Invalidation of the Gold Clause

May 29, 1933

Report Outline
The Gold Clause Resolution and the Gold Standard
Significance of the Gold Clause in Contracts
The Supreme Court and the Gold Clause
Impairment of Obligations and Due Process of Law
Special Focus

The Gold Clause Resolution and the Gold Standard

Purposes of the Administration's Resolution

The swift-moving chain of events which began on the night of March 5, 1933, with President Roosevelt's gold embargo-bank holiday proclamation will culminate this week in the adoption by both houses of Congress of a resolution “to assure uniform value to the coins and currencies of the United States” by declaring gold clauses in all existing obligations, public and private, contrary to public policy and invalid. Under the resolution all obligations expressed as payable in gold may be discharged dollar for dollar in “legal tender” and no future obligations, public or private, may be expressed in any specific coin or currency. The resolution, in addition to prohibiting the use of the gold clause in future obligations, will affect some $75,000,000,000 of public and private obligations now outstanding in the United States.

A memorandum made public by Senator Fletcher (D., Fla.), chairman of the Senate Banking and Currency Committee, when he introduced the administration's gold-clause resolution, May 26, said its immediate enactment was of the utmost importance because:

  1. It completely regularizes the present de facto situation as to both public and private debts.

ISSUE TRACKER for Related Reports
U.S. Dollar and Inflation
Jul. 19, 2019  The Future of Cash
Oct. 2008  The Troubled Dollar
Feb. 13, 1998  Deflation Fears
Mar. 13, 1987  Dollar Diplomacy
Oct. 14, 1983  Strong Dollar's Return
Jul. 11, 1980  Coping with Inflation
May 16, 1980  Measuring Inflation
Dec. 07, 1979  Federal Reserve's Inflation Fight
Jun. 09, 1978  Dollar Problems Abroad
Sep. 20, 1974  Inflation and Job Security
Feb. 26, 1969  Money Supply in Inflation
Feb. 14, 1968  Gold Policies and Production
Dec. 15, 1965  Anti-Inflation Policies in America and Britain
Mar. 15, 1965  World Monetary Reform
Dec. 02, 1964  Silver and the Coin Shortage
Oct. 17, 1962  Gold Stock and the Balance of Payments
Dec. 15, 1960  Gold and the Dollar
Oct. 10, 1956  Old-Age Annuities in Time of Inflation
Jan. 17, 1951  Credit Control in Inflation
Aug. 10, 1949  Dollar Shortage
Oct. 04, 1943  Stabilization of Exchanges
Jan. 21, 1941  Safeguards Against Monetary Inflation
Mar. 25, 1940  United States Gold in International Relations
Dec. 14, 1937  Four Years of the Silver Program
Oct. 04, 1934  Inflation in Europe and the United States
Jan. 30, 1934  Dollar Depreciation and Devaluation
Sep. 05, 1933  Stabilization of the Dollar
May 29, 1933  Invalidation of the Gold Clause
Mar. 15, 1933  Inflation of the Currency
Oct. 25, 1924  Bank Rate and Credit Control Federal Reserve Policies and the Defaltion Issue
Economic Crises