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Apr 13 2022

Gold Coin Circulation in 1917

Although not withdrawn until 1933, the Treasury Department discouraged use of gold coin as early as 1917. A December 2, 1917 press release recently added to Newman Portal outlined the talking points. Secretary W. G. McAdoo noted that circulation of gold coin caused “rapid” abrasion and loss of value, and that most people preferred to use paper money (in this case gold certificates) anyway. McAdoo felt that gold should be reserved for backing the certificates, or foreign exchange settlements, and only then when necessary. The Secretary castigated the use of machines for counting gold coins and considered it “selfish and unpatriotic” to demand gold coins in commerce. One can only observe that the eventual removal of gold coin from circulation, in 1933, was politically facilitated by first changing it into paper.

Thanks to Roger Burdette for pointing out the collection of Treasury Department press releases available at FRASER, the online Federal Reserve Library.

Link to Statement by Secretary McAdoo on Use of Gold Coin as Circulating Medium: https://nnp.wustl.edu/library/publisherdetail/543206

Link to Treasury Department press releases on FRASER: https://fraser.stlouisfed.org/title/6111

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