US Silver Purchase Act of 1934
By LARRY ROMANOFF – September 14,
2020
Steve Hanke, an Economics Professor Johns
Hopkins University in Baltimore, wrote a good article on this topic in the
November, 2010 issue of Globe Asia, titled, "America's Plan to Destabilise China - Currency: The Secret Weapon".
It is available online and worth reading. [1]
On August 9, 1934, President Roosevelt implemented yet another Executive Order, this time number 6814, called The Silver Purchase Act,[2] that specified essentially two things. One, the seizure of all silver in the US, and two, a huge program to purchase silver on the open market at almost three times the then current market price. From any rational standpoint, this action was bizarre.
On a spurious pretense of being under
pressure from domestic silver producers (who were not suffering at all),
Roosevelt defied overwhelming criticism from every side by enforcing this act (originated
by the FED) which directed the Treasury (or the FED) to purchase silver at a
price of at least US$1.29 per ounce, which was nearly three times the then
market price of 45 cents. The US government did indeed nationalise the US
silver stocks, but by purchasing that silver from Americans at the old price of
$0.45. Only after that did the Treasury offer to purchase silver at the much
higher price. This action vacuumed up
billions of scarce government funds at the depth of the Great Depression when
most Americans were struggling to survive and avoid starvation and bankruptcy.
The people paid an enormous price for a policy of no apparent benefit to
anyone. Silver producers benefitted marginally and temporarily, but the
entire industry employed only a few thousand people, so this massive program was definitely not intended for them,
regardless of the propaganda narrative.
But there's more to the bizarre nature of
this Silver Purchase policy. The
legislation primarily authorised the Treasury and the FED to purchase silver
"from foreign countries" on the open market - on the New York
Futures Exchange. But that purchasing on ‘the open market’ never occurred, nor
would it. All we need to do is think. Not even a crazy person would spend money
buying something at $1.29 when that commodity was widely available on world
markets everywhere at $0.45. So what really was driving this new policy?









