The National Banking Holiday occurred on March 6th, 1933. The nation was facing a banking emergency as there was not only not enough currency to support the commercial growth of the country, but also because American’s were losing faith in the banks and were keeping their gold at home. Pre 1933 gold was the security backing for the dollar. Useable money in circulation had to be backed by gold, without the gold the money supply was stifled.
The solution was to create an ‘elastic’ currency that would not be infringed by the limitations of gold. This currency is backed by YOU and your securities. The federal reserve act clearly shows that a Note, executed by an individual, can be used in the exact same manner as was gold. A deposited note, just like a deposit of gold, would create the issuance of circulating currency better known as federal reserve notes.
1933 video (30 min)
