Gold Ownership Regulations Limited Collectors’ Choices in the 1960s
BillJones
Posts: 34,812 ✭✭✭✭✭
**This was an experiment to see if I could post an article here. I can post small pieces at a time. I can't put spaces between the paragraphs. Sorry, but this is the best I can do. **
Recently I ran across a 1967 issue of the Numismatic Scrapbook magazine in my files. The magazine was a favorite among collectors from generations ago. It was published from 1935 to 1976. Ultimately it was “merged” with Coin World and eventually ceased to exist in any form to chagrin of some collectors.
Among the many ads, which contain thousands of coin prices from 50+ years ago (If we could only go back!), was an article that sounded a warning for dealers and collectors concerning gold. The article reminded dealers and collectors that they had to obtain a license from the Treasury Department before they could import any gold from abroad. The requirement for the license even applied to U.S. gold coins dated before 1933 which had been declared legal to own in prior rulings. Failure to obtain a license before the import transaction would result in confiscation of all of the gold.
These regulations stemmed from the Gold Surrender of 1933. President Franklin Roosevelt issued that executive order on April 5, 1933 to take control of the gold market. It was strengthened by two acts of Congress. The order required all citizens to turn in their gold coins and gold certificates for paper currency on or before May 1, 1933. Citizens were allowed to keep gold coins with a face value of up to $100. Exceptions were made for “customary use in industry, profession or art.” Those professions included artists, jewelers, dentists, sign makers and others who could show that gold was an essential part of their business. U.S. citizens were forbidden to hoard or invest in gold. They could not own gold and store it in a foreign country.
There was an exception for "gold coins having recognized special value to collectors of rare and unusual coins.” These included coins dated 1933 and before, although coins dated 1933 presented special problems. The gold eagles ($10 gold pieces) dated 1933 (“Coinfacts” Internet site estimate, 40 survivors) are legal to own, but subsequent court rulings have made all but one 1933 double eagle illegal to own. It is interesting to note that Louis Eliasberg, who assembled one of the most complete U.S. coin collections of all time, became a collector during this period.
Why did President Roosevelt take this bold action? The perception was that many people were hoarding gold coins and not spending them. Since the U.S. was on the Gold Standard, it limited the amount of money in active circulation which economists thought was stifling the economy during The Great Depression.
After Roosevelt confiscated the gold, he raised the price from $20.67 to $35.00 an ounce. That allowed the government issue more money and lowed the value of the dollar, which made U.S. exports cheaper and more attractive to foreign buyers. More exports increased the amount of goods produced. Both actions were directed to toward stimulating the U.S. economy and pulling the country out of the Great Depression.
These actions had two adverse results for coin collectors. First, many collectable gold coins were turned into the government and destroyed. Second, collectors were barred in subsequent years from acquiring many desirable foreign gold pieces which were dated after 1933. For example, American collectors could not own the 1937 George VI coronation gold set nor many other interesting or significant gold coins or medals that might have interested numismatists.
At the time when the 1967 Numismatic Scrapbook article was published, Canada was issuing a 100th anniversary commemorative Proof set that included a very attractive $20 gold coin. Like all other late date gold coins, U.S. collectors were forbidden to buy it. Canada issued a set for Americans that had a silver medal in place of the gold piece.
Coins magazine sent a photographer and a reporter to Canada take photographs of the coin. The reverse of the coin appeared on the cover of the June 1967 edition of the magazine. There was an article about the “forbidden fruit” that American collectors could not have.
Unfortunately the provisions of the Gold Surrender Order remained in effect for 40 years. Finally President Gerald Ford signed a bill into law that ended the restrictions on American gold ownership. The bill took effect on December 31, 1974. Since then collectors have been able to add any and all genuine gold pieces to their holdings.
So, what has happened to the 1967 Canadian $20 commemorative gold piece that was “forbidden fruit” for American collectors? Once the allure of owning a forbidden coin was gone, and the years passed by, the collector interest in the piece fell. Today it now sells for close to its melt value. Sometimes when something is no longer banned, it becomes mundane.
Comments
Here are some spaces for you.
Recently I ran across a 1967 issue of the Numismatic Scrapbook magazine in my files. The magazine was a favorite among collectors from generations ago. It was published from 1935 to 1976. Ultimately it was “merged” with Coin World and eventually ceased to exist in any form to chagrin of some collectors.
Among the many ads, which contain thousands of coin prices from 50+ years ago (If we could only go back!), was an article that sounded a warning for dealers and collectors concerning gold. The article reminded dealers and collectors that they had to obtain a license from the Treasury Department before they could import any gold from abroad. The requirement for the license even applied to U.S. gold coins dated before 1933 which had been declared legal to own in prior rulings. Failure to obtain a license before the import transaction would result in confiscation of all of the gold.
These regulations stemmed from the Gold Surrender of 1933. President Franklin Roosevelt issued that executive order on April 5, 1933 to take control of the gold market. It was strengthened by two acts of Congress. The order required all citizens to turn in their gold coins and gold certificates for paper currency on or before May 1, 1933. Citizens were allowed to keep gold coins with a face value of up to $100. Exceptions were made for “customary use in industry, profession or art.” Those professions included artists, jewelers, dentists, sign makers and others who could show that gold was an essential part of their business. U.S. citizens were forbidden to hoard or invest in gold. They could not own gold and store it in a foreign country.
