The Great Confiscation: Gold ownership was illegal in the USA from 1933 to 1975

Have you heard of Roosevelt’s Emergency Banking Act on April 5^th 1933?

This was the date on which the American president declared that it was illegal for US citizens to own gold and ordered them to return their coins, ingots and gold certificates to the federal reserve banks before May 1^st 1933 at a price of 20.67 USD per ounce. Immediately devaluing the dollar by 40 percent; and setting the price of gold at $35.00 per ounce. At a single stroke, Roosevelt increased the government’s gold assets, stabilized the monetary system and increased wholesale prices by more than 33 percent. However, he also inflicted losses of 40 percent on gold owners and stripped them of the gold that they saved to insure their financial futures.

Government Confiscation of Gold.

1933 was the year when the great depression had led to a severe shortage of gold. Anxious Americans, demanding gold, had reduced the Federal Reserve’s gold supply almost to the legal minimum, creating additional fears of an impending monetary crisis. The 1933 Emergency Banking Relief Act was approved to ‘provide relief from the national emergency for the banking sector and for other purposes. On March 6 of 1933, the President set in motion a chain of events that ended the international gold standard once and for all. First, he closed the nation’s banks and prohibited them from paying out or exporting gold coins and bullion, using emergency powers granted by the Trading with the Enemy Act that had been enacted during World War I.

Times were very good for many Americans in the mid- to late-1920s. The stock market had grown exponentially and by 1929 had skyrocketed into an emotional frenzy of greed. In 1929, the frenzy stopped. Black Tuesday set off the stock market crash, which led to the Great Depression.

By 1933, the demoralized nation looked to Washington, D.C. and President Franklin D. Roosevelt for salvation. Roosevelt confiscated circulating gold coins owned by American citizens (all but $100 worth per individual) and then took the nation off the gold standard.

Almost all Americans were required to turn in their gold coins at face value under penalty of large fines and/or jail sentences. There were only a few exceptions, one being:

“gold coins having a recognized special value to collectors of rare and unusual coins.”

You can view the actual Executive Order and read the terms of confiscation by clicking on the picture to your left.

Below is the Executive Order that enabled Roosevelt to confiscate gold in 1933. Today the government still maintains that power through, Title 12, Chapter 2, Subchapter IV, Section 95a, which provides in part:
“During the time of war, the president may, through any agency that he may designate, and under such rules and regulations as he may prescribe, by means of instructions, licenses, or otherwise — (A) investigate, regulate, or prohibit, any transactions in foreign exchange, transfers of credit or payments between, by, though, or to any banking institution, and the importing, exporting, hoarding, melting, or earmarking of gold or silver coin or bullion, currency or securities. …”

Notice that coins or bills of numismatic value is not mentioned as was the case in 1933, in fact numismatic coins were excluded from confiscation in 1933. Many countries around the world have prohibited the holding of gold while allowing the ownership of numismatic coins. That is one reason that numismatic gold and silver coins have become such a popular form of ownership among U.S. citizens today.

To view the 1933 Executive Order.

After the gold was received, the government melted the majority of the coins. The government then raised gold’s value by nearly 75%. Rare coin collectors, as exempted by the confiscation actually profited from the confiscation, melting, and price revaluation in two important ways. Their coins gained value due to the:

1. Huge increase of the gold bullion value of their coins – the $20 Saint-Gaudens gold piece, for example, contains nearly a full ounce of pure gold.
2. Massive official melting of the confiscated gold coins. This melting made the limited number of surviving coins in collections much scarcer and more valuable.

These government actions helped President Roosevelt and Congress inflate the U.S. economy during the mid- and late-1930s. These actions also led to a loss of a number of important freedoms for the American people – freedoms from long-term inflation, expanding government, gold confiscation (except collectors), and government intrusion into their private financial matters.

From 1933 forward, private possession and ownership of gold was illegal for U.S. citizens. 

Any refusal to return one’s gold was punishable by a fine of 10,000 $ and 10 years in prison.  These exceptional measures were aimed at preventing the general public from storing gold. The solution was simple: make it illegal to directly own gold.

Even more significantly, American citizens lost the substantial benefit of having a dollar as good as gold when Roosevelt took the United States off the gold standard. Owning gold coins has protected savers from inflation, devaluation, and intrusive government for thousands of years. The events of the 1930s and the decades that followed prove the importance of owning scarce and desirable gold coins.

