The First Debt Ceiling Crisis

13 Pages Posted: 6 Jul 2016 Last revised: 11 Nov 2017

See all articles by Kenneth Garbade

Kenneth Garbade

Federal Reserve Bank of New York

Date Written: 2016-06-01


In the second half of 1953 the United States, for the first time, risked exceeding the statutory limit on Treasury debt. This paper describes how Congress, the White House, and Treasury officials dealt with the looming crisis—by deferring and reducing expenditures, monetizing “free” gold that remained from the devaluation of the dollar in 1934, and, ultimately, raising the debt ceiling.

Keywords: debt ceiling, monetization of gold, U.S. Treasury

JEL Classification: E42, H63, N22

Suggested Citation

Garbade, Kenneth, The First Debt Ceiling Crisis (2016-06-01). FRB of NY Staff Report No. 783, Available at SSRN:

Kenneth Garbade (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics