RWB-Question re legality of gold before 1974
CaptHenway
Posts: 31,997 ✭✭✭✭✭
The gold surrender act did make provisions for people to keep a few gold coins legally. Let's say that your Aunt Minnie had been given a $5 gold piece upon her birth in 1927, and her parents just kept it with her baby book. The government certainly did not care about this coin.
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Now, let's say it is 1948 and Minnie takes the coin down to the liquor store on her 21st birthday and spends the coin on a bottle of Old Panther Sweat. Did the storekeeper have a legal obligation to surrender the gold coin to the government? We will ignore the fact that it wasn't going to happen. Did the obligation to surrender the gold coin still exist?
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TD
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Now, let's say it is 1948 and Minnie takes the coin down to the liquor store on her 21st birthday and spends the coin on a bottle of Old Panther Sweat. Did the storekeeper have a legal obligation to surrender the gold coin to the government? We will ignore the fact that it wasn't going to happen. Did the obligation to surrender the gold coin still exist?
.
TD
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
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I knew it would happen.
$200 face in gold coin .......... so ......... I guess that as long as the
whiskey drummer did not have more than $200 face .........
********************
Silver is the mortar that binds the bricks of loyalty.
<< <i>No more or less than Minnie, and if they were both coin collectors, then they were "golden" -- so to speak. But she should check the date... >>
It's sort of like the AT/NT question - if it happens intentionally it is bad, otherwise it is all good.
In one case, a local Secret Service guy wanted to go after someone for being a "speculator" as opposed to being a "collector." But unless you have a repeated pattern of behvaior (which he did not), how do you prove intention? The guy was in fact probably a speculator, but he knew all the right words to make it look like he was collector.
I sure hope RWB's book explains the "4 quarter eagles" clause. For some reason it was OK to have up to 4 of one date, but not more. Why four? Did they just pull that number out of the same place that most of the rules came from??
<< <i>No more or less than Minnie, and if they were both coin collectors, then they were "golden" -- so to speak. But she should check the date... >>
OK, as I expected.
Now, let's say that the liquor store owner happens, by extreme good luck, to accumulate a quantity of gold coins over time from various customers. These are not collectible coins, just common circ. $5's and $10's and $20's. When his total hit, say, $105 (or any other relevant number), did an obligation to surrender the coins come into existence?
I ask this because back in the 1960's, when my Dad was working for a home delivery service in Detroit, one of his fellow drivers had a customer (the proverbial little old lady) who used to give the driver a $5 gold piece every now and then when her bill got too high. The driver (I knew him; he was a real jerk) would only give her $5 credit for it, and then sell it at a coin shop for its gold value ($10 or so).
I know he was not going to surrender it, and that by the 1960's the regulations had changed, but in my 1948 hypothesis above did the legal obligation to surrender a gold hoard above a certain value still exist?
TD
(I await your book that will explain all of this.)
<< <i>
<< <i>No more or less than Minnie, and if they were both coin collectors, then they were "golden" -- so to speak. But she should check the date... >>
It's sort of like the AT/NT question - if it happens intentionally it is bad, otherwise it is all good.
In one case, a local Secret Service guy wanted to go after someone for being a "speculator" as opposed to being a "collector." But unless you have a repeated pattern of behvaior (which he did not), how do you prove intention? The guy was in fact probably a speculator, but he knew all the right words to make it look like he was collector.
I sure hope RWB's book explains the "4 quarter eagles" clause. For some reason it was OK to have up to 4 of one date, but not more. Why four? Did they just pull that number out of the same place that most of the rules came from?? >>
4 quarters = a whole?
60 years into this hobby and I'm still working on my Lincoln set!
I'm saving that "mystery" for the book after the next!.... Seriously, I have no idea why.
The $100 in gold exemption was dropped later in 1933. As for the second scenario, the coin collector exemption still applies - condition of the coins was irrelevant.
