Malcolm Rivera
Gold confiscation by the U.S. government in the 1930s is a well-known historical event, with President Roosevelt's Executive Order 6102 in 1933 requiring citizens to surrender their gold coins, bullion, and certificates to the Federal Reserve. This order, aimed at gaining monetary control and enacted during the Great Depression, exempted certain gold coins with a recognized special value to collectors of rare and unusual coins. The Treasury Department's 1954 amendment to the Gold Regulations further expanded the definition of exempt coins to include those minted before April 5, 1933. Despite the existence of non-confiscatable semi-numismatic coins, the notion that specific gold coins are immune to confiscation remains a myth, as future government actions cannot be predicted.
| Characteristics | Values |
|---|---|
| Date of Executive Order | May 1, 1933 |
| Issued by | President Roosevelt |
| Required U.S. citizens to | deliver all but a small amount of gold coin, gold bullion, and gold certificates to the Federal Reserve |
| Exchange rate | $20.67 per troy ounce |
| Exempted | "gold coins having a recognized special value to collectors of rare and unusual coins" |
| Date of exemption expansion | 1954 |
| Expanded exemption to include | "gold coin made prior to April 5th, 1933" |
| Date of Gold Reserve Act | 1934 |
| Effect of Gold Reserve Act | Changed the value of the dollar in gold from $20.67 to $35 per ounce |
| Date of Executive Order 6260 | Not found |
| Issued by | Secretary of the Treasury, Henry Morgenthau Jr. |
| Effect of Executive Order 6260 | Provided for the seizure of gold and the prosecution of gold hoarders |
| Date of Executive Order 6111 | Not found |
| Effect of Executive Order 6111 | Used to prosecute individuals related to Roosevelt's Executive Order 6102 |
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What You'll Learn
Roosevelt's Executive Order 6102, May 1, 1933
On April 5, 1933, US President Franklin D. Roosevelt signed Executive Order 6102, which forbade the hoarding of gold coins, gold bullion, and gold certificates within the continental United States. The order required all individuals, partnerships, associations, and corporations to deliver, on or before May 1, 1933, all but a limited amount of their gold holdings to the Federal Reserve. This amounted to a confiscation of citizens' gold, which the Roosevelt administration deemed necessary to address the severe economic instability of the Great Depression.
The economic crisis had caused bank runs, depleting gold reserves and prompting Roosevelt to declare a national bank holiday in March 1933 to prevent a complete financial collapse. Executive Order 6102 aimed to stop the hoarding of gold, which exacerbated the banking crisis by reducing the gold reserves necessary to back the currency. By consolidating gold under the Federal Reserve's control, the government could inflate the money supply and stabilize the economy.
The order specifically exempted gold intended for "customary use in industry, profession, or art", covering artists, jewellers, dentists, and sign-makers, among others. It also permitted individuals to hold up to $100 in gold coins, equivalent to 5 troy ounces of gold. Additionally, "gold coins having recognized special value to collectors of rare and unusual coins" were protected from confiscation.
Executive Order 6102 was highly controversial, with critics arguing that it was immoral and a violation of promises made under the Gold Standard Act of 1900. They also predicted that it would lead to an inflation of the supply of credit and currency, resulting in an artificial economic boom that would inevitably bust and lead to another depression. Roosevelt's gold confiscation marked a pivotal moment in US economic history, reflecting a shift away from the gold standard towards a more flexible monetary system.
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Gold Reserve Act, 1934
The Gold Reserve Act of 1934 was signed by President Franklin D. Roosevelt on January 30, 1934. The Act was the culmination of Roosevelt's controversial gold program, which began in 1933 with restrictions on the private use of gold. The program aimed to devalue the dollar and increase the money supply to address the negative effects of the 1929 stock market crash and the Great Depression.
The Gold Reserve Act of 1934 had several key provisions:
- It transferred ownership of all monetary gold in the United States, including coins and bullion held by individuals and institutions (including the Federal Reserve), to the US Treasury. In return, individuals and institutions received currency at a rate of $35 per ounce of gold, reducing the gold value of the dollar.
- It prohibited the Treasury and financial institutions from redeeming dollars for gold, effectively banning the export of gold and halting the convertibility of paper money into gold.
- It authorized the President to establish the gold value of the dollar, which Roosevelt did the day after signing the Act, explaining that the purpose was to increase the supply of credit, stabilize domestic prices, and protect foreign commerce.
- It established the Exchange Stabilization Fund (ESF), which the Treasury could use to buy or sell gold, foreign currencies, and other financial instruments to control the dollar's value and conduct open-market operations without Federal Reserve assistance.
The Act had significant economic implications, increasing the growth rate of the Gross National Product (GNP) from 1933 to 1941 and contributing to stabilized inflation over time. It also led to prosecutions of individuals and companies for violating clauses restricting gold ownership and trade.
Regarding the dates that constitute gold collectors' coins from confiscation, Executive Order 6102, issued by President Roosevelt on May 1, 1933, exempted "gold coins having a recognized special value to collectors of rare and unusual coins" from confiscation. This exemption was maintained in subsequent Executive Orders 6260 and 6261 and the Gold Reserve Act of 1934. In 1954, the Treasury Department amended the Gold Regulations, expanding the definition of exempt coins to include "gold coins made prior to April 5, 1933."
