1933 Gold Confiscation Act
The freedom to own and retain gold bullion in America is relatively new. It was reintroduced in 1975 after it had been taken away in 1933. This freedom is also only a temporary one, as it is a revocable privilege, not a basic right. This fact has already been demonstrated four times in American history. Gold was confiscated twice prior to the signing of the Constitution, once under President Lincoln during the Civil War, and most notably, again in 1933 under Franklin D. Roosevelt and Executive Order 6102.
Executive Order 6102
Executive Order 6102 was signed by President FDR on April 5, 1933, in an attempt to stabilize the ailing economy. It specifically forbid the hoarding of gold coin, gold bullion, and gold certificates and required all US citizens to deliver their gold to the Federal Reserve in return for its fair market value. Violation of the order was punishable by 10 years in prison or up to $10,000 in fines, which equates to over $165,000 when adjusted for inflation as of 2010. The act did, however, exclude “gold coins having recognized special value to collectors of rare and unusual coins,” thereby allowing citizens to keep their private gold. In 1934, the government went on to extend this policy to those holding a significant amount of silver as well.
Fair market value of gold at the time was $20.57 an ounce. Immediately after the confiscation, the Federal Reserve graduated the price of gold up to $35.00 an ounce, an increase of approximately 70%. Imagine the benefits that those who were holding private gold received during this time period!
Silver bullion was also made illegal to own during the 40 year ban. However, this is often little discussed, as silver coins were still a large part of the money supply up until 1964. Almost all pre-1964 coinage was 90% silver, and the coins were not illegal to own during this time, as it was a mainstay of the monetary economy. Silver bars, on the other hand, were illegal, as they represented wealth outside the monetary system and were systematically “purchased” from their owners at a price well below market value.