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The True Story of the Time the Government Printed a $100,000 Bill

Jan. 11, 2013 3:20pm Guest Post

[Editor's note: The following is a cross post by Rob Wile that originally appeared on Business Insider]:

A $1 trillion-dollar coin seems like a high denomination to ask the government to print. Some say its weight could sink the Titanic! (This is benightedly ludicrous).

But one time, the U.S. government actually got 1/10,000,000th of the way there — by printing a $100,000 bill.

And it really helped the economy.

The year was 1933. We were in the midst of a worldwide depression characterized by massive deflation.

St. Louis Fed

President Roosevelt ordered Americans to surrender any gold they held to the government.

Wikimedia

The reason: no one was buying anything with cash.

Library of Congress

Gold hoarding and bartering were also reducing the amount of funds flowing into the government.

Library of Congress

Americans agreed to surrender their gold, but it wasn’t enough…

St. Louis Fed

…Because Roosevelt also agreed to bail out the banks. That was good news for consumers but bad news for currency control.

Wikimedia

So Roosevelt proposed the Treasury take over the Federal Reserve’s gold supplies.

By Infrogmation on flickr

The pluses: Once the federal government controlled all the gold, it could better enforce its plans to devalue the dollar (thus reflating the economy).

Library of Congress

The costs: end of Fed independence.

Library of Congress

Fed Chairman Gene Black was sympathetic but wary. He advised the decision was best left up to Congress.

(Gene Black, left, with David Ben Gurion, Wikimedia)

Congress took up the measure in January 1933. The Democrat-controlled Senate — a first since World War I — helped get the measure passed Jan. 31.

Library of Congress

The Gold Reserve Act of 1934 set a new federal exchange rate for gold at $35, but only for the purposes of foreign exchange.

New York Times

It also allowed the Treasury to print bills to pay for the Federal Reserve’s gold.

Library of Congress

And one of them was worth $100,000. (It had Woodrow Wilson on the face).

Wikimedia

Spoiler alert: It worked.

EconomistView

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Comments (74)

DZ-015
Posted on January 11, 2013 at 5:50pm
The one ounce platinum bullion coin we have minted since 1997 has a face value of $100, event though it is worth about $1600 on the current market. A trillion dollar platinum coin at the same rate would weigh about 3,800,000 Avoirdupois Tons. Even evaluating the “coin” at its present market value, this would come to 237,500 tons, nearly five times the empty weight of the Titanic. Benightedly ludicrous indeed.

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- turkey13
  Posted on January 11, 2013 at 6:11pm
  We won’t ever need these $100,000 bills. If China the USA the biggest land owner in the country can just give land for our debt. I bet China would write off $ 1.5 trillion for the 87% of Utah we own. Look how much they could reduce transportation cost by bringing their workers over here in their own little island in the middle of the US. I bet Japan would write off $ 3/4 of a trillion if we give them the Grand Canyon. We have rich folks here that would pay big bucks for state parks.Many we can’t even keep up and do the maintenance needed.
  
  Report this comment
- michaelmoron
  Posted on January 11, 2013 at 6:37pm
  This is what I posted in October:
  
  ProbIemSoIver (aka MichalMoron)
  Posted on October 12, 2012 at 7:18am
  U.S. a Corporation
  http://www.youtube.com/watch?v=xhxrazdGyyo
  (make a copy if you can, Youtube has already removed the original)
  
  In 1913 the federal reserve act is passed. Income tax begins. IRS and FBI are established.
  we are drawn into WW1 four year later under a Lie.
  http://www.youtube.com/watch?v=xZkR1nMw1E0&feature=related
  
  In 1933 The United States Corporation is declared Bankrupt and surrenders collateral including AMERICANS !!!!
  http://www.youtube.com/watch?v=IlCs7u1ihws
  
  In 1944, the lien is transfered to the IMF and World Bank which create the UN the next year
  http://teamlaw.net/history.htm
  http://www.barefootsworld.net/usfraud.html
  
  In 1963 JFK has a real plan to save America and Americans from the Global Elite Banksters and Passes Executive Order 11110
  http://www.youtube.com/watch?v=qYVCIdrcS6k
  
  In 1992 AMERICA WAS SOLD TO INVESTORS !!!!!!
  http://rense.com/general86/nomis.htm
  
  Report this comment
- michaelmoron
  Posted on January 11, 2013 at 6:47pm
  I Told you they would remove it the first video.
  Here is another. Record this as evidence, before they remove this one too.
  http://www.youtube.com/watch?v=EYLe02uld_0
  
  Report this comment
- Dan_o
  Posted on January 11, 2013 at 8:04pm
  Fitting that they put Woodrow “Progressive” Wilson on the bill.
  