For protection and potential profit, wise Americans keep a portion of their long-term savings in the form of scarce and desirable coins. In 1934, Roosevelt proclaimed the confiscation of the gold held by the banks (Gold Reserve Act: in exchange for gold certificates that could not be exchanged for gold!)

This law remained active in the USA until 1975, a few years after the dollar’s value had stopped being linked to that of gold.

All of this failed to prevent Americans buying and selling gold on the black market especially gold in the form of nuggets which the law had forgotten. Of course, there were also all those Americans who knew all about gold and stored it in vaults in Switzerland: the reserves of wealth are immobile but the value that this wealth represents (currency) circulates.

Although private ownership of gold in the United States was legalized on August 15, 1974, the power to confiscate gold remains in the hands of the President. The President still retains the right, under the Emergency Banking Relief Act, to “investigate, regulate or prohibit… the importing, exporting, hoarding, melting or earmarking of gold” in times of a declared national emergency.

Minimal Enforcement and Voluntary Compliance: The Reality of the 1933 Gold Confiscation Order.

The Gold Confiscation Order (EO6102) was minimally enforced. While it mandated Americans to turn in their gold to the Federal Reserve, the enforcement did not involve active police seizures. Many citizens voluntarily complied out of trust, patriotism, or fear, but federal agents did not typically search for or seize gold. Compensation was provided in exchange for gold and gold certificates, which people accepted as they trusted the government.

Milton Friedman and Anna Jacobson Schwartz estimated that only 20 to 25 percent of privately held gold was actually turned in. This conclusion arose from discrepancies in official data suggesting the government had overestimated the amount of gold in private hands prior to the order. Economist David Henderson noted that the government revised its earlier estimates to account for the lower-than-expected returns rather than admitting to widespread non-compliance. Thus, a significant portion of gold remained in private hands despite the order.

The time to act is before, not after, a crisis occurs. If you wait until gold confiscation, currency exchange controls or any other emergency measures are taken it will be too late.

As an investor, what should you do? Put some of your savings in the ultimate crisis hedge – numismatic coins. In the event of a crisis, it would be better to own numismatic gold than bullion.

How much Gold was Confiscated in 1933 😒?

The 1933 Gold Confiscation, a response to the economic challenges of the Great Depression, marked the U.S. government’s departure from the gold standard. Faced with a reduction in circulated currency due to the widespread conversion of funds to gold by both individuals and foreign governments, President Franklin Roosevelt took action on April 5, 1933. Through the signing of Executive Order 6102, he prohibited American citizens from hoarding gold coin, gold bullion, and gold certificates.

Significant quantities of gold were seized in 1933 through Executive Order 6102, a pivotal move orchestrated by President Franklin D. Roosevelt. This executive order mandated that individuals surrender nearly all gold coinage, gold bullion, and gold certificates in their possession to the Federal Reserve by May 1, 1933. The confiscated gold, valued at approximately $63 million based on the price of $20.67 per ounce, reflected a substantial government intervention during that period. This event, however, was not isolated, even within the context of contemporary history. A similar directive occurred in 1959, under the administration of President Franklin D. Roosevelt, where the government seized all gold bullion and coins through the reiteration of Executive Order 6102.

Executive Order 6102 

1. President Franklin D. Roosevelt enacted Executive Order 6102 on April 5, 1933, compelling individuals to relinquish their gold assets by May 1, 1933.
2. The directive mandated the delivery of gold coins, gold bullion, and gold certificates to a Federal Reserve entity, with a compensation of $20.67 per troy ounce in paper bills for those complying.
3. The established value of gold at $20.67 in 1933 corresponds to over $450 in 2023, offering insight into the historical market valuation.
4. Violators faced severe consequences, including fines up to $10,000 and imprisonment for up to 10 years, while citizens were restricted to owning a maximum of $100 in gold coins, equivalent to 5 troy ounces of gold.

This compelled citizens to sell their gold holdings at rates significantly below the prevailing market prices. In 1933, the total gold reserves of the nation amounted to a considerable $4 billion, equivalent to approximately 6,000 metric tons of gold at the prevailing rate of $20.67 per troy ounce. These historical interventions underscore the government’s strategic measures to control and regulate the nation’s gold assets during critical periods in the 20th century.

