Currency called in during the last depression?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I'm not sure about this, it's been years. I think I recall my Mother telling me that during the last depression currency was called in and then reissued. The bills were slightly different and you received the current "equivalent" to what you had stashed away. Is my memory correct?
-- Mabel Dodge (email@example.com), September 06, 1999
Gold redeemable cash became fiat money (federal reserve notes)?
-- Charles R. (firstname.lastname@example.org), September 06, 1999.
It is for sure that gold was called in -- under Roosevelt, Americans were ordered to turn in their gold, as per an Executive Order that he issued. (And in that EO, people who had legally acquired gold were branded as "hoarders".)
I sure have never run across references to currency being turned in and re-issued in the U.S. Certainly, what the currency states that it represents has changed -- modern greenbacks are "Federal Reserve Notes", fiat money at its finest, rather than being a "certificate" backed by gold.
One of the Y2K cash stockpiling concerns is that people who have stockpiled $20s/$50s/$100s that are not the new type of "counterfeit-proof" bills might suddenly have to turn them in due to wanting to have all such denominations be safe from counterfeiting, but with no assurance that you would get cash back for turning them in. However, if you instead stockpile $10s/$5s/$1s (and coins), you should not have any worries, and it makes more sense anyhow to store these bills. (Which, traditionally, are not denominations that counterfeiters find profitable.)
-- Jack (email@example.com), September 06, 1999.
I'm not sure if that's true or not, but I don't see what point would that serve if it was a straight exchange. Their would be no net difference.
Along those lines though, I could see them making posession of more than a certain amount of cash illegal.
I could also imagine some type of scheme where they issued a new type of currency which would replace the old, but they would only allow an individual to withdraw a certain amount during a given period of time. The rest of your money would be required to remain in the "sytem." Such an arrangement would force hoarders to turn in all of their old currency, while only allowing them to withdraw a fraction of the amount that they deposited. Even in such a scenario, if you're hoarding cash, who cares? At least you didn't lose all of your "e-money" in a failed bank, and you can exchange your physical money with a bank that is still standing.
However, I think that such a scenario would be unlikely. People hoarding large amounts of cash are doing so in fear of a partial or total collapse of the banking system.
If the system survives (even if there is a partial breakdown), most of the currency being hoarded now will return to the system after the rollover. That's one of the main reasons for converting to cash. If banks are going to fail, we won't know which ones they are until after the fact. I don't feel like waiting in line for years for the FDIC to pay me (if they even pay at all).
On the other hand, if the system doesn't survive, then they will have no way to implement such a scheme, so it would be a moot point.
I think that the most likely outcome will be a run on the banks toward the end of the year (like the 3rd week of December), and when currency supplies get too low, they'll just close the banks until the end of the year. Any banks (if any) still in business after the rollover will be rewarded when hoarded currency is re-deposited with them (hopefully at much higher short-term rates).
-- Clyde (firstname.lastname@example.org), September 06, 1999.
In 1933 when the gold was called in by the government, the gold certificates, the paper money of the time, was also turned in and replaced with silver certificates of the same face value. No longer could you turn your FRN's in and receive the face value in gold, then you received silver if that was what you wanted to do. The silver certificates were phased out in 1964, when the "silver standard" was abolished and the government removed all silver from the coins except for the $.50 piece and the $1.00 coins. (they still were made of 40% silver until the '70's)
Now the coins are zinc, tin, copper... highly valuable materials...; )
rubbin' on the carpet...
-- Dog (Desert Dog@-sand.com), September 06, 1999.
Thanks Dog, that's what I was trying to remember. My Mother has been dead for a long time.
During my childhood she would harp and harp about the Great Depression. She had a tough time getting through it.
The family would joke about Mom and her fear that the world was going to end at any minute, she lived her whole life as a GI.
I laugh when I read the rants about the government on this forum, my Mother could make the most pessimistic look like pollys.
Sorry this is off topic, but lately I remember more and more what Mom would say. I miss her and I wish she were here now.
-- Mabel Dodge (email@example.com), September 06, 1999.
Mabel, both of my parents grew up in the Depression. They are in failing health and memory now, and how I wish I had learned more from their experiences when they were a bit younger! It's easy to think "it will never happen to me" or "never happen to this country" until it does. I'm so sorry that your good Mother is not with you now.
-- Mumsie (Shezdremn@aol.com), September 06, 1999.
Mabel, I could kick myself for all the snickering that I have done over the years when I have read of things like elderly people dying in very modest homes and the subsequent discovery of loads of cash under the matteress or in cookie jars. All because the "old coot" lived during the Great Depression.
Yeah, there is a message there. We just need to listen.
-- King of Spain (firstname.lastname@example.org), September 06, 1999.