Building the Nation’s Reserves
During the tumultuous late 19th century, the U.S. government found it necessary to increase its reserves of precious metals. The Treasury offered certificates in exchange for deposits of gold and silver. The first Gold Certificates were issued between 1865 and 1936. In 1933, the nation faced not only a severe economic depression, but also a banking crisis.
The public began demanding gold; runs ensued on both Federal Reserve Banks and commercial banks. Soon, only Federal Reserve Banks were permitted to hold gold. Under the Gold Reserve Act of 1934, Federal Reserve Banks were required to turn over all gold coin, bullion, and certificates to the U.S. Treasury in exchange for a new type of Gold Certificate.