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Why Did The United States Follow The Gold Standard?

511 Words3 Pages

Before the Great Depression, the United States was one of the many industrialized countries that followed the gold standard, very different than what it is today. This enabled countries to conduct trade and exchange their products because others followed the same monetary system. In order to sustain the value of a dollar, countries had to follow the same system, however, as the Great Depression happened and countries began to leave the system of the gold standard because of reasons such as having an economy that is unable to keep up with the official system. For exapmle, after the First World War, the economy of Germany wasn't able to go on because of the immense debt that they owed. In the case of the United States, the Federal Reserve decided to sustain stability internationally instead of focusing on the prosperity of their country.

The United States was having difficulty continuing to follow a policy that used the gold standard. Eventually, during the early 1970s, the country eventually stopped following the gold standard. The US was increasing …show more content…

Since this act was passed during Roosevelt's presidency, the president was able to negotiate with other countries in order to reduce the tariffs. These changes made from the Hoover Republicans to the Roosevelt Democrats created an inconsistency of the government. During Hoover's time in power, he had allowed Congress to increase the rates of tariffs to points that could be immensely dangerous to the United States. Roosevelt on the other hand had worked alongside with Congress in order to ensure lower tariffs by creating a trade policy that would allow to do so. These barriers set to the US' trade would primarily be decided by the President. Overall, this inconsistency would negatively affect the United States economy because of the constant shift in it's

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