Overview

The untold story of how FDR did the unthinkable to save the American economyThe American economy is strong in large part because nobody believes that America would ever default on its debt. Yet in 1933, Franklin D. Roosevelt did just that, when in a bid to pull the country out of depression, he depreciated the US dollar in relation to gold, effectively annulling all debt contracts. From FDR's order for Americans to sell the government all their gold holdings to the Supreme Court confrontation that threatened to finish the New Deal, American Default provides a compelling account of an economic and legal drama that embroiled a nation.

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[Sebastian Edwards] skillfully narrates a pivotal episode in American political and economic history he considers too little remembered. . . . Edwards writes equally knowledgeably about economics and politics: . . . At a time of economic uncertainty at home and abroad, this comprehensive study of an important event in U.S. fiscal history has significant implications for today. --Publishers Weekly Sebastian Edwards has written a very important book on a monumental episode in U.S. history, the great debt default of 1933-35, which was a true turning point in American political and economic history. . . . I highly recommend American Default. It is more than compelling history; it is a tract for our times. ---Gerald P. O'Driscoll Jr., Cato Journal Fascinating. . . . I couldn't put this book down. ---Brenda Jubin, Seeking Alpha Brilliantly told. ---Steve Hanke, Forbes [American Default] is the history of that mighty legal, moral, political and monetary controversy, the effects of which are with us still. . . . [Sebastian Edwards] knowledgably compares the 20th-century American default to Argentina's 2002 abrogation of its dollar denominated debt. ---James Grant, Wall Street Journal Excellent. . . . A fascinating narrative of FDR's decision to devalue the dollar in 1933-34. ---Scott Sumner, EconLog Edwards ends his admirably accessible and illuminating book with some careful thoughts on recent financial crises around the world, such as those in Argentina and Greece, and shows why US gold cases from 1933 to 1935 are a useful precedent to understand how future such crises may be successfully resolved by hewing carefully to the rule of law. He believes that the cases may even be invoked by lawyers in other national, or international, arenas. If so, those involved will, no doubt, turn to this book for inspiration and guidance. ---Benn Steil, Financial World Great book by UCLA economist Sebastian Edwards about a key moment in American economic history. Many economists believe that the most important thing FDR did to help the economy recover from the Great Depression was to go off the gold standard. As part of that policy, he pursued laws that rewrote many bond contracts, annulling gold clauses. It was controversial then (and surely would be again if such an issue were ever to arise). Edwards does a wonderful job telling the story. ---Greg Mankiw, Greg Mankiw's Blog Sebastian Edwards' American Default is just such a superb history of the US exit from gold in 1933-34, satisfyingly detailed and highly accessible on both the relevant economics & law. ---David Frum, A shimmering example of the benefits of historical distance can be found in the UCLA economist Sebasti n Edwards' American Default, a sharp-eyed exploration of a little-noted episode in US economic history. ---Ken Rogoff, Project Syndicate Edwards' book is fascinating, well written and enjoyable. ---Geoffrey Wood, Central Banking Edwards analyses the default that followed President Franklin Delano Roosevelt's 1933 decision to devalue the dollar against gold . . . . The story is fascinating and the lessons eternal. ---Martin Wolf, Financial Times I thought we knew about American abandonment of gold during the Great Depression. But American Default is an eye-opener. It is astonishing how chaotic were the circumstances and how woefully inadequate was understanding. Everyone interested in the history of gold, the Great Depression, the Greek or the Argentine crises, and in the crises to come should read this book. --Anne Krueger, Johns Hopkins University American Default provides an in-depth look at one of the most important, but often neglected, events in U.S. economic history, the abrogation of bond's gold clauses during the New Deal. Not only does the book provide an excellent discussion of the economics of this event, but it is a really good read because it delves into the personalities and the politics behind this effective default. I highly recommend it. --Frederic S. Mishkin, Columbia University A really excellent book. Edwards provides a dramatic and readable account of monumental decisions that changed the course of history. American Default is sure to be a hit. --Michael D. Bordo, Rutgers University American Default is a fascinating and well-written book about the momentous decision to leave the gold standard in 1933. Sebastian Edwards skillfully weaves together the political, economic, and legal aspects of this important episode, with lessons for today. Highly recommended! --Douglas A. Irwin, Dartmouth College, author of Clashing over Commerce: A History of US Trade Policy

A superb history. --David Frum Admirably accessible and illuminating. --Benn Steil, Financial World A magnificent piece of scholarship . . . [that] illustrates the benefits of historical distance in evaluating major events. --Kenneth Rogoff, Project Syndicate American Default is the history of that mighty legal, moral, political and monetary controversy, the effects of which are with us still. --James Grant, Wall Street Journal The story is fascinating and the lessons eternal. --Martin Wolf, Financial Times Brilliantly told. --Steve Hanke, Forbes

"""Brilliantly told.""—Steve Hanke, Forbes “A superb history.”—David Frum “The story is fascinating and the lessons eternal.”—Martin Wolf, Financial Times “American Default is the history of that mighty legal, moral, political and monetary controversy, the effects of which are with us still.”—James Grant, Wall Street Journal “A magnificent piece of scholarship . . . [that] illustrates the benefits of historical distance in evaluating major events.”—Kenneth Rogoff, Project Syndicate “Admirably accessible and illuminating.”—Benn Steil, Financial World"

Author Information

Sebastian Edwards is the Henry Ford II Professor of International Economics at the University of California, Los Angeles. His books include Toxic Aid and Left Behind.

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