History Lesson: Gold Confiscation by President Franklin Roosevelt

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  • rambone

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    It is interesting to look at history, and examine what our presidents have been allowed to get away with in the past. Franklin Delano Roosevelt forcibly confiscated the gold privately held by citizens in 1933, with penalty of 10 years in prison for non-compliance.


    Things I'm interested in discussing:

    • Historical significance of the confiscation of private property by the Government,
    • How is this remotely constitutional?
    • Any other instances of confiscation of private property?
    • How did people react/revolt?
    • What was the intention of the order?
    • What were the results (on the economy)?
    • When did it get repealed?
    The Gold Confiscation Of April 5, 1933

    From: President of the United States Franklin Delano Roosevelt
    To: The United States Congress
    Dated: 5 April, 1933
    Presidential Executive Order 6102


    Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates By virtue of the authority vested in me by Section 5(b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled An Act to provide relief in the existing national emergency in banking, and for other purposes~', in which amendatory Act Congress declared that a serious emergency exists,

    I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:

    Section 1. For the purpose of this regulation, the term 'hoarding" means the withdrawal and withholding of gold coin, gold bullion, and gold certificates from the recognized and customary channels of trade. The term "person" means any individual, partnership, association or corporation.

    Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion, and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:
    (a) Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

    (b) Gold coin and gold certificates in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having recognized special value to collectors of rare and unusual coins.

    (c) Gold coin and bullion earmarked or held in trust for a recognized foreign government or foreign central bank or the Bank for International Settlements.

    (d) Gold coin and bullion licensed for the other proper transactions (not involving hoarding) including gold coin and gold bullion imported for the re-export or held pending action on applications for export license.
    Section 3. Until otherwise ordered any person becoming the owner of any gold coin, gold bullion, and gold certificates after April 28, 1933, shall within three days after receipt thereof, deliver the same in the manner prescribed in Section 2; unless such gold coin, gold bullion, and gold certificates are held for any of the purposes specified in paragraphs (a),(b) or (c) of Section 2; or unless such gold coin, gold bullion is held for purposes specified in paragraph (d) of Section 2 and the person holding it is, with respect to such gold coin or bullion, a licensee or applicant for license pending action thereon.

    Section 4. Upon receipt of gold coin, gold bullion, or gold certificates delivered to it in accordance with Section 2 or 3, the Federal reserve bank or member bank will pay thereof an equivalent amount of any other form of coin or currency coined or issued under the laws of the Unites States.

    Section 5. Member banks shall deliver alt gold coin, gold bullion, and gold certificates owned or received by them (other than as exempted under the provisions of Section 2) to the Federal reserve banks of there respective districts and receive credit or payment thereof.

    Section 6. The Secretary of the Treasury, out of the sum made available to the President by Section 501 of the Act of March 9, 1933, will in all proper cases pay the reasonable costs of transportation of gold coin, gold bullion, and gold certificates delivered to a member bank or Federal reserve bank in accordance with Sections 2, 3, or 5 hereof, including the cost of insurance, protection, and such other incidental costs as may be necessary, upon production of satisfactory evidence of such costs. Voucher forms for this purpose may be procured from Federal reserve banks.

    Section 7. In cases where the delivery of gold coin, gold bullion, or gold certificates by the owners thereof within the time set forth above will involve extraordinary hardship or difficulty, the Secretary of the Treasury may, in his discretion, extend the time within which such delivery must be made. Applications for such extensions must be made in writing under oath; addressed to the Secretary of the Treasury and filed with a Federal reserve bank. Each applications must state the date to which the extension is desired, the amount and location of the gold coin, gold bullion, and gold certificates in respect of which such application is made and the facts showing extension to be necessary to avoid extraordinary hardship or difficulty.

    Section 8. The Secretary of the Treasury is hereby authorized and empowered to issue such further regulations as he may deem necessary to carry the purposes of this order and to issue licenses there under, through such officers or agencies as he may designate, including licenses permitting the Federal reserve banks and member banks of the Federal Reserve System, in return for an equivalent amount of other coin, currency or credit, to deliver, earmark or hold in trust gold coin or bullion to or for persons showing the need for same for any of the purposes specified in paragraphs (a), (c), and (d) of Section 2 of these regulations.

    Section 9. Whoever willfully violates any provision of this Executive Order or these regulation or of any rule, regulation or license issued there under may be fined not more than $10,000, or, if a natural person may be imprisoned for not more than ten years or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.
    This order and these regulations may be modified or revoked at any time.


    /s/

    Franklin D. Roosevelt
    President of the United States of America
    April 5, 1933

    Continuing our discussion:


    Don't forget that the government outright confiscated gold with Roosevelt's Gold Confiscation Act.

    Bank safety deposit boxes were opened. Individuals could 'only open safety deposit boxes in the presence of an IRS agent'. Bars and bullion were confiscated. numismatic coins, jewelry were left alone.


    From what I understand, many of the safety deposit boxes were opened under the course of the banks being taken over.

    I also read a rumor that some bank personnel were deputized and given authority to open boxes to look for bars and bullion.