Since nobody was checking on anyone except hoarders, the government didn't pay any attention to individuals unless someone complained - usually a jealous neighbor or family member. (Checking on hoarders mostly stopped by 1934.)
<< <i>I sorta remember that the law stated that a person could keep
$200 face in gold coin .......... so ......... I guess that as long as the
whiskey drummer did not have more than $200 face ......... >>
According to the first edition of the Red Book and for a number of Red Books after that, citizens were allowed to hold gold coins without a treasury license that had a recognized value to collectors that were rare and unusual.
BUT
NOT including quarter eagles otherwise known as $2.50 gold pieces. UNLESS held with a collection of rare and unusual coins with historic, scientific numismatic purposes. Even in that the context the holding of quarter eagles was limited to four coins of same date and design and struck by the same mint.
So why were the quarter eagles singled out as potential troublemakers? A dealer I knew back in Boston claimed that it was because the government didn’t want the Chinese-Americans to hold very many gold coins. Anti-Chinese attitudes were certainly a part of the American scene for a long time, especially in the 19th century, but I was not aware that it extended into the 1940s. The Chinese were our allies during World War II.
<< <i>Quarter eagles were discontinued in 1930, so they were an obsolete denomination by 1933-34. >>
Is it possible there was an adequate supply and demand dropped after 1929 due to the depression so the mint decided there was no need to mint any more? The mint stopped making quarter eagles between 1915 and 1925. Was it an obsolete denomination during those years?
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Just judging from the sheer number of non-modern gold on the market today, I'd say most people held on to what they had - even when they were supposed to be surrendering it. >>
This discounts the huge quantities held in Europe.
Another question based on this. Since many foreign countries kept balances at the NY sub-treasury, was this kept in volumes of US gold coins or was it required to be melted? Or did NY sub-T not store these deposits until some later date
<< <i>
<< <i>Quarter eagles were discontinued in 1930, so they were an obsolete denomination by 1933-34. >>
Is it possible there was an adequate supply and demand dropped after 1929 due to the depression so the mint decided there was no need to mint any more? The mint stopped making quarter eagles between 1915 and 1925. Was it an obsolete denomination during those years? >>
I think there was a deliberate decision in 1929 to not make $2-1/2 and $5 gold coins anymore, which made them obsolete even though they continued to circulate to some extent. The Mint stopped making silver dollars in 1904 and 1928 and 1935, but never excluded the possibility of resuming production.
There was a similar situation with the red seal United States Notes. There was a deliberate decision to discontinue the $1 note after the 1928 Series, while continuing to make the $2 and the $5. Those denominations were discontinued after the 1963 Series, while a new Series 1966 $100 replaced them in circulation. Thus the red seal $1, $2 and $5 are all obsolete, though still legal tender and spendable.
TD
<< <i>The Mint stopped making silver dollars in 1904 and 1928 and 1935, but never excluded the possibility of resuming production. >>
At least for silver dollars there was a short answer to that one. The mint had millions of silver dollars in the vaults, and no one wanted them. The coins where struck for political reasons, not the needs of the economy.
I suspect that the $2.50 and $5.00 coins were not needed because the economy was on its back, and those who used them for gifts and like were not giving them out as much as they had before the crash 1929. Businesses used the $10.00 and $20.00 for large transactions so the mint continued to strike those inspite of the fact that they ended up in vaults and were mostly melted after the Gold Surrender order of 1933.
I'm still wondering why the Feds were so concered about restricting the number of quarter eagles on collector could put aside.
<< <i>
<< <i>
<< <i>Quarter eagles were discontinued in 1930, so they were an obsolete denomination by 1933-34. >>
Is it possible there was an adequate supply and demand dropped after 1929 due to the depression so the mint decided there was no need to mint any more? The mint stopped making quarter eagles between 1915 and 1925. Was it an obsolete denomination during those years? >>
I think there was a deliberate decision in 1929 to not make $2-1/2 and $5 gold coins anymore, which made them obsolete even though they continued to circulate to some extent. The Mint stopped making silver dollars in 1904 and 1928 and 1935, but never excluded the possibility of resuming production.
