Message:

<p>[QUOTE=&quot;jackeen, post: 149799, member: 5683&quot;]At the time FRBNs were printed, mid-1933, there were legal restrictions on the amount of FRNs that could be issued, relative to the amount of gold on hand in the Treasury and the Federal Reserve System. People had drained the gold from the banking system to the extent no more FRNs could be issued, and in fact there were already too many outstanding to be in compliance with the law.</p><p><br /></p><p>By threatening to release the names of those who had withdrawn large quantities of gold from banks in the early months of the year, and by issuance of an executive order forbidding private ownership of gold coins, save with certain restrictions, the Roosevelt administration got about $100 million in gold returned to the system by mid-April. By issuing FRBNs rather than FRNs against that amount (FRBNs could be issued at a ratio of five-to-one, while FRNs could not), they were able to issue $500 million worth, enough to restore the banking system, which had collapsed in February and March, and to avoid monetizing the various local emergency scripts then in circulation, and without resorting to other, more radical solutions.</p><p><br /></p><p>Interestingly, the majority of FRBNs were not placed in circulation in 1933, but instead sat around in Federal Reserve branch banks providing liquidity and meeting reserve requirements. The rest were finally issued in 1944, when World War II was producing spot shortages of currency in various parts of the country. When so issued, their oddity was noted, and many got saved, accounting for the relative abundance of examples of this one-off emergency issue.[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in