Legal Battles and Gold Confiscation: Revisiting the Impact of Executive Order 6102

Prosecutions ensued in response to Franklin D. Roosevelt’s Executive Order 6102, leading to subsequent legal actions under Executive Orders 6111, 6260, 6261, and the Gold Reserve Act of 1934. To address a ruling that declared one prosecution under Executive Order 6102 invalid, a reinforcement of the order became necessary. This stemmed from the case of New York attorney Frederick Barber Campbell, who, despite legal efforts, saw his gold confiscated after a failed attempt to withdraw it from Chase National Bank.

In the aftermath, the Roosevelt administration, under the signature of Secretary of the Treasury Henry Morgenthau Jr., issued Executive Orders 6260 and 6261, pertaining to gold seizure and the prosecution of hoarders. Shortly thereafter, Congress ratified these orders through the Gold Reserve Act of 1934. New Treasury regulations were introduced, imposing civil penalties, including confiscation of gold and fines equal to double the seized gold’s value.

The subsequent prosecutions targeted various individuals, including Gus Farber, a San Francisco merchant, who faced charges for selling gold coins without a license. Similarly, the Barabans, owners of a refining company, were prosecuted for fraudulent practices involving gold. Louis Ruffino, convicted under the Trading with the Enemy Act, faced consequences for possessing gold. Foreign entities, like the Swiss Uebersee Finanz-Korporation, experienced gold confiscation, compelling them to accept paper currency in exchange.

An indirect form of gold seizure occurred through executive orders affecting bonds, gold certificates, and private contracts, whereby payments in gold were substituted with paper currency. The Supreme Court, with four dissenting justices known as the “Four Horsemen,” upheld these seizures as constitutional, despite opposition to Roosevelt’s New Deal policies. The legal landscape surrounding gold ownership during this period thus witnessed a series of prosecutions and constitutional validations.

Debunking the Safe Deposit Box Seizure Hoax Amidst Gold Confiscation Claims.

A widely circulated hoax claims that President Roosevelt ordered the seizure and search of all safe deposit boxes in the country for gold by Internal Revenue Service officials. The fake executive order, dated March 9, 1933, purports to prohibit gold and silver holdings, sealing safe deposit boxes and restricting sales or purchases of these precious metals.

This hoax first appeared in the book “After the Crash: Life In the New Great Depression,” with subsequent internet references adding the mention of silver. Analysis reveals that the text is intentionally designed, combining actual excerpts from Executive Order 6102 with invented content. Notably, the hoax falsely asserts that safe deposit boxes held by individuals were forcibly searched or seized under the order.

In reality, the few prosecutions for gold “hoarding” during the 1930s were executed under different statutes, and safe deposit boxes were not subject to forced searches. One case in 1936 involved the seizure of a non-U.S. citizen’s safe deposit box containing over 10,000 troy ounces of gold, executed with a search warrant as part of a tax evasion prosecution.

The U.S. Treasury also gained possession of numerous safe deposit boxes due to bank failures during the 1930s. Over 3,000 banks failed, leading to the transfer of unclaimed box contents to the Treasury. These debunked claims shed light on the historical context surrounding gold confiscation and dispel unfounded notions of widespread forced searches of safe deposit boxes.

Pre-1933 gold coins, viewed as a valuable hedge, are accessible at moderate premiums over contemporary bullion coins. Despite this, it is crucial to emphasize that this information is not a formal legal opinion but an overview to help individuals assess whether pre-1933 gold coins align with their hedging strategy. The document refrains from making categorical statements about the survival of pre-1933 gold coins in a confiscation scenario or predicting the likelihood of such an event.

In light of historical references, including President Roosevelt’s 1933 executive order and its justification under the Trading with the Enemy Act, discussions on the president’s authority to respond to economic emergencies gain relevance. Comments by former Federal Reserve Chairman Ben Bernanke and reports of asset managers expressing concerns about storing gold in the U.S. underscore the ongoing relevance of considering potential governmental actions.

Various quotes from experts and analysts, such as Larry Williams, Richard Russell, Marc Faber, Julian Phillips, Congressman Ron Paul, and Dr. Franz Pick, highlight diverse opinions on the possibility of gold confiscation. These perspectives offer insights into historical contexts, potential government actions, and considerations for safeguarding gold holdings, ultimately contributing to a comprehensive understanding of the topic.

F.A.Q