Gold Reserve Act

Gold Reserve Act (1934)

1) Link to the Text of the Act
Read the statute (31 U.S.C. §§ 5116–5118)

2) Why It Was Done
Passed in the aftermath of the Great Depression and following the Emergency Banking Act of 1933, this Act transferred ownership of all monetary gold to the U.S. Treasury and gave the federal government control over gold reserves. It also authorized the President to devalue the dollar relative to gold.

3) Pre-existing Law or Constitutional Rights
Before this Act, citizens could legally own gold coin, bullion, and certificates. The Act made it illegal for private citizens to hold most forms of gold, curtailing property rights and contract enforcement tied to gold clauses.

4) Overreach or Proper Role?
Supporters claimed it was necessary to stabilize the dollar and end gold hoarding. Critics argued it was one of the most extreme federal seizures of private property, effectively confiscating gold and voiding private contracts.

5) Who or What It Controls

U.S. Citizens (forbidden from owning monetary gold, required to turn it over to the Treasury)
Banks (all gold holdings transferred to U.S. Treasury)
Federal Reserve (surrendered gold to Treasury, received gold certificates in return)

6) Key Sections / Citations

31 U.S.C. § 5116: Treasury control of gold
31 U.S.C. § 5117: Issuance of gold certificates to the Federal Reserve
31 U.S.C. § 5118: Nullified gold clauses in contracts

7) Recent Changes or Live Controversies

Private gold ownership was again legalized in 1974 (by President Gerald Ford).
The Act remains a touchstone in debates over federal monetary power and the constitutionality of currency control.
Still cited in critiques of the U.S. leaving the gold standard (culminating in Nixon’s 1971 suspension of convertibility).

8) Official Sources