Government Confiscation of Gold: Understanding the Facts

May 1, 1933 – President Roosevelt's Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. An exception to the order was listed in section 2 (b) “Gold coin and gold certificates in an amount not exceeding in the aggregate $100 belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins.”

Jan 30, 1934 -- The Gold Reserve Act of January 30, 1934 required that all gold and gold certificates held by the Federal Reserve be surrendered and vested in the sole title of the United States Department of the Treasury and changed the value of the dollar in gold from $20.67 to $35 per ounce.

1954 - In 1954 the Treasury Department amended the Gold Regulations of the original Executive Order to enable the continuance of the exemption of rare coins from the gold confiscation provisions, and they expanded the definition of "coins" with a recognized special value to collectors of rare and unusual coins to include "gold coin made prior to April 5th, 1933 (Federal Register 4309, 4312 1954, as codified in 31 CFR Section 54.20)

Aug 15, 1971 - The price of gold remained fixed from Jan 30, 1934 until August 15, 1971, when President Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange.

Dec 31, 1974 - On December 31, 1974, with Executive Order 11825, President Gerald Ford repealed the Executive Order that Roosevelt used to call in gold in 1933. This was necessary because on the same day Congress restored Americans' right to own gold. The limitation on gold ownership in the U.S. was repealed after President Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub. L 93-373 which went into effect December 31, 1974. P.L. 93-373 did not repeal the Gold Repeal Joint Resolution, which made unlawful any contracts that specified payment in a fixed amount of money or a fixed amount of gold. That is, contracts remained unenforceable if they used gold monetarily rather than as a commodity of trade.

Oct 28, 1977 - 1977 Congress removed the president's authority to regulate gold transactions during a period of national emergency other than war. However, the Act of Oct. 28, 1977, Pub. L. No. 95-147, § 4(c), 91 Stat. 1227, 1229 (originally codified at 31 U.S.C. § 463 note, recodified as amended at 31 U.S.C. § 5118(d)(2)) amended the 1933 Joint Resolution and made it clear that parties could again include so-called gold clauses in contracts formed after 1977.

Dec 17, 1985 – President Reagan signed into law the Gold Bullion Coin act which allowed the US Mint to produce gold coins from “newly mined domestic sources”. Gold American Eagles went on to become one of the most well known gold coins.

So the question remains; could it happen again? Who knows? Of course it is possible; it has been done before and governments in times of stress simply change the laws. As you can see above, gold bullion was forced to be sold to the government in 1933. Then in 1974, that executive order was repealed. Furthermore, in 1977, Congress removed the president’s authority to regulate gold except during a national emergency of war.

It is true that numismatic collector type coins were excluded in the 1933 confiscation. Whether or not they will again be excluded in any future confiscation is completely unknown. There is a logical thought process for excluding collector coins, in that the government was trying to obtain monetary control of gold bullion. The government had no interest in rare and unusual coins of special value to collectors. However, what the government has done in the past is not necessarily indicative of what they will do in the future.

Bottom line – Confiscation did happen. It was repealed, but it could happen again in the future. Laws can and do change.