There was a similar situation with the red seal United States Notes. There was a deliberate decision to discontinue the $1 note after the 1928 Series, while continuing to make the $2 and the $5. Those denominations were discontinued after the 1963 Series, while a new Series 1966 $100 replaced them in circulation. Thus the red seal $1, $2 and $5 are all obsolete, though still legal tender and spendable.
TD >>
Is there any documentation that there was a deliberate decision on the part of the government to stop making quarter eagles? Also, if these coins became obsolete after 1929, wouldn't the government have started withdrawing them from circulation? I'm unaware of this happening until the gold recall which affected all gold coin denominations.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Silver dollar productionwas stopped in 1904 because there was no more bullion left to coin and no provision to purchase any, until the Pittman Act of 1918. Silver bullion purchases had been suspended in 1893.
The same condition caused the halt of silver dollar production in 1928.
1935 was an exception. Silver dollar production could have continnued into 1936 and even later at the descretion of the executive branch.
This discounts the huge quantities held in Europe.
Another question based on this. Since many foreign countries kept balances at the NY sub-treasury, was this kept in volumes of US gold coins or was it required to be melted? Or did NY sub-T not store these deposits until some later date.
Most earmarked gold in NY was in bar form. Quantities of US gold coins actually held in Europe were never huge – the process was to melt them as soon as possible. (Swiss bankers liked to shake the $20s in a bag, then empty the coins and sell them at or above face value to hoarders. The gold flakes and dust from the bags provided a tidy extra profit and the hoarders actually got less gold than they paid for.) Certified gold bars were preferred to coins. (European hoarders bought about $1 million per month in US $10 and $20 beginning in 1932.)
Between 1920 and 1933 the US made about $1.1 billion in gold coins and exported about $1 billion. This left Treasury with about the same quantity of gold that it had at the beginning of 1920.
[PS: The rest of all of this story will be in the next book covering 1929-1946.]
Here is a case history for you. In 1947 somebody turned in a nice 1906 D five dollar gold piece to a local savings bank for $5. My friendly teller calls me and says management approves giving it to me for $5 since I am a collector. I have often wondered if that was comepletely kosher. By law a member of the Federal Reserve System would have to turn it in, in that period.
<< <i>Quarter eagles were discontinued by the Act of April 11, 1930. So they were obsolete after that. >>
Thanks. That's what I was looking for.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i><<Now, let's say it is 1948 and Minnie takes the coin down to the liquor store on her 21st birthday and spends the coin on a bottle of Old Panther Sweat. Did the storekeeper have a legal obligation to surrender the gold coin to the government? We will ignore the fact that it wasn't going to happen. Did the obligation to surrender the gold coin still exist?>>
Here is a case history for you. In 1947 somebody turned in a nice 1906 D five dollar gold piece to a local savings bank for $5. My friendly teller calls me and says management approves giving it to me for $5 since I am a collector. I have often wondered if that was comepletely kosher. By law a member of the Federal Reserve System would have to turn it in, in that period. >>
Hey, it saved them some paperwork and shipping costs. A true win-win situation for you and them.
TD
It was this way legally, until the Treasury Dept. laws of 1933 were first amended in July of 1954.
However, by 1937 or thereabouts, gold coins with "numismatic value" began appearing once again in numismatic auction sales. The only confiscated pieces (begining in 1944, by the U.S. Treasury Dept) were the 1933 Double Eagles.
<< <i>We should thank newly appointed Treasury Secretary (and long time numismatist) William H. Woodin for including the quarter eagle clause, or all gold coins would have been subject to confiscation (and or fines/jail).
>>
Was Woodin a quarter eagle specialist
>>
Don't be too hasty here. The December 28, 1933 (Woodin's term ended Dec 31) order allowed gold coins to be collected except no quarter eagles at all. On Jan 13, 1934, the new secretary, Henry Morgenthau, Jr. allowed 4 quarter eagles of each design, date and mint to be held as part of a collection.