  Report this comment
- A_CALL_TO_CONSCIENCE
  Posted on January 11, 2013 at 8:58pm
  Until the FED is ended the dollar will become even more worthless. Pretty soon it will fall. End the FED and get back to sound money. It’s our only hope.
  
  Report this comment
- G-WHIZ
  Posted on January 12, 2013 at 9:44am
  Great! Now I can (1935) purchase a loaf of stale-bread with 2-(100,000-dollar) bills!!
  
  Report this comment
- Rob in Katy
  Posted on January 12, 2013 at 5:49pm
  I have been saying for years that we are headed toward being a nation of lawn care specialists. I was referring to the way we keep giving away our tech to other countries and forgetting our skills that made the country great – I guess that I was not far off.
  
  Report this comment
- michaelmoron
  Posted on January 12, 2013 at 8:56pm
  This article Is B#ll****. Same revisionist crap the kids learn in college.
  
  The Federal Reserve PRIVATE BANK took over the Treasury in 1920.
  
  The TREASURY has never had power over the FED.
  
  JFK was going to stop this:
  http://www.youtube.com/watch?v=qYVCIdrcS6k
  
  Report this comment
- Mil Mom
  Posted on January 12, 2013 at 10:12pm
  @turkey13
  Posted on January 11, 2013 at 6:11pm
  
  We won’t ever need these $100,000 bills. If China the USA the biggest land owner in the country can just give land for our debt. I bet China would write off $ 1.5 trillion for the 87% of Utah we own. Look how much they could reduce transportation cost by bringing their workers over here in their own little island in the middle of the US. I bet Japan would write off $ 3/4 of a trillion if we give them the Grand Canyon. We have rich folks here that would pay big bucks for state parks.Many we can’t even keep up and do the maintenance needed
  ***
  Sssshhhh! Be Vewwwy, vewwy qwiet, uncle bawwie’s listening. The federal gobment now owns the mortagage on a large percentage of the homes in America, (thanks to fannie mae, mortgage program.) Do you think for a minute the cabal wouldn’t like to see millions of American’s displaced for chinese and japanese homeowners, (The Chinese are used to communism, and it wouldn’t be fair to not let them vote.) You may have stumbled on the plan all along, since American’s lower and middle class don’t own homes they can be slave labor to China, there will be many more of them than us.
  
  Report this comment
- lemkete
  Posted on January 13, 2013 at 10:59am
  Actually, since face value has nothing to do with intrinsic value all they would have to is stamp a $1trillion face on platinum coin. But for argument’s sake we’ll use your example of having to mint a coin based on the current 1 ounce = $100 face value. Not sure how you calculated your figures, but they are off by a large margin. Your calculation of 3,800,000 avoirdupois tons would equate to, after conversion to troy ounces, 110,833,333,597 one ounce coins with a face value over $11 trillion. A “slight” miscalculation on your part. So, I took the liberty of doing a correct calculation. The actual avoirdupois tonnage of a trillion dollar coin, based on a $100 face value = 1 troy ounce, is 342,857.14 tons. If we based it on the $1600/troy ounce intrinsic value it would come to 21,428.62 tons.
  
  Report this comment
scjeff
Posted on January 11, 2013 at 5:35pm
How much value must be deliberately destroyed before it is considered and act of war?

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- Wolfgang the Gray
  Posted on January 11, 2013 at 7:11pm
  The Dollar has lost so much value that $35 in 1934 bought 1-oz of gold. Today, it costs $1,673.08 to buy that same 1-oz of gold.
  
  Compare today with the day Bush turned over the White House to Obama (Jan 5, 2009), 1-oz of gold cost $853.50. Now you can see how Obama has “Improved” the value of our Dollar.
  
  Oh, for you whiny leftist that blame everything on Bush, when GWB took office on 1/05/2001, the price of gold was $267.40 for 1-oz & on 1/05/2005, 1-oz cost $426.00. So in 8-years under Bush, the value dropped from $267.40 to 853.50 ($581.60 change). In half the time (4-years) under Obama, the vlue of the Dollar dropped from $853.50 to $1673.08 ($819.58). So Obama has done almost twice the damage in half the time.
  
  One thing different from 1934, if Obama tried to take all the gold that Americans have now, I don’t they would be as inclined to do so.
  
