Market Overview

This Day In Market History: FDR Takes US Off The Gold Standard

This Day In Market History: FDR Takes US Off The Gold Standard

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day in 1933, President Franklin D. Roosevelt took the U.S. dollar off of the gold standard.

Where The Market Was

The Dow finished the day at 62.65. The S&P 500 traded at around 7.8. Today, the Dow is trading at 26,449 and the S&P 500 is trading at 2,900.

What Else Was Going On In The World?

In 1933, the Great Depression unemployment rate peaked at 25.2 percent. Adolf Hitler rose to power and became chancellor of Germany. A can of Campbell’s vegetable soup cost 10 cents.

The End Of The Gold Standard

Until 1933, the value of the U.S. dollar had been directly linked to gold. In the past, countries have used a gold standard system to provide tangible value for their currencies by setting a fixed price for conversion between currency and gold.

When the Great Depression hit, both the U.S. and Britain were still using the gold standard system. The U.K. dropped the gold standard in 1931, and the U.S. followed suit in 1933 as deflationary pressures continued to mount.

On April 18, 1933, FDR announced that he planned to issue an executive order placing embargoes on exports of U.S. gold and freeing the U.S. dollar to float in value against foreign currencies. This announcement effectively took the U.S. off of the gold standard. FRD hoped that the executive order would reduce the amount of gold that was being hoarded by U.S. citizens and help improve bank liquidity.

At the time, the move away from the gold standard was only seen as a temporary one, but the U.S. never went back.

Related Links:

This Day In Market History: Enron CEO Curses Skeptical Analyst On Earnings Call

13 Stocks And ETFs To Watch Amid China's 25% Tariff Threat

Posted-In: this day in market historyEducation Markets General Best of Benzinga


Related Articles (GLD + SPY)

View Comments and Join the Discussion!
Lightning Fast
Market News Service
$199 Free 14 Day Trial
Book A Demo
Learn How You Can Succeed In The Market With Benzinga Pro

Fastest Market News

Real-Time News Alerts

Customizable News Filters

Book A Demo

The Daily Biotech Pulse: Hookipa To Debut, Mustang Bio Skyrockets, AngioDynamics Sheds Portfolio

Jim Cramer Shares His Thoughts On AMD, Gilead, Nvidia And More