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

Business Insider

View gallery

.

Wikimedia Commons


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 1/10000000th 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.

View gallery

.

St. Louis Fed



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

View gallery

.

Wikimedia



The reason: no one was buying anything with cash.

View gallery

.

Library of Congress



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

View gallery

.

Library of Congress



Americans agreed to surrender their gold, but it wasn't enough...

View gallery

.

St. Louis Fed



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

View gallery

.

Wikimedia



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

View gallery

.

Infrogmation/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).

View gallery

.

Library of Congress



The costs: end of Fed independence.

View gallery

.

Library of Congress



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

View gallery

.

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.

View gallery

.

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.

View gallery

.

The New York Times



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

View gallery

.

Library of Congress



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

View gallery

.

Wikimedia



Spoiler alert: It worked.

View gallery

.

EconomistView



More from Business Insider:

View Comments