A silly article. Executive order 6102 had just forbidden private ownership of gold. If the gold clause were invoked the gold would immediately go to the Government. The Executive order was itself legal because of the 1917 Trading with the Enemy Act was still in force.

Nobody was defrauded, there was no default, because everybody had plenty of time between 1917 and 1933 to rewrite contracts or hedge appropriately.

Why is the author dredging up this ancient history? Does he think any country facing war will permit capital flight in the shape of gold? When, in history, have sovereign states NOT had a power of this sort? How can one say contracts have been interfered with in some malign fashion where the same law applies to all whether or not they have a contract? The only thing that was avoided was a costly machinery which would have confiscated gold at the time it was tendered. That's plain silly.



Why is the author saying 'the US behaved like a banana republic?' Is he under the impression that the US was a net debtor?

When a 'banana republic' borrowed money from London and Paris and New York and then refused to repay that money, the big powers sent gunboats who took control of the Customs House till they were repaid. A powerful country which reneged would be frozen out of international capital markets. Does the author think anything like this happened to the U.S under F.D.R?



Why is the author quoting some silly fellow who said 'Shame and humiliation are upon us now. Moral and financial chaos may be confidently expected'? The US suffered no shame or humiliation. Far from descending into moral and financial chaos, it became the undisputed leader of the free world able single handedly to lift Western Europe out of Post War devastation.



Americans are not stupid. The author is- for suggesting that there was any breach of the rule of law or the sacred nature of the contract. Firstly, the action was perfectly lawful. Secondly, no party to any contract was disadvantaged unfairly. On the contrary, they were relieved of a costly and onerous enforcement mechanism.



The Government is legally empowered to levy taxes on wealth and income and expenditure an imputed income and so forth. So long as no party is denied due process, it can always create assets equal to its liabilities on the basis of its right to levy taxes.



External debt is a separate matter. However, capital markets are scarcely managed by babes in the wood who share the absurd belief of this author that 'America- that too under F.D.R- acted like a banana republic and so forth.



I appreciate that Professors need to sell their books but they can't treat the paying customer as a complete moron! It is folly to cast 'false light' so as to dash of a 'clickbait' type article. Editors should also caution academics to damaging their own reputations, and that of the institutions they are associated with, by writing in a careless and condescending manner.