1944 Gold Coin Memorandum from Treasury
GoldFinger1969
Posts: 3,380 ✭✭✭✭✭
I thought this memorandum was fascinating. It's from the Treasury Dept. to the NY branch of the Secret Service.
They wanted guidance on what they should do since even during the war (1944) lots of NYC dealers were selling gold coins en masse. Treasury came back with guidance which amounted to: if the buyers pay a premium, it's de facto a numismatic coin and it's exempt. The only restriction was on $2.50 Quarter-Eagles where they limited it to 4 coins for each mint/year (apparently realizing the cheapest coin was where hoarders among the public would target).
Thanks to Roger Burdette for uncovering this fascinating memo and letting me post it.
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Key points, and at points it gets ambiguous and you almost need to be a lawyer to decipher it
, but I note the following:
*The memo concerns the Gold Reserve Act, which pretty much codified FDR's EOs on gold ownership.
*The memo was from Ansel F. Luxford who worked for the Treasury Dept. under Robert Morgenthau, Jr. in the 1930's and 1940's.
*Appeared that even during the war NYC coin dealers were selling coins to anybody at a premium to $35/oz.
*Notice that they didn't want anybody using a loophole to collect Quarter-Eagles, $2.50 in gold.....you could only have 4 of them from the same year and mint and as part of a larger collection/display.
*Quarter-Eagles aside...the memo is basically telling the NY office of the Secret Service that their interpretation is that ANY amount of gold coins with numismatic value could be bought by ANYBODY so long as the Quarter-Eagles provisions weren't violated (I wonder if they focused on the $2.50 gold coin because that's what most Americans could have afforded at most both pre- and during the war).
*In addition, you didn't need to be a "collector" and the coins didn't have to be part of a formal collection.
Section 20 apparently is the enforcement mechanism to "force" Americans to turn in their gold coins under EO's for April 5th, August 28th, and Treasury Order of December 28, 1933.
*Coin must have been rare as of December 28th, 1933 (the regulation is getting political and legal and confusing at this point in time, contradicting itself from sentences earlier or making it confusing, IMO).
*Treasury basically admits that any gold coin which sells at a premium to $35/oz. is clearly possessing of rare and numismatic value. In fact, there appears to be a court case which the government accepts and which Treasury said would certainly prevent seizure of any coins sold at a premium as well as any civil or criminal penalties, as there was no intent to violate the relevant laws by buying/selling gold coins at bullion value, only at higher prices indicating numismatic and rare value.
Net-Net, the memo tells the Secret Service to NOT seize the dealers gold coins (I guess that was under consideration) since they said we we don't have a case under the existing EO's and rules and court cases.
contraband section on the top left, interesting item ya got there
Thank RWB, he found the memo in the NARA or Newman archives.
What is fascinating is that it shows that even though the early actions of FDR in 1933-34 may have SEEMED clear -- no gold ownership except for special circumstances -- you can see here that Treasury is being very lenient.
You could have a common gold coin and as long as the dealer "ripped you off" by charging a high price....VOILA !! It was a numismatic coin.
The one thing not specified: how much of a premium to escape scrutiny. Based on prices that many of you remember from the 1960's, I would say the price in the 1940's (remember, there was a war going on) was probably in the $40's.
Despite the "ban" on private ownership of gold coins/certificates/bullion, there were ways to circumvent that.
Somehow a few of these ended up private hands, which seems unusual for the era:
This 49.04 ounce United States Assay Office New York bar used to be a part of my birth year collection, but I thought that it might be a bit of a problem disposing of all at once, so I traded it for a greater weight of American Eagle coins that could be sold individually. That's an 1850-O Dollar pocket piece next to it for scale.
I'm not familiar with that bar....49 ounces of gold ? Wow....
The NY Assay Office created it out of bullion gold...and then sold it...released it....how did it get publicly traded, unlike official 400 ounce troy bars that were used in trade/bank settlements ?
Don't know. Perhaps they made larger bars for the jewelry trade, and you just seldom see them nowadays.
