I was reading up on the gold reserve act which made it illegal for US citizens to own gold with some minor exceptions.
According to the gold confiscation act which was issued before the gold reserve act the government paid 20.67$ per troy ounce.
Executive Order 6102 required all persons to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for 20.67\$ (equivalent to $408 in 2019) per troy ounce.
However shortly afterwards the government raised the price for gold to 35$ an ounce.
The price of gold from the Treasury for international transactions was then raised by the Gold Reserve Act to \$35 an ounce (equivalent to $691 in 2019). The resulting profit that the government realized funded the Exchange Stabilization Fund established by the Gold Reserve Act in 1934.
The reason gold was confiscated was to end deflationary tendencies . But why does the government raise the price of gold AFTER the confiscation? Wouldn't the effect on deflation be the same if they fixed the price of gold at 35$ in the beginning?
It is stated that the governement used the profit to fund the Exchange Stabilization Fund Is this the only reason the government set the price of gold AFTER all the gold has been collected?