There was an exception for "gold coins having recognized special value to collectors of rare and unusual coins.” These included coins dated 1933 and before, although coins dated 1933 presented special problems. The gold eagles ($10 gold pieces) dated 1933 (“Coinfacts” Internet site estimate, 40 survivors) are legal to own, but subsequent court rulings have made all but one 1933 double eagle illegal to own. It is interesting to note that Louis Eliasberg, who assembled one of the most complete U.S. coin collections of all time, became a collector during this period.
Why did President Roosevelt take this bold action? The perception was that many people were hoarding gold coins and not spending them. Since the U.S. was on the Gold Standard, it limited the amount of money in active circulation which economists thought was stifling the economy during The Great Depression.
After Roosevelt confiscated the gold, he raised the price from $20.67 to $35.00 an ounce. That allowed the government issue more money and lowed the value of the dollar, which made U.S. exports cheaper and more attractive to foreign buyers. More exports increased the amount of goods produced. Both actions were directed to toward stimulating the U.S. economy and pulling the country out of the Great Depression.
These actions had two adverse results for coin collectors. First, many collectable gold coins were turned into the government and destroyed. Second, collectors were barred in subsequent years from acquiring many desirable foreign gold pieces which were dated after 1933. For example, American collectors could not own the 1937 George VI coronation gold set nor many other interesting or significant gold coins or medals that might have interested numismatists.
At the time when the 1967 Numismatic Scrapbook article was published, Canada was issuing a 100th anniversary commemorative Proof set that included a very attractive $20 gold coin. Like all other late date gold coins, U.S. collectors were forbidden to buy it. Canada issued a set for Americans that had a silver medal in place of the gold piece.
Coins magazine sent a photographer and a reporter to Canada take photographs of the coin. The reverse of the coin appeared on the cover of the June 1967 edition of the magazine. There was an article about the “forbidden fruit” that American collectors could not have.
Unfortunately the provisions of the Gold Surrender Order remained in effect for 40 years. Finally President Gerald Ford signed a bill into law that ended the restrictions on American gold ownership. The bill took effect on December 31, 1974. Since then collectors have been able to add any and all genuine gold pieces to their holdings.
So, what has happened to the 1967 Canadian $20 commemorative gold piece that was “forbidden fruit” for American collectors? Once the allure of owning a forbidden coin was gone, and the years passed by, the collector interest in the piece fell. Today it now sells for close to its melt value. Sometimes when something is no longer banned, it becomes mundane.
I tried to post that but couldn’t.
I remember wanting one of those $20 gold coins from Canada at that time.
Great article! I was one of those people that wanted one of those Canadian 1967 $20 gold coins back then also. In fact, I still want one! I almost bought one last week! A woman that I went to school with was the first one in my area to purchase gold after it became legal to own again and there was an article in the local newspaper about it.
Personally, I never understood the ban or the need for it.
A lot of people turned in their gold coins. A lot of people kept them hidden. Who knows how many survive, just like silver coins. But you are right a ban makes people want them more. When they get unbanned, there is usually a serge for a short while and then the price goes down to where it should be.
There has been a ban (Embargo) on anything made in Cuba since 1962 including coins in the US. It's been 60 years, The Cuban missile crises is long over, and the Fidel Castro is gone. Yet the ban continues.
I recall going to local coin club meetings in the 60's and dealers having stacks of $20.00 gold pieces for sale. I think they were asking less than $100 at the time.
Yes, they were advertised in the coin publications for $49.95 for common dates. A basic question was, where they genuine? There was a very active counterfeiter in Lebanon at the time who was making counterfeit U.S. gold coins. They were made of gold, but they were not "of U.S. manufacture."
With gold officially priced at $35 an ounce, there was money to made from numismatic fakes. The gold dollar and the three dollar gold pieces were big favorites because their gold content was relatively low, but their numismatic value was high.
Here is the 1937 King George VI coronation set that I mentioned in my article. The coins have been "virtually mounted" in the set. One wonders if King Charles III will have something like this issued for his coronation. The issue price will probably be very high. The 5 pound gold piece is heavier than a U.S. $20 gold piece.
Bill, this reminds me of my paternal grandmother, who hid some gold coins in her safe deposit box. She kept some silver dollars as well, as she thought at some point, if they came after gold coins, they'd come after silver coins as well.
My father showed them to me when I was thirteen. Before he died, I asked him about them, and he said they were for my brother, sister and I. I went through them, kept a few of the nicer silver dollars, all of the gold, put them in airtites, distributed 1/3 to my brother, 1/3 to my sister, and kept the remaining third. They are now family heirlooms.
"Seu cabra da peste,
"Sou Mangueira......."
I was working in other countries from 68 to 74, and I was able to buy a couple of gold coins prior to the repeal of the act. Nothing of great importance, more an act of rebellion.
Cheers, RickO
I took a trip to Europe in 1968. Brought back a $5 and a $10 Indian. Purchased from a bank in Switzerland. Don"t remember the price. The teller showed me a 1 kilo gold bar and actually let me hold it.
Thanks for the education, I needed that!
Wayne
www.waynedriskillminiatures.com