March 1978

William Woodin was the man who wrote the Banking Act of 1933, which took the United States off the gold standard.

Woodin was Roosevelt’s Secretary of the Treasury and on March 4, 1933, was put in charge of writing emergency banking legislation. Robert Goldston writes:

Under the tireless supervision of Secretary Woodin, a strange combination of individuals worked around the clock at the Treasury. They included Hoover’s former Secretary of the Treasury, Ogden Milles, and his staff; New Dealers such as Raymond Moley (now an Assistant Secretary of State); economists from universities, and scores of worried desperate bankers.

The Great Depression, p. 112, emphasis added

This was the bill which was passed by the House in forty minutes of debate with no copies available for the members to read and no committee hearings.

Woodin was from an extremely wealthy family and is best known as President of American Machine and Foundry. His obituary listed presidencies and directorships of more giant corporations than most people work for in a lifetime including a position as director of the Federal Reserve Bank of New York. Woodin was a Republican all his life (although he supported Smith in 1928 and FDR in 1932).

In the Senate, where copies of the bill were finally available, objections were raised by certain Progressives who found the bill too conservative. But, Goldston admits, It was a bill which met with the approval of bankers and even of the most conservative members of Hoover’s old administration. (In addition to setting up our present paper money system, the Banking Act of 1933 wiped out a large number of the nation’s smaller banks, thus reducing the competition for the big bankers who assisted Woodin.)

Using the provisions of this bill the Federal Reserve began to issue lawful money, stimulating the economy (i.e., the banks and the big corporations), bulling the stock market and depreciating the currency — a process which has continued for the past forty-five years.

Nevertheless, the myth was propagated that the abandonment of the gold standard was a leftist measure, harmful to the bankers, the conservatives and the big business interests, and beneficial to the poor.

This material is made available with the generous permission of Howard Katz (1931-2012).