Can the 1933 confiscation occur again?

jpkinla

< Executive Order: By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists; That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.

The government essentially made it illegal to own gold back in 1933. What is to prevent this from happening again especially if gold goes up a lot and those of us fortunate enough to have some look like the bad guys because we had the foresight to protect ourselves? Scary thought but when I read those words, I can't help but think that history has a way of repeating itself......

jpkinla

< Executive Order: By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists; That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.
"Therefore, pursuant to the above authority, I hereby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed, pending action in the due course of the law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are hereby prohibited.
"Your possession of these proscribed metals and/or your maintenance of a safe-deposit box to store them is known to the Government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of The Internal Revenue Service.
"By lawful Order given this day, the President of the United States."

Newb

From my cold, dead hands.....

solid

I believe that coins with special "numismatic value" were exempt from the action. I don't know that the order specifically
defined which coins could be called numismatic, but have seen loose definations that a coin valued at 15% above it's
bullion value could qualify.

Newb

That the continued private hoarding of gold and silver by subjects of the United States...


WTF?? I know that was a long time ago, but dayummm....that's scary.

relicsncoins

If I remember correctly, that order wasn't repealed until Nixon was in office.

JJ

Elcontador

Can the 1933 confiscation occur again?

I think the odds on this are about even with being eaten by a chupacabra or getting married to someone forty years older than you are.

WoodenJefferson

We (the US) wern't the only country to go off the Gold Standard. It was strictly a voluntary order to surrender your gold coins...no one came after you or held a gun to your head. As patriotic citizens many surrendered their gold coins, some did not.

From 1931 through 1936 nations left the gold standard, beginning with Britain in 1931 after a run on the pound. France, the Netherlands and Switzerland finally left the gold standard in 1936.

Other nations suspended convertibility, prohibited exportation of gold, and required taxes be paid in gold. When France went off the gold standard in 1936, it ordered its citizens to turn in their privately held gold for government notes, but attained very little compliance

Jewelry, private coin collections, and the like were exempt from this ban, which in any case seems not to have been enforced too zealously. In 1975 all restrictions on the right of American citizens to own gold were abolished.

Coinosaurus

<< <i>I believe that coins with special "numismatic value" were exempt from the action. I don't know that the order specifically
defined which coins could be called numismatic, but have seen loose definations that a coin valued at 15% above it's
bullion value could qualify. >>



I believe the legal wordage was something like "of recognized value to collectors of rare coins on April 5, 1933", or some such. There was actually a series of orders which clarified the action.

But in reality, the enforcement was all over the place. The Secret Service were not coin collectors and didn't know what was numismatically important or not (strange as that seems to us erudite numismatists). So you have a lot of cases where a Secret Service agent shows up on someone's doorstep (typically after a relative with gold coins dies) and strongarms them into "redeeming" numismatically important gold for its face value in currency. Conversely, there were cases where the gold was clearly worth only melt value, was publicly traded for melt value, and the Secret Service did not step in even though such an action would have legal. So its never been entirely clear to me why the SS specifically went after the 1933 $20s (and did not go after all the other cladestintely created delicacies). Frankel did the best job of explaining it in her book, but the reality is that the SS was inconsistent in its enforcement of the gold recall.

As for whether it could happen today? I doubt it. A gold recall only works once, when you go from a specie to a fiat basis. Once you are on a fiat basis, what's the point?

bluespaceant

Clearly the anwer is NO, because it will never again be 1933. We could have a 2007 confiscation though. In fact, if they work quickly there is still enough time to squeeze in a 2006 confiscation.

Higashiyama

I agree with elcontador.

Gold will not be confiscated again, for many reasons, including:


(a) Gold no longer figures prominently in the monetary policy of the United States

(b) There is very little risk in today's economy of a mass attempt to convert electronic stores of wealth into gold; material buying of gold could occur, sending the price of gold soaring, but this would be a drop in the bucket compared to the wealth of our society

(c) The Federal government has been encouraging the ownership of gold through bullion coin sales. It would be very hard politically to change course.

(d) If they tried, the public would not cooperate; only a small portion of outstanding gold would be surrendered.

D

<< <i>Can the 1933 confiscation occur again?

I think the odds on this are about even with being eaten by a chupacabra or getting married to someone forty years older than you are. >>



That depends entirely on where you live!

-D

Sunnywood

I think the odds on this are about even with being eaten by a chupacabra or getting married to someone forty years older than you are.

