Business

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

[Editor's note: The following is a cross post by Rob Wile that originally appeared on Business Insider]:

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 1/10,000,000th 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.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

St. Louis Fed

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Wikimedia

The reason: no one was buying anything with cash.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Library of Congress

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Library of Congress

Americans agreed to surrender their gold, but it wasn’t enough…

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

St. Louis Fed

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Wikimedia

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

By Infrogmation on 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).

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Library of Congress

The costs: end of Fed independence.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Library of Congress

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

(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.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

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.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

New York Times

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Library of Congress

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

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

Wikimedia

Spoiler alert: It worked.

Business Insider: The True Story Of The Time The Government Printed A $100,000 Bill

EconomistView

©2013 Business Insider, Inc, Rob Wile.

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Comments (44)

  • DZ-015
    Posted on January 11, 2013 at 5:50pm

    The one ounce platinum bullion coin we have minted since 1997 has a face value of $100, event though it is worth about $1600 on the current market. A trillion dollar platinum coin at the same rate would weigh about 3,800,000 Avoirdupois Tons. Even evaluating the “coin” at its present market value, this would come to 237,500 tons, nearly five times the empty weight of the Titanic. Benightedly ludicrous indeed.

    Report Post » DZ-015  
    • turkey13
      Posted on January 11, 2013 at 6:11pm

      We won’t ever need these $100,000 bills. If China the USA the biggest land owner in the country can just give land for our debt. I bet China would write off $ 1.5 trillion for the 87% of Utah we own. Look how much they could reduce transportation cost by bringing their workers over here in their own little island in the middle of the US. I bet Japan would write off $ 3/4 of a trillion if we give them the Grand Canyon. We have rich folks here that would pay big bucks for state parks.Many we can’t even keep up and do the maintenance needed.

      Report Post »  
  • scjeff
    Posted on January 11, 2013 at 5:35pm

    How much value must be deliberately destroyed before it is considered and act of war?

    Report Post » scjeff  
  • Chuck Stein
    Posted on January 11, 2013 at 5:35pm

    Woodrow Wilson on the $100,000 bill. Shocked, I am not.

    Report Post »  
  • DZ-015
    Posted on January 11, 2013 at 5:30pm

    “Benightedly ludicrous” that a trillion dollar platinum coin could sink the titanic? The face value of a one Troy ounce platinum coin is now set at $100. There are 12 troy ounces in a troy pound, and approximately 13.16 Troy ounces in an Avoirdupois pound. Dividing a trillion ounces by 13.16 leaves 759878

    Report Post » DZ-015  
    • DZ-015
      Posted on January 11, 2013 at 5:54pm

      My post was snatched away in mid composition. Even assuming a trillion dollar platinum coin is to be valued at the current market rate of approximately $1600 per ounce, it would weigh over five times the empty weight of the Titanic.

      Report Post » DZ-015  
  • truthnstuff
    Posted on January 11, 2013 at 5:26pm

    Blaze. you seem to be having trouble generating the “next page” urls for stories, resulting in 404 page not found.

    Report Post »  
  • Owt_Raged
    Posted on January 11, 2013 at 5:08pm

    Sorry, I’m keeping my guns, gold, food and water. The government got themselves into this mess. Perhaps the President and Congress can go wash some dishes for China to help pay off some of our debt?

    Report Post » Owt_Raged  
    • scjeff
      Posted on January 11, 2013 at 5:32pm

      Big pictures and very few words in this article. It was definitely put together by an Obama friend. The “it worked” conclusion is hard to reach.

      Report Post » scjeff  
  • Obama_In_PeePee_Is_Becks_Art
    Posted on January 11, 2013 at 5:01pm

    “Spoiler alert: It worked.”

    … and the U.S. remained in a depression years longer than every other country, until Americans kicked the communist(bastard) President out of Office (votes were counted back then) and the new President voted in backed off on the dictatorship and America began to flourish again. This time, in “chains”.

    Report Post » Obama_In_PeePee_Is_Becks_Art  
    • glassaudioguy
      Posted on January 11, 2013 at 5:31pm

      ‘Scuse me, but FDR died in office. I don’t like the progressives any more than you do but at least get your facts straight.

      Report Post »  
    • Capt_Gregg
      Posted on January 11, 2013 at 5:46pm

      “… and the U.S. remained in a depression years longer than every other country, until Americans kicked the communist(bastard) President out of Office (votes were counted back then) and the new President voted in backed off on the dictatorship and America began to flourish again.”

      Since I assume that by “the communist(bastard) President” you mean Roosevelt (the only POTUS from 1933 -1945), I should point out that he was not kicked out of office. He died, and was replaced by his Vice-POTUS, Harry Truman, who was subsequently elected POTUS in 1948 and refused to run again in 1952.

      Report Post » Capt_Gregg  
  • americansfightingforcommonsense
    Posted on January 11, 2013 at 4:39pm

    This is exactly what scares me about where this economy is headed. Buy your food and water storage now, ’cause it’s going to be a bumpy road.