Morgenthau had been appointed as acting Secretary of the Treasury since October of 1933, and had been given authority from President Roosevelt to carry out Treasury Dept. business since that time. He was officially sworn in on January 1, 1934. The four quarter eagle clause of January 1934, was not from Woodin...and (in all probability) came from Roosevelt, as he was extremely paranoid about controlling the gold in the United States. Woodin's 1933 wording had no limits and since he was no longer in office, President Franklin "recommended" the arbitrary limit the following year. There had been a Cabinet meeting on Friday, January 12th, where Roosevelt outlined his proposals to take over, by the United States Treasury, of all gold in the reserve banks, etc.
The December 1933 Order mentioned was, in reality, a supplement to the August 28th Order (6260) that Roosevelt had signed months before. Intriquingly, the August 28th order revoked the earlier Acts from April 5th and 20th of 1933. The U.S. government in 1933 (aka: Franklin Delano Roosevelt) created a real mess!
Woodin, who was the purchaser of the two $50 gold 1877 Half Unions in 1909 (from John Haseltine) had begun collecting U.S. gold coinage in the late 1800's. He began this activity after J. Colvin Randall (longtime Phildelphia numismatist and one time friend of Haseltine) advised him to do so.
Much of Woodin's gold coin collection ended up with "Col." Edward Howland Robinson Green in the 1920's.
Also, was this signed by FDR or someone else?
Also, was this signed by FDR or someone else?>>
I have found my copies of the Dec. 28, 1933 and Jan 11 and 15, 1934 orders.
The first one was signed H. Morgenthau, Jr., Acting Secretary of the Treasury. Approved Franklin D. Roosevelt Dec 28, 1933
The second was signed H. Morgenthau, Jr., Secretary of the Treasury. Approved Franklin D. Roosevelt Jan 11, 1934 It only dealt with the quarter eagle changes.
The third one repeats the first two and sets a deadline.
The content is as per my previous post. I don't have time to quote it at the moment but will get back to tonight.
On Nov 16, 1933 the United States District Court in New York ruled that the gold surrender order of August 28, 1933 was illegal since President Roosevelt signed it rather than the Secretary of the treasury. Thus the acting secretary of the treasury issued a 4 page order on Dec 28, 1933.
By Order of the Secretary of the Treasury, H. Morgenthau, Jr. and approved by Franklin D. Roosevelt on December 28, 1933, all gold coin, gold bullion and gold certificates were required to be delivered to the Treasurer of the US (through the FRB's or member banks).
Page 2 states:
NOW, THEREFORE, I, HENRY MORGENTHAU, JR, ACTING SECRETARY of the TREASURY, do hereby require every person subject to the jurisdiction of the United States forthwith to pay and deliver to the Treasurer of the United States all gold coin, gold bullion, and gold certificates situated in the United States, owned by such person, except as follows:
Then follows paragraphs A thu E.
Paragraph B states:
B. Gold coin having a recognized special value to collectors of rare and unusual coin (but not including quarter eagles, otherwise known as $2.50 pieces);
[Note - it is the coins (with the exception of quarter eagles that are exempt,) not whether you are a collector or not.]
Under order of January 11, 1934 this was amended as follows:
NOW, THEREFORE, I, HENRY MORGENTHAU, JR., SECRETARY of the TREASURY, do hereby amend said order of December 28,1933 by inserting after after the word "pieces" in the parenthetical phrase in Paragraph (B) of the first section thereof a comma and the following:
"unless held, together with rare and unusual coin, as part of a collection for historical, scientific, or numismatic purposes, containing not more than four quarter eagles of the same date and design, and struck by the same mint."
This order may be modified or revoked at any time.
The Jan 15, 1934 order repeats this information but sets a deadline of midnight, Wednesday, January 17, 1934 to turn it in.