El Contador, actually the odds of getting married to someone forty (or more) years older than you are significantly higher than the odds of getting eaten by a chupacabra !!!! Look at Anna Nicole Smith, for example ... she was married to someone at least 40 years older than she, but to my knowledge she has not yet been eaten by a chupacabra

Since the founding of the Federal Reserve Bank in 1914, the dollar has lost well over 90% of its purchasing power. By contrast, one ounce of gold has not.

Anything is possible, including a future attempt by the U.S. government to increase its stores of the metal dramatically. But we now have orderly global commodities markets, and the way in which policies are formulated has changed ... I believe there would be considerable political resistnace to such a move. However, if the dollar continues on its present course of extending its 92-year slide towards worthlessness, anything is possible ...

Sunnywood

WoodenJefferson

<< <i>Can the 1933 confiscation occur again?

I think the odds on this are about even with being eaten by a chupacabra or getting married to someone forty years older than you are. >>



Anna Nicole Smith
born: nov 28 1967

J. Howard Marshall
born: Jan 24, 1905

She was 27 he was 89!

62 years her elder!!!!

lloydmincy

If Gold continues to increase in value, the U.S. Mint will try to sell as much as it can to all the suckers/lemmings to make huge profits for the gov before it backs down again.

<<because we had the foresight to protect ourselves?>>

Protect yourselves?? What do you need to protect yourselves from, the second great flood???

let me know when you buy gas with a gold bar, and get change back.

BTW, my net worth (and many others) has skyrocketed the past 4 years because of... Stocks. Everything in the past four years has skyrocketed, including real estate. Gold is just one of them.

Isn't it safe to say the government would ban gold ownership before paper money ownership??? Youknow the big guys will not let the dollar lose all its value. Keep hoarding your gold - just don't be without a chair when the music stops.

Artist

My grandmother told me that she used to receive gold coins every birthday and Christmas. In 1933 she turned them because she feared that they would not be worth anything at all in the near future. To provide an analogy, what if the government said that we all needed to turn in our paper bills except for those that possessed collector value because beyond a certain date they would no longer be backed as currancy - wouldn't most of you comply?

On an aside, whie NONE of my grandmother's coins survived the recall of 1933, it has been fun to build my collection and share it with her. In her honor, I assembled a 1914-D gold set - 1914 was the year she was born, and D is the first letter of her last name. It was wonderful to share this set with her and witness the wave of recognition and nostolgia that came over her face.

291fifth

An attempt could be made.

Some believe that Roosevelt's initial order was influenced by his rejection for one of the secret societies at his ivy league college many years earlier. It was a way to insure that the very rich were not able to profit from their ownership of gold-backed bonds. The coins were probably an afterthought.

The current day wealthy, many of whom see themselves as entitled (a new aristocracy,) may very well be laying the groundwork for something in the nature of the gold confiscation in the future. The gross overcompensation of corporate executives and board members is generating simmering resentment among the general working population. Don't rule out anything.

SportsModerator

Let's not forget that Roosevelt following this act of theft from the American people, revalued the official price of gold by about 30-40%.

Hugegut

Of course it's possible. The government can do anything it wants. All the president has to do is say that you're an enemy combatant and off you go forever with no charges or legal recourse. Millions of Americans aren't allowed to vote even though it's the pillar our our "democracy". Millions or people can't have guns despite it being a constitutional right - just ask your friends in DC or Chicago. People's right to free speech is tossed in the trash on a daily basis by low-level flunky judges who issue gag orders, and by having to get a "permit" to have a demonstration. Your property rights are worthless because your town can confiscate your land and give it to Walmart any time they want. Sheesh... in WW2 they rounded up US citizens and put them in internment camps right here in the good ol' USA. Why would it be so far-fetched to take your gold away?

PerryHall

<< <i>Let's not forget that Roosevelt following this act of theft from the American people, revalued the official price of gold by about 30-40%. >>



Revalued from $20.67 to $35.00 or about 70%.

SportsModerator

<< <i>

<< <i>Let's not forget that Roosevelt following this act of theft from the American people, revalued the official price of gold by about 30-40%. >>



Revalued from $20.67 to $35.00 or about 70%. >>



Mathematics was never my strong suit,

roadrunner

FDR instituted an overnight 40% devaluation of the US dollar by adjusting the gold price. A pretty neat and nasty trick. Those holding FRN's and dollar denominated stocks and related assets lost their shirts as well.

