ABSTRACT
This chapter provides a brief historical sketch of the monetary system prior to the Great Depression, along with the necessary analysis for understanding the vulnerability of this system and the situation that confronted the government in 1933. It discusses the policy measures actually taken by the New Deal and concentrates on the issues of constitutional law raised by the set of governmental actions, and notably, the abrogation of the gold clause in contracts, public and private, and the judicial confirmation of this action. The chapter also discusses the overall structure of a contractually-derived monetary constitution, and looks at the observed historical record in the light of contractual criteria. It focuses on the alternative monetary arrangements that might emerge from genuine social or constitutional contract. The chapter represents a necessary detour into the realm of welfare economics to examine the grounds for possible governmental intrusion into voluntary private contracts among persons.