    Report Post » americansfightingforcommonsense  
  • BlackCrow
    Posted on January 11, 2013 at 4:19pm

    Well this time “turn in your gold” will be met with the same reaction as “turn in your guns”.

    Report Post » BlackCrow  
  • Snowleopard {gallery of cat folks}
    Posted on January 11, 2013 at 4:17pm

    Interesting that we have portions of history preparing to repeat themselves again; though in this matter there is one question – do we even have any gold reserves within the Federal reserve or anywhere that are controlled by the Federal government? Has anyone non-fed connected actually counted and audited the gold, if it is there?

    Even with this insane idea of a $1 Trillion platinum coin, there is still something massively fishy at work when Obama and others of the extreme left continue down the path. Something is telling me that we are seeing the opening gambit of an whole new game from Obama.

    This is going to get messy real quick.

    Report Post » Snowleopard {gallery of cat folks}  
    • Vickie Dhaene
      Posted on January 11, 2013 at 4:41pm

      Seems to me as being a great reason to AUDIT THE FED before Geitner can leave.

      Report Post »  
  • crestar5020
    Posted on January 11, 2013 at 4:01pm

    You are right on @leftfighter. Another bright side, just forget about any unsecured debt. Of course your credit rating will hit the skids, but so what, the whole country will be hitting the skids. Inflation will be so high, food and housing will be all anyone can pay for and even that is ‘iffy’. Time to pick up stakes and move to Wyoming, N. Dakota, Utah or the conservative parts of Texas (That excludes Austin and Houston).

    Report Post » crestar5020  
  • VRW Conspirator
    Posted on January 11, 2013 at 3:59pm

    What isn’t mentioned was that this was just a measure to “reflate the economy” which means that it just made everything cost more but didn’t do squat for the economy. By taking everyone’s gold, the government effectively made it illegal to own gold unless there was a “collectible” value to it – like jewelry or archeological or antiques. The government then had to pay you a price for that gold, flooding the market with greenbacks and thus stabilizing prices or at least fixing prices of everything to a certain value of gold.
    Also notice, they “nationalized” the FED and took all the FED assets giving the FED Woodrows instead. They devalued the dollar but gave everyone MORE of them to spend.
    Remember..the problem wasn’t that the economy was bad or that people were not buying and selling but that people were not buying and selling and giving the government their cut or letting them know about it. People were using pieces of gold based on weight, size, and such as currency between each other and bartering between each other.
    The FED and the government could not track or manipulate these transactions, so they REMOVED the ability to behave this way and confiscated all the gold. Second big power grab but government to control us through money, first was making the FED to begin with.
    Just wait, soon they will do the it with silver and gold again when Obama drives us into depression.

    Report Post » VRW Conspirator  
  • Johnny Rocket
    Posted on January 11, 2013 at 3:56pm

    It may have worked back then because the dollar was tied to GOLD… What’s the Dollar tied to today??? I hate to tell you but if the dollar is going down and it’s not tide to anything, there’s nothing to hold it up… Spoiler alert, it may have worked back then, but good luck with it working in the future… We may as well get paid in Monopoly money…

    Report Post »  
  • naughtycal
    Posted on January 11, 2013 at 3:48pm

    You can place as many zero as you can fit on a bill it’s worthless without the assets to back it.

    Report Post »  
    • Jhn'1
      Posted on January 11, 2013 at 4:14pm

      But those assets don’t need to be “new” assets.
      New fiat money against existing assets works too.
      Well, except for those holding the old assets, and those holding old fiat money, and financial accounts numerated in that particular fiat currency.
      The old money is now worth less (worldwide) as are accounts numerated in the old money (devaluation).
      The old assets are inflated in price (and by statute the IRS can tax the increase in price as if it was an increase in value)
      The value of the economy is the same, the new fiat currency just steals some of that value for itself from the existing owners.

      Report Post »  
  • SGT Rock
    Posted on January 11, 2013 at 3:48pm

    If they mint the Trillion dollar coin they need to put Obama’s face on it so we can point to it and say “YOU DID THIS”.

    Report Post » SGT Rock  
  • TIMEBOMB
    Posted on January 11, 2013 at 3:46pm

    As your gay Marxist ruler I want my serfs to know that this story warms my cold black heart,I’m doing everything in my power to destroy your dollar and soon I’ll get you to third world status where you belong.Ole pops is so proud of me,he has special insight as to what ti takes to be so evil since he’s the prince of darkness and I know he appreciates all the hard work I’ve put in to destroy your country.

    It won’t be long serfs and you’ll be scraping garbage cans for food,begging my regime for help to make the violence stop,maybe I will make it stop maybe I won’t,it’s up to me your magnificent ruler for life. Praise be to me BHO.

    Report Post » TIMEBOMB  
  • Lloyd Drako
    Posted on January 11, 2013 at 3:44pm

    The date given here must be wrong, at least if you mean to call these “New Deal” measures. Jan. 31, 1933 was a full month before FDR’s inauguration.