Concur with Sunnywood. Anything can happen. It wasn't the nation that FDR feared was in peril, but the fate of the FED's FRN. And today, if that FRN is at any time being threatened by extinction, all bets are off, including gold ownership. OK, so if the crap hits the fans what are people gonna load up on that is not linked to the dollar? Either that's assets denominated in more stable foreign currencies or physical assets (oil, timber, land, PM's, food stocks,
industrial metals, etc.). How many people will be able to store 100 lb sacks of grain in their basement before exceeding $10,000 in value? Anyone have a 10,000 gallon oil tank in their back yard?
(well, I know Sinclair does but he's not Joe Average).
Gold and silver, as well as platinum and other metals are concentrated and very portable forms of wealth.

BTW, my net worth (and many others) has skyrocketed the past 4 years because of... Stocks. Everything in the past four years has skyrocketed, including real estate. Gold is just one of them.

Considering that 40% of the so-called "gains" in the stock market over the past 4 years are merely from the dollar dropping 40% in value, I'd like to see what your real gain was in constant 2001 dollars. While yourself and "many others" might make up 1-5% of the population, I'd suggest that well over 90% of Americans who own stock (esp via 401k's) have broke even or lost money by being in multiple standard growth funds. The top 5% are not representative of the sheeple.

Isn't it safe to say the government would ban gold ownership before paper money ownership??? Youknow the big guys will not let the dollar lose all its value. Keep hoarding your gold - just don't be without a chair when the music stops.

The big guys (Fed, Treasury and their cohorts) will have no say in the dollar finally tanking, which of course it must do as the fate of every fiat currency is the same: extinction. The Fed's ammo to date has been to have it's GS & JPM's and friendly CB's sell gold into the market for the past 15 years. At this point the ammo is about depleted. The remaining gold is going to stay with the CB's that have it. They need it for their own protection. If gold is so worthless why the Chinese intent on increasing their stores from 1% to 20% or more? I have no doubt that a large portion of USA gold is long since "leased out" while being used to strengthen the dollar along the way. Of course leased gold is carried on the books as an "asset" even though it's not. There's no way to really know who has the gold and how much. The accounting scams are similar to Enron's. The only ammo left is with real guns and tanks and diplomatic persuasion. And that doesn't seem to be working so well. One needs a strong currency and real assets to wage wars.

Just ask the Romans, English, French, Spaniards how their currencies faired following the decline of their empires. The "real" big guys are the money behind the FED. They don't have all their wealth in paper notes but spread out all across the world in properties, buildings, companies, foreign currencies, etc. The declining US dollar has been their conduit to transfer the world's wealth to them. The more it declined (now up to 95%), the more they make. When the FRN conduit is sunk, they will have completed their mission. Another conduit will then by found to continue the play. It may even be gold. Even as we speak I'd bet the powers to be are accumulating all the gold, oil, and natural resources they can. When the FRN tanks, they will be well protected, but not so Joe Public. When the music stops again, if you aren't in physical rather than paper assets and notes, good luck. Gold has always held strong when the music stopped, not so paper assets. In the early 1930's those who kept their gold did ok. Homestake Mining company stock (now leader Newmont gold) went up by 6X in that period.

If we can create a dept of Homeland Security with the Patriot Act, then gold confiscation would be a snap during the next similar crisis.
Congress will go along with anything not to be labeled as "unpatriotic." Since PA2 came out, assets that derive at least 50% of their value from intrinsic worth (gold coins for example) are now considered "bullion." Forget the 15% "thumb rule" the IRS has suggested for years. The PA2 just tossed 50% out there for law enforcement to latch on to. Your MS64 Saint is now considered bullion to HSO. And if confiscation occurs again, the precedent has been sent to take away your Saint as bullion. Even if you don't want to turn it in, imagine how much harder it would become to sell such a coin to your local or national dealer.

None of us knows how things will play out down the road. I'm not naive enough to think that things just cannot happen. I don't plan on gold confiscation at this point, but should things start to shift, maybe I'll look at silver or platinum or Beannie Babies. When good people sit back and do nothing and allow elected officials to run wild, sh!t happens. Hey, it got us the FED in 1913.

roadrunner

Jcarney

<< <i>sending the price of gold soaring, but this would be a drop in the bucket compared to the wealth of our society >>



And this is the key. The entire gold market is but a tiny fraction of the overall economy. There would be absolutely no reason to confiscate gold.

roadrunner

As an estimate, say world-wide gold "backs" about 1% of the currency floating around. This is certainly a drop in the bucket or almost negligible. The same is true of bank backed assets. They are only required to carry 1% cash to cover their loans.

