Gold Reserve Quotes
At the time the United States was on the Gold Standard and all our money was backed by gold. Root and others were afraid that a Federal Reserve Bank, a proposal that was being debated in Congress, would cause a large amount of paper money to be printed which other nations would obtain through trade and then exchange that for American gold—a process which would deplete the American gold supply. A few years before, William Jennings Bryan had argued that the Gold Standard did not allow America sufficient ability to increase the money supply to serve the growing population and economy. See {640992}.
There has always been a fear of inflation and currency debasement by governments. Since ancient times, rulers issued coins and when they were made of cheap metals like copper or iron, the ruler could mint as much as he wanted and when he did so the value went down. By using only precious metals, gold and silver, for coins, there would be a natural restraint on government. Garfield was one of those who believed that we should always have money of gold and silver. The United States would use that principle for the next century even backing its paper money with gold and silver. In the Nixon administration the United States abandoned the gold standard. Today, it is the ability of a country to produce things that maintains value of paper money which has been supplanted in many cases by electronic money.
What Franklin Delano Roosevelt began, President Nixon would in 1971 complete by removing America from the gold standard entirely and ending fixed rates of exchange. There have been those in government who did not understand the modern economics of money and who believed that currency had to have a fixed rate of exchange for gold or silver otherwise it was worthless. Roosevelt had to deal with them as did Nixon later. Even into the 21st century when it had been amply demonstrated that the best currency in the world was the United States dollar precisely because it was backed up by the full faith and credit of the United States Government, there were those who complain that United States money is not sound currency and argue for the return of the gold standard.
