Executive Order 11110 was issued by U.S. President John F. Kennedy on 4 June 1963.

This executive order delegates to the Secretary of the Treasury the president's authority to issue silver certificates under the Thomas Amendment of the Agricultural Adjustment Act.

[edit] Purpose

The executive order (E.O.) modifies a pre-existing order issued by U.S. President Harry S. Truman in 1951. E.O. 10289 states:

"The Secretary of the Treasury is hereby designated and empowered to perform the following-described functions of the President without the approval, ratification, or other action of the President..."

The order then lists tasks (a) through (h) which the Treasurer can now do without bothering the President. None of the powers assigned to the Treasury in E.O. 10289 relate to money or to monetary policy. Kennedy's E.O. 11110 then instructs that:

SECTION 1. Executive Order No. 10289 of September 9, 1951, as amended, is hereby further amended (a) By adding at the end of paragraph 1 thereof the following subparagraph (j):

'(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12, 1933, as amended (31 U.S.C. 821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of an outstanding silver certificates, to prescribe the denominations of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption,' and (b) By revoking subparagraphs (b) and (c) of paragraph 2 thereof.

SECTION 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue anymay be enforced as if said amendments had not been made.

John F. Kennedy, THE WHITE HOUSE, June 4, 1963.

[edit] Background

To understand exactly what Kennedy's order was trying to do, we must understand the purpose of the legislation which gave the order its underlying authority. The Agricultural Adjustment Act of 1933 (ch. 25, 48 Stat 51) to which Kennedy refers permits the President to issue silver certificates in various denominations (mostly $1, $2, $5, and $10) and in any total volume so long as the United States Department of the Treasury has enough silver on hand to redeem the certificates for a specific quantity and fineness of silver and that the total volume of such currency does not exceed $3 billion. The Silver Purchase Act of 1934 (ch. 674,48 Stat 1178) also grants this power to the Treasury Secretary subject to similar limitations. Nowhere in the text of the order is a quantity of money mentioned.^[1]

As economic activity grew in the 1950s and 1960s, the public demand for low denomination currency grew, increasing the Treasury's need for silver to back additional certificate issues and to mint new coins (dimes, quarters, half dollars). However, during the late fifties the price of silver began to rise and reached the point that the market value of the silver contained in the coins and backing the certificates was greater than the face value of the money itself.^[1]

To conserve the Treasury's silver needs, the Silver Purchase Act and related measures were repealed by U.S. Congress in 1963 with Public Law 88-36. Following the repeal, only the President could authorize new silver certificate issues, and no longer the Treasury Secretary. The law, signed by Kennedy himself, also permits the Federal Reserve (Fed) to issue small denomination bills to replace the outgoing silver certificates (prior to the act, the Fed could only issue Federal Reserve Notes in larger denominations). The Treasury's shrinking silver stock could then be used to mint coins only and not have to back currency. The repeal left only the President with the authority to issue silver certificates, however it did permit him to delegate this authority. E.O. 11110 does this by transferring the authority from the President to the Treasury Secretary.^[1]

E.O. 11110 did not create authority to issue new silver certificates, it only affected who could give the order. The purpose of the order was to facilitate the reduction of certificates in circulation, not to increase them. In October 1964 the Treasury ceased issuing them entirely. The Coinage Act of 1965 (PL 89-81) ended the practice of using silver in most U.S. coins, and in 1968 Congress ended the redeemability of silver certificates (PL 90-29).

In summary, E.O. 11110 did not create new authority to issue additional silver certificates. In fact, its intention was to ease the process for their removal so that small denomination Federal Reserve Notes could replace them in accordance with a law Kennedy himself signed.^[1]

[edit] Revocation

E.O. 11110 was never reversed by President Lyndon B. Johnson and remained on the books until President Ronald Reagan issued Executive Order 12608 on 9 September 1987 as part of a general clean-up of executive orders. This Order specifically revoked the sections added by E.O. 11110 which effectively revoked the entire Order. However, by this time the remaining legislative authority behind E.O. 11110 had been repealed by Congress when Pub.L. 97-258 passed in 1982.^[1]

[edit] Conspiracy theory

Edward Flaherty, a professor of economics at the College of Charleston in South Carolina, wrote an essay entitled Debunking the Federal Reserve Conspiracy Theories, in which he argues that Executive Order 11110 is quite infamous among conspiracy theorists, such as Jim Marrs, who believe President Kennedy was killed by the men who have control over the Federal Reserve Board, based on arguments that can be proven to be false.^[2]

[edit] References

[edit] See also

• Bimetallism
• Silver standard
• United States Note
• Kennedy assassination conspiracy theories

[edit] External links

Wikisource has original text related to this article: Executive Order 11110

• John F. Kennedy: Executive Order 11110
• Executive Orders Disposition Tables, John F. Kennedy - 1963
• Codification of EO 10289 at the National Archives
• Kennedy Dollar ($2)
• Kennedy Dollar ($5)