Now if the above drop in the bucket of 1% gold is so meaningless, why do the CB's, major financiers, and others go to such great lengths to play in and track this market. Even the president's ESF and PPT play in the "drop in the bucket" gold market to effect control of currencies and other markets.

Just because we have printed tens of trillions of paper money around the world, and created $300 trillion in derivatives out of thin air, doesn't mean that the world's gold stocks are less meaningfull today because we've inflated the heck out of everything else.
If it's so meaningless, why don't the Central Banks just empty out their coffers and sell it all? This way we won't have to wonder who has the gold and who doesn't. In fact, I'd bet the US turns out to be one of the countries that doesn't have the gold they claim. No secret that we haven't physically audited the stocks since the 1950's. Our current gold "audits" are merely paper excercises by third parties who inspect the Treasury's "paperwork" and then sign off on it. Now why don't Mr. Sarbannes and Mr. Oxley do something about that! Our own govt, if held to SOX compliance, would be in jail by morning.

roadrunner

Higashiyama

Roadtunner -- we may need to agree to disagree on a few things :


"FDR instituted an overnight 40% devaluation of the US dollar by adjusting the gold price. A pretty neat and nasty trick. Those holding FRN's and dollar denominated stocks and related assets lost their shirts as well. "

This may have been a nasty trick to some, but not for the vast majority of Americans, who saw no material change in wealth or purchasing power as a result of the change in gold price. They were happy to own dollar denominated assets, and didn't particularly care about foreign exchange.

"If we can create a dept of Homeland Security with the Patriot Act, then gold confiscation would be a snap during the next similar crisis."

Two points -- (a) although possible, I think it is highly unlikely that the Federal government would want to confiscate gold -- gold is just not much of a player in today's economy, and (b) people are passive as long as the Patriot Act does not materially affect them, that is, as long as the act is a nuissance but does not materially restrict the freedom of a large number of Americans. The minute our elected representatives move beyond this, these elected representatives will be out of a job.

"Just ask the Romans, English, French, Spaniards how their currencies faired following the decline of their empires"

It is a virtual certainty that our currency will decline against the Chinese renminbi, against gold, and against a few other currencies. However, the decline of our world position will not be as dramatic as those listed above. Our system is inherently strong, and has self-correcting mechanisms that will prevent a dramatic decline. Rather, the first half of 21st century will probably be the story of growth in China, growth among ASEAN nations, adjustment and maturation of the US/Japan relationship, renewal in the United States, and awkward adjustment in Europe. It is difficult to project how this will evolve -- the possibilities are all over the spectrum -- but there are certainly many potential positive outcomes.

Baley

The governMINT is going to a lot of trouble to SELL gold, silver, and platinum to the public in the form of "products"

Why would anyone think they'll try to take it back?

Higashiyama

Baley -- certainly they couldn't confiscate anything with a FIRST STRIKE designation.

roadrunner

Higashiyama,

Really, I think we pretty much agree on all points. Always nice to hear from you. With the average American broke during the great depression, it's a fair point that nothing really affected him or her.
But I still take offense at the trick of confiscating the gold, or at least making the effort to, and THEN devaluationg the dollar by raising the price of gold. Isn't this akin to carney tricksterism (sorry if I might have offended any carneys in the process).

While I agree that confiscation is not the likely scenario, I cannot rule it out. I never would have thought that HSO or PA2 would have ever come about either. I'd say the same thing when a national ID system is finally crammed down our throats.

Even if the mint is selling gold products (mainly to compete against the rest of the world's products) it doesn't mean that they cannot stop. If gold gets to $1000-1500/oz will the mint still be pumping these things out if the public stops buying them?