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This discussion that I just started may be of interest here, in regards to availability of gold bars from the US Mint:
https://forums.collectors.com/discussion/1121097
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I wonder if your difficult to dispose of 49 ounce gold bar remains intact as a 49 ounce gold bar dated 1950 ?
What you saw as just one item could have been easily divided and reused over the years since.
Today I see 49 ounces times $5,100 = $249,000 plus numismatic value if kept in one piece.
I'm reading that Louis Eliasburg apparently began and largely acquired most of his gold coins as a way to circumvent the 1933-34 Gold Orders of FDR. He apparently told several people the only way he could hold gold was to become a numismatist.
A banker, he clearly believed in hard money and wanted to include gold in his portfolio.
Thank you for posting this. Readers of this forum will know that FDR's Executive Order 6102 did not prohibit all ownership of gold. It expressly permitted gold ownership to "an amount not exceeding in the aggregate $100 [in face value] belonging to any one person" and to "gold coins having a recognized special value to collectors". And from the document you posted, it seems plenty of people were still buying gold.
At least in NYC !!!
Which is where you would expect to see it happening, as opposed to other countries like France where gold ownership was largely concentrated in rural, farming areas.
I can't find that Supreme Court case cited -- "98" appears to be the defendant ? -- but it appears that things changed from 12 years earlier and Treasury/Secret Service was no longer as hard as they were when they grabbed Izzy Swit's attache case filed with $2,000 in gold coins.
It's one of several cases where the US government brought an action against an actual object instead of a person. This case was brought against 98 double eagles in the Eastern District of PA in 1937. A more famous version is United States v. One Solid Gold Object in Form of a Rooster - pretty entertaining. Links below.
https://en.wikipedia.org/wiki/United_States_v._One_Solid_Gold_Object_in_Form_of_a_Rooster
https://flawfinder.ai/federal/district/pennsylvania-eastern/cases/united-states-v-98-20-united-states-gold-coins-7304437/
That gold rooster was a good investment.
Micah Langford - https://www.oldglorycoinsandcurrency.com/
Somewhat related to the 1944 Memo....I'm seeing and hearing more and more of people wanting something portable that they can move easily and/or hide from what they consider confiscatory theft policies of certain politicians. I'm talking wealth taxes and and this demonization of the so-called "haves." More and more talk from people who are more and more convinced that all this talk about "tax the rich" is really meant to go after hard-working men and women like them.
These are new gold and silver buyers. These aren't ammo-canned goods-survivalist types, either. They're hard-working people who see the Mayor of NYC talk about taking down the exemption limit for estate taxes in NY State from $7 MM to $750,000. $750,000 won't buy you a home in most areas of Staten Island or Queens. Then you have a "wealth tax" in California which is more akin to asset expropriation.
Financial assets have to go through probate (as I have learned the last few years assisting on estates) and it's all trackable. A significant gold or even silver coin/bullion collection can be given to someone with no paper trail.
The Rich have homes all over the country and the world plus trusts, Cayman bank accounts, etc. Plus their wealth is so large not sure 2-10% in coins or bars is feasible. But for people with a net worth < $10 MM....it's doable and apparently increasing.
In 1933, they said keep everything but turn in your gold. Now it seems like it's turn in everything so maybe get some gold ?
I bought Elliasberg’s final gold coin purchase. A 1965
Peru gold coin. It was available at the Heritage Eliasberg foreign coin auction in New York City. Graded by NGC after the sale.
Fascinating, thanks for the info. When did you buy the coin, Oreville ?
You know, PT, I am wondering if that "98" case might be the government's taking of Izzy Switt's suitcase full of coins when his dealer license lapsed. As I recall, it was about $2,000 in coins. Have to go back and check the year that happened but parts line up.
Prolly.
I won that Eliasberg 1965 Peru gold coin at the Heritage auction probably in 2006. A couple of our posters attended as well,
I hadn't thought about it when I posted, but I bet you're right. He was in Pennsylvania, and I vaguely remember reading about the government seizing a large group of coins he owned years BEFORE the 1933 Saint fiasco. If it was the mid 30s, the timeline matches the "98" case I quoted above.
Very good catch.