    What is real unsettling is that they paid you a fixed amount of $20 per ounce (later on that was raised slightly).

    So if you had 100 oz back then, you would have $2,000
    But today, it would be over $100,000. (but if you had a gold minted coin from 1933--most were melted back down, before some were issued---those are worth $4million to $7million for a ONE OUNCE coin!)

    Now, Nixon closed the gold standard in 1971 (which meant you could no longer be paid gold for redeeming federal debt notes).
    So people should have nabbed up all the gold they could have (I did not, because I was not born yet).
    That was $35 per ounce.
    Gold right now is $1,005.70 ask price today.

    Show me a better investment than that!


    That is so messed up. I can't imagine forcing Americans to have an IRS agent being present while opening my safe deposit box. Or deputizing bankers to open the boxes without permission.

    Sounds absolutely intrusive and unconstitutional. The 4th Amendment protects us against illegal searches and seizures. Why did people let this happen?

    FDR was a Statist and a Socialist. He obviously wanted to give unlimited power to the Federal Reserve, at the detriment of the American people. Forcing them into this, at the point of a gun. He is one of the worst presidents in the history of our country. No wonder he is one of Obama's heroes.
     
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    CarmelHP

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    Now, Nixon closed the gold standard in 1971 (which meant you could no longer be paid gold for redeeming federal debt notes).
    So people should have nabbed up all the gold they could have (I did not, because I was not born yet).
    That was $35 per ounce.
    I don't believe individuals could redeem for gold, it was for international monetary transactions only IIRC. Private bullion possession was not legalized again until December 31, 1974.
     

    cosermann

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    One of the historical exceptions:

    "gold coins having recognized special value to collectors of rare and unusual coins."

    In otherwords, numismatic or semi-numismatic cold coins - something that had value beyond the amount of gold; more difficult to value and hence compensate for, thus excluded.

    Something to think about.
     

    pudly

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    One of the historical exceptions:

    "gold coins having recognized special value to collectors of rare and unusual coins."

    In otherwords, numismatic or semi-numismatic cold coins - something that had value beyond the amount of gold; more difficult to value and hence compensate for, thus excluded.

    Something to think about.

    Not really. I've always laughed at the gold bugs that claim that if anything like this ever happened again, that coins pre-1933, collectible coins, jewelry, etc would be excluded. Do they actually think that any new such law would have to be written to exclude such items? THERE IS NO SUCH REQUIREMENT. Those that want to take your property can write such a law any way that they wanted. Historical precedent means nothing.
     

    jedi

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    rambone I'm not sure I follow what path you wanted this topic to take? Is your ultimate question how did the US Citizens allow the federal government to take all their goal and why did they not revolt, complain, etc?

    I think someone already hit it on the nail. Most people in the country were barely able to eat for the day and were left wondering what they were going to eat the next day and how they were going to feed their families. Faced with that situation and news traveling very slow (no internet, no twiter, local newspaper, etc.) It's easy to see that the PEOPLE just did not really have a chance to deal with it. Plus there was no real leader (at least that I know of) against this action. So the PEOPLE could not rally behind a movement to stop the feds from doing this nor could the rally behind a leader to bring about a revolution.

    Could the same happen now? Yup! Provided the following occurs:
    1) The internet is taken down which Hackers have advised congress only takes 10 minutes at most
    2) Radio/TV becomes controlled by fed only. They have that power already when those emergency messages appear. So cook up an "emergency" and you can take down the Radio/TV
    3) That leaves us with Satellite Radio & Newspapers. Newspapers we already know have been bought out. S. Radio does not cover everyone so info will be limited at best.

    DOOM & GLOOM I know but sadly boys & girls it's all there already just waiting for an excuse.
     

    cosermann

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    Most people in the country were barely able to eat for the day and were left wondering what they were going to eat the next day and how they were going to feed their families.

    Unemployment in the U.S. rose to a high of 25% briefly during the Great Depression.
     

    rambone

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    rambone I'm not sure I follow what path you wanted this topic to take? Is your ultimate question how did the US Citizens allow the federal government to take all their goal and why did they not revolt, complain, etc?


    I'm just amazed that it happened, wanted to pass on the information so other people learn of it, and raise some questions about it.

    I guess it is clear that FDR merely took advantage of a crisis and robbed the American people. To make it a crime to own gold!? Talk about a victimless crime! Talk about tyranny! We must learn from this and never allow it to happen again.
     

    cosermann

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    Before FDR the U.S. was on a gold standard. In order to move to a fiat money supply, and all the control, etc. that goes along with that, something like this was a "necessary" step.

    Something like a gold standard would limit the "stabilization policies" the Federal Reserve can use and give government very little discretion to use "monetary policy". It all comes back to control of the money supply.

    Not saying it was right. Just suggesting why it was done.

    A couple of things gold standards are very good at are - keeping inflation low, and giving people a high degree of trust in a currency so backed.

    Here's an interesting article from the Motley Fool that provides a lot of context:
    The Great Depression, the gold standard and FDR
     
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