Tens of millions of Americans lost massive amounts of their savings. And after booming, the stock market soon fell 50% in a single year.
and 100% income taxes at the highest level. Long even established 27,000 “Share Our Wealth” clubs around the country and had a radio show that was listened to by one in five Americans. So where did this all lead? It led to America’s most dramatic Debt Jubilee to date... HOWAMERICANS LOST 69% OF THEIR SAVINGS In 1933 – in order to deal with mounting debts and print money to pay for dozens of new social programs – President Franklin D. Roosevelt made two extraordinary changes to the financial system. First, he closed banks for four days and forced Americans to turn in each ounce of gold they owned for $20.67 in paper money. Then the government raised the price of gold, wiping out 69% of the savings of anyone who followed these rules. You’re probably familiar with that part of the story. But that was only the beginning... Roosevelt also eliminated the “gold clause” in all contracts, including loans, bonds, and other financial instruments. You see, at the time, people were worried the government might inflate away the value of their money. So they added a gold clause, which said repayments could be required to be made in gold.
These gold clauses were in federal loans, bank deposits, insurance contracts, and other private agreements. When Roosevelt outlawed the gold clause, he stole billions from investors. In fact, a Harvard paper estimates this rule took $700 million a year from private investors who bought government bonds. Billions more were stolen from folks who lost money from the elimination of the gold clause in private contracts, bank accounts, and insurance deals. Eliminating the gold clause was so controversial, investors sued the government. The case went to the Supreme Court. Roosevelt was terrified his Debt Jubilee would be overturned. He even drafted a speech saying he would ignore the court if it ruled against him. But his political pressure worked, and the court ruled 5-4 in Roosevelt’s favor. Of course, there were consequences... Tens of millions of Americans lost massive amounts of their savings. And
24
April 2019
Made with FlippingBook - Online Brochure Maker