragraph shall be deemed to be
separate, distinct, and continuing powers, and may be exercised
by him, from time to time, severally or together, whenever and as
the expressed objects of this section in his judgment may require;
except that such powers shall expire two years after the date of
enactment of the Gold Reserve Act of 1934 unless the President shall
sooner declare the existing emergency ended, but the President may
extend such period for not more than one additional year after such
date by proclamation recognizing the continuance of such emergency."
[
]
(c) The Secretary of the Treasury is authorized to issue gold certificates
in such form and in such denominations as he may determine, against
any gold held by the Treasurer of the United States, except the
gold fund held as a reserve for any United States notes and Treasury
notes of 1890. The amount of gold certificates issued and outstanding
shall at no time exceed the value, at the legal standard, of the
gold so held against gold certificates.
SEC. 15. As used in this Act the term "United States"
means the Government of the United States; the term "the continental
United States "means the States of the United States, the District
of Columbia, and the Territory of Alaska; the term "currency
of the United States "means currency which is legal tender
in the United States, and includes United States notes, Treasury
notes of 1890, gold certificates, silver certificates, Federal Reserve
notes, and circulating notes of Federal Reserve banks and national
banking associations; and the term "person" means any
individual, partnership, association, or corporation, including
the Federal Reserve Board, Federal Reserve banks, and Federal Reserve
agents. Wherever reference is made in this Act to equivalents as
between dollars or currency of the United States and gold, one dollar
or one dollar face amount of any currency of the United States equals
such a number of grains of gold, nine tenths fine, as, at the time
referred to, are contained in the standard unit of value, that is,
so long as the President shall not have altered by proclamation
the weight of the gold dollar under the authority of section 43,
title III, of the Act approved May 12, 1933, as heretofore and by
this Act amended, twenty-five and eight tenths grains of gold, nine
tenths fine, and thereafter such a number of grains of gold, nine
tenths fine, as the President shall have fixed under such authority.
* * *
Source: Statutes at Large of the United States of America from
March 1933 to June 1934, Vol. 48, Part 1, (Washington: Government
Printing Office, 1934), pp. 337-344.
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