The govt won't have any say in what happens with gold products in the future. There is already a bill in congress that wants to shift control of the mint and the BEP to the FED. Yes, the FED is aiming to get ALL controls of our monetary system. They'll have everything but the keys to Fort Knox (and we probably don't own that gold anyways....the FED may have directed the Treasury to sell much of that over the past 10 years). It won't even matter what you, I or the govt wants, as the FED is beholding to no one except its backers. Talk about a triple crown win for the FED if this clunker goes through congress. And it's labeled as a coinage act to try and get rid of the penny. A Trojan horse if you ask me.

roadrunner

CaptHenway

As to how zealously the Treasury went after gold in 1933, I once spent a half hour with Abe Kosoff talking about the coin market during the Depression. As to gold, he said that he worked for a firm that brokered many bags of U.S. $20's to clients who wanted them shipped to banks in Switzerland. His firm would pick up the bags from a bank in New York and arrange the shipping.

Several months after the gold surrender act, two Treasury agents showed up at his firm with copies of withdrawal records from the bank where they were getting the gold. They said something to the effect of: "You withdrew X dollars worth of gold in (the six months prior to the act). We want it back." The firm notified the clients in question, and some had the gold sent back from Switzerland, some did not. Abe said that the firm was very worried for a while that the Treasury was going to hold them responsible for the stuff that did not come back. In the long run nothing happened to them.

TD

RichieURich

<< <i>That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people. >>



The above sentence is the justification for the confiscation in 1933. I'm amazed, not having seen this language before, at the flimsiness of this justification: "a grave threat to the peace, equal justice, and well-being of the United States". What? This justifies stealing** the gold from the few people who owned it?
** Definition of "Stealing" = paying $20.67 and revaluing it at $35.

Yes, it could happen again. The government has gotten so large that it can take anything it wants from anyone, and there is no way to prevent this from happening.

roadrunner

The real threat to the USA's security and safety was the FED itself, or aka the true engine of inflation. Outlawing gold in 1933 sacrificed the longterm safety and security of the American people.

roadrunner

DaveG

If you're interested in reading some of the background to the 1933 revaluation of the dollar, there's a nice summary in "Illegal Tender", David Tripp's book about the 1933 double eagle.

RR

I highly recommend the following book on the creation of the fed reserve. Describes the background and related world influences, monetary factors, some history on banking, etc.:

"The Creature from Jekyll Island" by G. Edward Griffin

RR

jpkinla

Just the thought of this is scary!

WillieBoyd2

If Prohibition comes back then bury your gold!

PerryHall

<< <i>If Prohibition comes back then bury your gold! >>



The government has its hands full controlling the drug trade so I wouldn't be too worried.

Gemineye

There is an easier way for the Govt to confiscate gold...Exchange it for another metal...It would take apprx 5 years for the Govt to exchange your gold for their .."Trickemite"..
After your exchange you cannot open your package (like the TPGs)..until the complete cutoff date.Sort of like a die pack in a robbery would happen if you did.Then low and behold the Govt got your gold...!!!...........

RWB

The Hoover Administration had required all commercial banks to keep a record of withdrawals of gold coin beginning in mid-1932. The gold surrender order, extended Bank Holidays and several other actions relating to gold and national finance were on Hoover's "To Do" list before the 1932 election but he never had enough backing from Congress to issue the orders.

The first gold order was based on a WW-1 era law that had also allowed the Treasury to require all sales of silver in 1919-1920 to be reported to the government and subject to audit.

Note also that the 1934 Silver Purchase Act, which nationalized domestic silver, required all US mining companies to sell their sliver to the government. Interestingly, the gov't paid 1/3 more than the commercial rate for silver - thus propping up many western states' economies, while producing a huge stockpile of silver that eventually came in handy.

Bear

Just about the time most folks conclude, that the Government

cant or wont do it again, figuere that they can and will.

majorbigtime

I remember when it was illegal to own gold--and yet it was all over the place!!

fishcooker

The most likely scenario is that the IRS/HSO will monitor and regulate all sales. Essentially, it won't be illegal to own gold, but you can't sell it without their clearance and knowledge. This will allow them to tax all financial transactions, not just the ones friendly folks decide to report. Think you can deposit $1000 cash into your bank account? Not without identifying the source and paying income tax on it! Should be a fantastic boon to the government, as all of the folks reporting falsely low incomes will begin paying taxes (and maybe stop getting handouts, too).

WoodenJefferson

FDR link

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

Easier to read than the Act itself.
Not to resurrect an old thread, ran across this web page and thought it to be useful and understandable.

Connecticoin

<< <i>I believe that coins with special "numismatic value" were exempt from the action. I don't know that the order specifically
defined which coins could be called numismatic, but have seen loose definations that a coin valued at 15% above it's
bullion value could qualify. >>



How come we have so many 1924 Saints then?