20th century: Fed, gold, and 1971

In October 1907, New York trust companies faced a liquidity panic and J. P. Morgan’s group organized private support because no Federal Reserve yet existed. Sixty-four years later, on 15 August 1971, the United States closed the last official promise that foreign governments could still turn dollars into gold at a fixed price — the gold window. Between those dates sit a new central bank, the wartime end of classical gold, a German mark that ceased to work as money, a US recall of private monetary gold, and a postwar dollar system built on official convertibility at $35 an ounce.

This chapter is that crowded modern door. Earlier chapters stretch across long spans of mint practice and statute fights. Here the regime changes pack into a shorter run of calendar time — and into the world most readers still live inside.

The century in one arc

Congress answered 1907 with emergency currency legislation in 1908 and the Federal Reserve Act in 1913. World War I then broke the classical gold standard’s peacetime convertibility among major powers. Germany’s mark collapsed in 1923 under war, reparations, and extreme paper issue. In 1933 the United States recalled private monetary gold and revalued official gold for government accounting. Bretton Woods in 1944 rebuilt a gold-exchange system: other countries held dollars, and those dollars were supposed to be convertible into gold at $35 an ounce for official holders. On 15 August 1971 that official gold window closed.

Private crisis management becomes public central banking. Gold convertibility ends for wartime, returns in flawed forms, then ends again for US citizens and later for foreign official dollar holders. Paper money does not merely “inflate a little”; in Weimar it loses daily function. Official prices and windows matter because they are the legal hinges, not metaphors.

Articles in this chapter

Read in calendar order for the century’s sequence, or open the hinge you already need — Weimar, 1933, or 1971 — and use the neighbors to see what sits before and after.

1. Panic of 1907 and the Fed — Trust-banking liquidity crisis and the political road to the Federal Reserve; the Fed did not cause 1907; created after, not before.
2. End of the classical gold standard — How peacetime classical convertibility broke under World War I and what “gold standard” meant in the years that followed.
3. Weimar 1923 — The German mark’s collapse into hyperinflation; a paper-money catastrophe with its own causes, dates, and institutional setting.
4. 1933 gold recall — US private gold recall and official revaluation; citizens lose monetary gold rights years before 1971.
5. Bretton Woods and Nixon 1971 — Bretton Woods as a gold-exchange dollar system at $35 an ounce, and the 15 August 1971 close of the gold window for foreign official holders.

When you want an earlier case of paper losing trust, open John Law and the Mississippi Bubble (1720) in Banks & paper — same kind of mechanism, different century. Do not treat 1720 and 1923 as one continuous event, or Weimar and Nixon as one print job. Return to Sound Money History for ancient coinage, banks-paper, America, or silver.

This overview does not retell every article in full. It does not turn 1907 into a personality cult, and it does not treat 1971 as a sudden invention of paper money. The claim stays sharp: from private rescue to central bank to paper collapse to gold recall to the gold-window close.