  Report this comment
- Advection
  Posted on January 11, 2013 at 7:56pm
  Actually, I don’t think Americans have up their gold in 1933. Only a tiny fraction did, so any changes were due to “perception”.
  
  My grandfather hated FDR. It took me decades to understand why.
  
  Report this comment
- lemkete
  Posted on January 14, 2013 at 1:04am
  @ Wolfgang By your calculations Obama has reduced the value by 49% whereas Bush reduced the value by 68%! That kinda goes against your argument.
  
  Report this comment
Chuck Stein
Posted on January 11, 2013 at 5:35pm
Woodrow Wilson on the $100,000 bill. Shocked, I am not.

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DZ-015
Posted on January 11, 2013 at 5:30pm
“Benightedly ludicrous” that a trillion dollar platinum coin could sink the titanic? The face value of a one Troy ounce platinum coin is now set at $100. There are 12 troy ounces in a troy pound, and approximately 13.16 Troy ounces in an Avoirdupois pound. Dividing a trillion ounces by 13.16 leaves 759878

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- DZ-015
  Posted on January 11, 2013 at 5:54pm
  My post was snatched away in mid composition. Even assuming a trillion dollar platinum coin is to be valued at the current market rate of approximately $1600 per ounce, it would weigh over five times the empty weight of the Titanic.
  
  Report this comment
- lemkete
  Posted on January 14, 2013 at 1:24am
  Wow DZ-015! I’m beginning to think the only thing benightedly ludicrous are your calculations. First of all there are not 13.16 troy ounces in an avoirdupois pound. There are 14.58 troy ounces in an avoirdupois pound. There are 13.16 avoirdupois ounces in a troy pound. The rest of my corrections are posted above in response to your original post.
  
  Report this comment
truthnstuff
Posted on January 11, 2013 at 5:26pm
Blaze. you seem to be having trouble generating the “next page” urls for stories, resulting in 404 page not found.

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Owt_Raged
Posted on January 11, 2013 at 5:08pm
Sorry, I’m keeping my guns, gold, food and water. The government got themselves into this mess. Perhaps the President and Congress can go wash some dishes for China to help pay off some of our debt?

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- scjeff
  Posted on January 11, 2013 at 5:32pm
  Big pictures and very few words in this article. It was definitely put together by an Obama friend. The “it worked” conclusion is hard to reach.
  
  Report this comment
Obama_In_PeePee_Is_Becks_Art
Posted on January 11, 2013 at 5:01pm
“Spoiler alert: It worked.”

… and the U.S. remained in a depression years longer than every other country, until Americans kicked the communist(bastard) President out of Office (votes were counted back then) and the new President voted in backed off on the dictatorship and America began to flourish again. This time, in “chains”.

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- glassaudioguy
  Posted on January 11, 2013 at 5:31pm
  ‘Scuse me, but FDR died in office. I don’t like the progressives any more than you do but at least get your facts straight.
  
  Report this comment
- Capt_Gregg
  Posted on January 11, 2013 at 5:46pm
  “… and the U.S. remained in a depression years longer than every other country, until Americans kicked the communist(bastard) President out of Office (votes were counted back then) and the new President voted in backed off on the dictatorship and America began to flourish again.”
  
  Since I assume that by “the communist(bastard) President” you mean Roosevelt (the only POTUS from 1933 -1945), I should point out that he was not kicked out of office. He died, and was replaced by his Vice-POTUS, Harry Truman, who was subsequently elected POTUS in 1948 and refused to run again in 1952.
  
  Report this comment
- michaelmoron
  Posted on January 11, 2013 at 7:39pm
  Maybe the communist POS died in office cause he spilled the beans.
  
  His Masters – The Banksters, don’t like beans spilled !
  
  “The real truth of the matter is that a financial element in the large centers has owned the government since the days of Andrew Jackson.”
  – President FD Roosevelt (1933-1945)
  
  Report this comment
americansfightingforcommonsense
Posted on January 11, 2013 at 4:39pm
This is exactly what scares me about where this economy is headed. Buy your food and water storage now, ’cause it’s going to be a bumpy road.

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BlackCrow
Posted on January 11, 2013 at 4:19pm
Well this time “turn in your gold” will be met with the same reaction as “turn in your guns”.

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Snowleopard {gallery of cat folks}
Posted on January 11, 2013 at 4:17pm
Interesting that we have portions of history preparing to repeat themselves again; though in this matter there is one question – do we even have any gold reserves within the Federal reserve or anywhere that are controlled by the Federal government? Has anyone non-fed connected actually counted and audited the gold, if it is there?