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The Trading with the Enemy Act, 1917
The Trading with the Enemy Act (TWEA) was enacted on October 6, 1917, in response to the United States' declaration of war on Germany on April 6, 1917. The Act grants the President of the United States the authority to oversee and restrict trade with hostile nations during times of war. This power has been amended over time, with the Emergency Banking Act of 1933 extending the President's authority to peacetime, and the International Emergency Economic Powers Act (IEEPA) of 1977 restricting the application of TWEA back to times of war.
Under TWEA, President Woodrow Wilson established the War Trade Board and the Office of Alien Property Custodian (APC). The APC was authorised to confiscate property from anyone deemed a potential threat to the war effort, including interned German citizens and businesses. The Austro-Hungarian Empire was sanctioned as an enemy state in 1917, and the United States continued to consider itself at war with the dissolved empire until separate peace treaties were ratified with Austria and Hungary in 1921.
The Act has been invoked multiple times throughout history, including economic sanctions against North Korea from 1950 to 2008 and the Italian Enemy Act of 1947, which prevented members of the Mussolini regime from controlling US-based businesses. TWEA has also contributed to the expansion of presidential powers, particularly during national emergencies, and has been used as a basis for declaring a national emergency and imposing economic sanctions.
In terms of gold confiscation, Executive Order 6102, issued by President Franklin D. Roosevelt in 1933 under the authority of TWEA, required US citizens to surrender their gold coins, bullion, and certificates to the Federal Reserve in exchange for $20.67 per troy ounce. This order specifically exempted gold coins with a recognised special value to collectors of rare and unusual coins, as the government's focus was on obtaining monetary control of gold bullion. The Gold Reserve Act of 1934 further amended the gold confiscation provisions, expanding the definition of exempt coins to include those minted before April 5, 1933.
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Executive Orders 6260 and 6261
Executive Order 6260-A, relating to the administration of the petroleum industry, was also issued by President Roosevelt on August 28, 1933. This order was amended multiple times, including by President Dwight D. Eisenhower in 1950 and 1960, to address ongoing national emergencies and ensure the continuity of regulations and licenses related to gold.
Executive Order 6261, issued on August 29, 1933, pertained to the sale and export of gold recovered from natural deposits. It authorized the Secretary of the Treasury to issue licenses for the export of articles fabricated from gold sold under this order. This order could be modified or revoked at any time.
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Gold coins with special collector value
There are several factors that contribute to the special collector value of gold coins:
- Age: Older coins are often more valuable to collectors due to their historical context and scarcity. For example, the first $2.50 gold coins, known as "Quarter-Eagles", were struck in 1840 and are highly sought after by collectors.
- Rarity: The rarity of a gold coin can be influenced by its mintage, with lower production numbers generally leading to higher demand and value. For example, the 1933 Double Eagle gold coin is extremely rare due to Executive Order 6102, which ceased all gold coin production and ordered the destruction of all 1933-minted coins.
- Historical Significance: Gold coins with a significant historical context are often prized by collectors. For instance, the 1861-D gold dollar and half eagle, and the 1854-D three-dollar coin are considered some of the most iconic US gold coins due to their rarity and historical significance.
- Design: Unique designs and diverse features can enhance the value and desirability of gold coins. The $5 Indians, issued from 1908 to 1929, are valued by collectors for their distinct "incuse" design, with details carved into the surfaces of the coins.
- Gold Content and Purity: The gold content and purity of a coin are fundamental factors in determining its value. Coins with a higher gold content and purity are generally more desirable to collectors and investors. The American Eagle gold bullion coins, for instance, are highly regarded for their purity and craftsmanship.
- Provenance: The ownership history of a gold coin can also add value and cachet. Coins from famed collections, such as Bass, Garrett, and Eliasberg, tend to be more valuable.
It is important to note that the criteria for special collector value may vary among collectors, and it is always a good idea to consult with experts or reputable dealers when acquiring gold coins for collection or investment purposes.
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Frequently asked questions
In 1933, President Roosevelt issued an Executive Order requiring US citizens to deliver their gold coins, bullion, and certificates to the Federal Reserve in exchange for $20.67 per troy ounce. This was followed by the Gold Reserve Act of 1934, which changed the value of the dollar in gold from $20.67 to $35 per ounce.
Yes, the order specifically exempted gold coins with a "recognized special value to collectors of rare and unusual coins". It also allowed individuals to hold up to $100 in gold coins.
Gold confiscation can lead to investors paying unnecessarily high prices for gold, especially if they believe that certain types of gold coins are exempt from confiscation. It is important for investors to buy gold from trusted sources and not be influenced by telemarketers promoting expensive coins as "non-confiscatable".
No, the concept of "non-confiscatable" gold is a myth. While certain gold coins may have been exempted from past confiscations, there is no guarantee that they will be exempt in the future.
While there is no active gold confiscation in the US at present, it is possible that it could happen again in the future. Investors should be aware of this possibility and make informed decisions accordingly.
