How Franklin Roosevelt Secretly Ended the Gold Standard

March 21 (Bloomberg) -- On March 4, 1933, Franklin D.Roosevelt became president for the first time, promising an“adequate but sound” currency. The next day, a Sunday, he closedthe nation’s banks. “We are now off the gold standard,” heprivately declared to a group of advisers. Goldbugs in thepresident’s circle immediately began prophesying doom. One ofhis aides, Lewis Douglas, proclaimed “the end of Westerncivilization.”

How Roosevelt took this fateful step has been the subjectof debate among historians, many of whom believe that thepresident flailed his way through his first weeks in office, andonly gradually came to the decision to take the country off goldthat April. But the evidence suggests that Roosevelt intended todo so from Day One for very specific reasons, although hedelayed letting the rest of the country in on his plans.