Even with this insane idea of a $1 Trillion platinum coin, there is still something massively fishy at work when Obama and others of the extreme left continue down the path. Something is telling me that we are seeing the opening gambit of an whole new game from Obama.

This is going to get messy real quick.

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- Vickie Dhaene
  Posted on January 11, 2013 at 4:41pm
  Seems to me as being a great reason to AUDIT THE FED before Geitner can leave.
  
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crestar5020
Posted on January 11, 2013 at 4:01pm
You are right on @leftfighter. Another bright side, just forget about any unsecured debt. Of course your credit rating will hit the skids, but so what, the whole country will be hitting the skids. Inflation will be so high, food and housing will be all anyone can pay for and even that is ‘iffy’. Time to pick up stakes and move to Wyoming, N. Dakota, Utah or the conservative parts of Texas (That excludes Austin and Houston).

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VRW Conspirator
Posted on January 11, 2013 at 3:59pm
What isn’t mentioned was that this was just a measure to “reflate the economy” which means that it just made everything cost more but didn’t do squat for the economy. By taking everyone’s gold, the government effectively made it illegal to own gold unless there was a “collectible” value to it – like jewelry or archeological or antiques. The government then had to pay you a price for that gold, flooding the market with greenbacks and thus stabilizing prices or at least fixing prices of everything to a certain value of gold.
Also notice, they “nationalized” the FED and took all the FED assets giving the FED Woodrows instead. They devalued the dollar but gave everyone MORE of them to spend.
Remember..the problem wasn’t that the economy was bad or that people were not buying and selling but that people were not buying and selling and giving the government their cut or letting them know about it. People were using pieces of gold based on weight, size, and such as currency between each other and bartering between each other.
The FED and the government could not track or manipulate these transactions, so they REMOVED the ability to behave this way and confiscated all the gold. Second big power grab but government to control us through money, first was making the FED to begin with.
Just wait, soon they will do the it with silver and gold again when Obama drives us into depression.

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Johnny Rocket
Posted on January 11, 2013 at 3:56pm
It may have worked back then because the dollar was tied to GOLD… What’s the Dollar tied to today??? I hate to tell you but if the dollar is going down and it’s not tide to anything, there’s nothing to hold it up… Spoiler alert, it may have worked back then, but good luck with it working in the future… We may as well get paid in Monopoly money…

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naughtycal
Posted on January 11, 2013 at 3:48pm
You can place as many zero as you can fit on a bill it’s worthless without the assets to back it.

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- Jhn'1
  Posted on January 11, 2013 at 4:14pm
  But those assets don’t need to be “new” assets.
  New fiat money against existing assets works too.
  Well, except for those holding the old assets, and those holding old fiat money, and financial accounts numerated in that particular fiat currency.
  The old money is now worth less (worldwide) as are accounts numerated in the old money (devaluation).
  The old assets are inflated in price (and by statute the IRS can tax the increase in price as if it was an increase in value)
  The value of the economy is the same, the new fiat currency just steals some of that value for itself from the existing owners.
  
  Report this comment
SGT Rock
Posted on January 11, 2013 at 3:48pm
If they mint the Trillion dollar coin they need to put Obama’s face on it so we can point to it and say “YOU DID THIS”.

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- ICSPADES
  Posted on January 12, 2013 at 7:03am
  If they make one with his face on it we can all shout to the heavens cause they only put dead ones on coins.
  
  Report this comment
TIMEBOMB
Posted on January 11, 2013 at 3:46pm
As your gay Marxist ruler I want my serfs to know that this story warms my cold black heart,I’m doing everything in my power to destroy your dollar and soon I’ll get you to third world status where you belong.Ole pops is so proud of me,he has special insight as to what ti takes to be so evil since he’s the prince of darkness and I know he appreciates all the hard work I’ve put in to destroy your country.

It won’t be long serfs and you’ll be scraping garbage cans for food,begging my regime for help to make the violence stop,maybe I will make it stop maybe I won’t,it’s up to me your magnificent ruler for life. Praise be to me BHO.

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- ArmedAndReallyPissed
  Posted on January 11, 2013 at 4:01pm
  As always, LOL.
  
  Report this comment
Lloyd Drako
Posted on January 11, 2013 at 3:44pm
The date given here must be wrong, at least if you mean to call these “New Deal” measures. Jan. 31, 1933 was a full month before FDR’s inauguration.

