Federal Reserve Notes
From 1914 to June 21, 1917, these banknotes were secured by 100% short term rediscounted commercial paper, plus a reserve of not less than 40% in gold. In 1917, the reserve requirements were changed to not less than 40% in gold with the balance to 10O% consisting in private and public obligations meeting certain legal requirements. From 1914 to 1933, Federal Reserve notes were redeemable in gold upon presentation. In 1933, their redeemability ceased except for those presented by foreign governments, their central banks and certain international organizations.
In 1945, during World War II, the gold reserve requirement was reduced to "not less than 25%." In the 1960's, as the actual gold reserves dropped, there was considerable agitation for the reduction or elimination of this requirement. In 1968, the gold reserve requirement was dropped. Since then they have been secured solely by evidences of private and public debts and have been issuable without limit against such debts. On August 15, 1971, President Richard Nixon suspended their redeemability by foreign governments, their central banks and international organizations. Since then they are in effect fiat money.
- Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-07-12.