    Report Post » Lloyd Drako  
  • GhostOfJefferson
    Posted on January 11, 2013 at 3:44pm

    *—————————————————————————*
    * *
    * *
    * *
    * *
    * ONE BRAJILLION GAZILLION DOLLARS *
    * *
    * *
    * *
    * *
    * :) *
    * *
    * IN OBAMA WE TRUST *
    * *
    * *
    * *
    * *
    * *
    * *
    *—————————————————————————*

    Here, print this out and use it, it’s free money. Is it legal? I’ll have you know that I have the same Constitutional authority as the Federal Reserve to print money, so feel safe in utilizing this new currency!

    Report Post » GhostOfJefferson  
    • ArmedAndReallyPissed
      Posted on January 11, 2013 at 4:00pm

      I’m sorry GHOST, but i will never except your currency for use. It is totally disgusting, perverse and Un-American. In fact, just the sight of it makes me Hurl. It says *** In Obama we Trust ***

      I do however forgive you. We all make mistakes my Friend.

      Report Post » ArmedAndReallyPissed  
    • GhostOfJefferson
      Posted on January 11, 2013 at 4:07pm

      But Armed, it’s good for all debts public and private! It’s backed by the full faith and credit of me. And, like I said, I’ve checked very carefully and crossed every “T” and dotted ever “I” and it turns out that I have the same Constitutional authority to print and issue currency as the Federal Reserve. So hey, why not just make change with it, and then you’re rich!

      Report Post » GhostOfJefferson  
    • ArmedAndReallyPissed
      Posted on January 11, 2013 at 4:21pm

      GHOST : Any chance you could just “tweek” it a little and instead of *In Obozo we Trust*, maybe have *In Communism we Destroy* ? I have some EXTRA TAXES AND INSURANCE that i’ll need the extra Money for, so your offer is extremely tempting.
      Please let me know.

      Report Post » ArmedAndReallyPissed  
    • GhostOfJefferson
      Posted on January 11, 2013 at 4:36pm

      How about this:

      In Bob Dobbs We Trust. All Hail the Sub-Genius

      I’m willing to meet you in the middle, as you can see. :)

      Report Post » GhostOfJefferson  
    • ArmedAndReallyPissed
      Posted on January 11, 2013 at 5:36pm

      You SO have a deal ! I hope you come back to read this reply ( i’ve been gone for a bit ) because i would like to drive out in a Big Rig to pick up a few month’s supply. Hope your Home and not busy on Sunday. Otherwise, i’ll just sit and wait till your available. :)

      Report Post » ArmedAndReallyPissed  
  • djohn78
    Posted on January 11, 2013 at 3:44pm

    Where is that bill now and what is it worth to collectors?

    Report Post »  
    • @leftfighter
      Posted on January 11, 2013 at 3:48pm

      I saw it in a rare money exhibit at the Smithsonian when I was in DC for 8/28.

      Report Post » @leftfighter  
  • @leftfighter
    Posted on January 11, 2013 at 3:37pm

    If nobody else is gonna say it, I will.

    Woodrow Wilson.

    I HATE that guy!

    Report Post » @leftfighter  
  • @leftfighter
    Posted on January 11, 2013 at 3:36pm

    $35 gold prices…

    You don’t get those days back.

    Report Post » @leftfighter  
  • doomytram
    Posted on January 11, 2013 at 3:33pm

    I’ll bet you 2 trillion dollar coins that a wheel barrow full of singleton’s won’t buy you a loaf of bread in couple of years. Might as well use Bills as toilet paper, but you would get high off of that residual cocaine.

    Report Post » doomytram  
    • Iamnotanumber
      Posted on January 11, 2013 at 5:06pm

      we’ll be lucky if a wheel barrow of $1T coins will by our bread when it finally comes!

      Report Post »  
  • ArmedAndReallyPissed
    Posted on January 11, 2013 at 3:28pm

    Business

    “The True Story of the Time the Government Printed a $100,000″ Bill…………………………………………
    AKA : the amount paid in interest every Nanosecond on the National Debt.

    Report Post » ArmedAndReallyPissed  
  • forthepeople
    Posted on January 11, 2013 at 3:26pm

    The robber barons will not let them do that today, meaning they would have to work for it instead of legal stealing .

    Report Post » forthepeople  
  • progressiveslayer
    Posted on January 11, 2013 at 3:25pm

    Not to worry folks because uncle Ben will be printing 5 10 20 million dollar notes soon enough,stay tuned,the Obama depression we can blame on everyone else is coming right up.

    Report Post » progressiveslayer  
    • @leftfighter
      Posted on January 11, 2013 at 3:49pm

      If there’s a bright side, people in debt will be able to pay it off quick.

      Of course, they won’t be able to eat.

      Report Post » @leftfighter  
    • Snowleopard {gallery of cat folks}
      Posted on January 11, 2013 at 4:18pm

      @Progressive:

      I think we are seeing the opening moves of a new gambit by Obama. Something here is not making sense with the $1 Trillion platinum coin, and its a feeling I cannot ignore nor shake.

      Report Post » Snowleopard {gallery of cat folks}  

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