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GhostOfJefferson
Posted on January 11, 2013 at 3:44pm
*—————————————————————————*
* *
* *
* *
* *
* ONE BRAJILLION GAZILLION DOLLARS *
* *
* *
* *
* *
* :) *
* *
* IN OBAMA WE TRUST *
* *
* *
* *
* *
* *
* *
*—————————————————————————*

Here, print this out and use it, it’s free money. Is it legal? I’ll have you know that I have the same Constitutional authority as the Federal Reserve to print money, so feel safe in utilizing this new currency!

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- ArmedAndReallyPissed
  Posted on January 11, 2013 at 4:00pm
  I’m sorry GHOST, but i will never except your currency for use. It is totally disgusting, perverse and Un-American. In fact, just the sight of it makes me Hurl. It says *** In Obama we Trust ***
  
  I do however forgive you. We all make mistakes my Friend.
  
  Report this comment
- GhostOfJefferson
  Posted on January 11, 2013 at 4:07pm
  But Armed, it’s good for all debts public and private! It’s backed by the full faith and credit of me. And, like I said, I’ve checked very carefully and crossed every “T” and dotted ever “I” and it turns out that I have the same Constitutional authority to print and issue currency as the Federal Reserve. So hey, why not just make change with it, and then you’re rich!
  
  Report this comment
- ArmedAndReallyPissed
  Posted on January 11, 2013 at 4:21pm
  GHOST : Any chance you could just “tweek” it a little and instead of *In Obozo we Trust*, maybe have *In Communism we Destroy* ? I have some EXTRA TAXES AND INSURANCE that i’ll need the extra Money for, so your offer is extremely tempting.
  Please let me know.
  
  Report this comment
- GhostOfJefferson
  Posted on January 11, 2013 at 4:36pm
  How about this:
  
  In Bob Dobbs We Trust. All Hail the Sub-Genius
  
  I’m willing to meet you in the middle, as you can see. :)
  
  Report this comment
- ArmedAndReallyPissed
  Posted on January 11, 2013 at 5:36pm
  You SO have a deal ! I hope you come back to read this reply ( i’ve been gone for a bit ) because i would like to drive out in a Big Rig to pick up a few month’s supply. Hope your Home and not busy on Sunday. Otherwise, i’ll just sit and wait till your available. :)
  
  Report this comment
djohn78
Posted on January 11, 2013 at 3:44pm
Where is that bill now and what is it worth to collectors?

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- @leftfighter
  Posted on January 11, 2013 at 3:48pm
  I saw it in a rare money exhibit at the Smithsonian when I was in DC for 8/28.
  
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@leftfighter
Posted on January 11, 2013 at 3:37pm
If nobody else is gonna say it, I will.

Woodrow Wilson.

I HATE that guy!

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@leftfighter
Posted on January 11, 2013 at 3:36pm
$35 gold prices…

You don’t get those days back.

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doomytram
Posted on January 11, 2013 at 3:33pm
I’ll bet you 2 trillion dollar coins that a wheel barrow full of singleton’s won’t buy you a loaf of bread in couple of years. Might as well use Bills as toilet paper, but you would get high off of that residual cocaine.

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- Iamnotanumber
  Posted on January 11, 2013 at 5:06pm
  we’ll be lucky if a wheel barrow of $1T coins will by our bread when it finally comes!
  
  Report this comment
ArmedAndReallyPissed
Posted on January 11, 2013 at 3:28pm
Business

“The True Story of the Time the Government Printed a $100,000″ Bill…………………………………………
AKA : the amount paid in interest every Nanosecond on the National Debt.

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forthepeople
Posted on January 11, 2013 at 3:26pm
The robber barons will not let them do that today, meaning they would have to work for it instead of legal stealing .

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progressiveslayer
Posted on January 11, 2013 at 3:25pm
Not to worry folks because uncle Ben will be printing 5 10 20 million dollar notes soon enough,stay tuned,the Obama depression we can blame on everyone else is coming right up.

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- @leftfighter
  Posted on January 11, 2013 at 3:49pm
  If there’s a bright side, people in debt will be able to pay it off quick.
  
  Of course, they won’t be able to eat.
  
  Report this comment
- Snowleopard {gallery of cat folks}
  Posted on January 11, 2013 at 4:18pm
  @Progressive:
  
  I think we are seeing the opening moves of a new gambit by Obama. Something here is not making sense with the $1 Trillion platinum coin, and its a feeling I cannot ignore nor shake.
  
  Report this comment

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