On June 5th, 1933, in the midst of the Great Depression, FDR made the decision to move the United States away from the gold standard. Congress enacted a resolution which nullified the right of creditors to demand payment in gold.
The gold standard is a system in which the value of a nation’s currency is determined by the value of gold. What this means is that, as long as gold holds value in the eyes of the people, money will hold similar value. This is the essential makings of the gold standard. The United States first truly implemented it in the late 1800s. A person essentially, could represent their money with paper money. When they chose to, they could go to a bank and exchange their paper money for gold.
This type of economic model was very popular in the 19th and early 20th centuries. People held gold to a certain high value, and therefore, it was only natural for people to place the value of currency in the value of gold. However, during the Great Depression, placing the value of money on gold posed numerous problems that prevented the government from being able to help during the economic downturn. Very quickly after taking office, around March, FDR issued a nation wide bank moratorium, in order to prevent a run on banks by consumer lack of confidence in the economy. He also forbade banks to pay out gold or export it. These actions followed the Keynesian economic theory which stated that the best way to fight economic downturn was too inflate the money supply. By preventing the movement of gold, FDR allowed more to sit in the federal reserve, and therefore give him more power in controlling inflation rates. This followed the United Kingdom as they had done these exact same actions, 2 years prior back in 1931.
By April 5, Roosevelt ordered that all gold coins and gold certificates in denominations of more than $100 were to be turned in for different money. It required everyone to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in 100s of millions in gold.
The government raised the price to $35 per ounce and held it there until August 15, 1971, when President Richard Nixon announced that the United States would no longer convert currency into gold at a fixed value, thus completely abandoning the gold standard for good.
Sources:
https://www.history.com/this-day-in-history
https://www.investopedia.com/ask/answers/09/gold-standard.asp
https://u-s-history.com/pages/h753.html
https://corporatefinanceinstitute.com/resources/knowledge/economics/fiat-money-currency/