Did FDR Really Confiscate Everybody’s Gold? By Mike Maherry

This was the end of the gold standard for regular people, the people the gold standard protects the most. From Mike Maherry at moneymetals.com:

Did the U.S. government really try to confiscate Americans’ gold?

The short answer is… well, there isn’t a short answer. It’s a complicated subject with more nuance than most people give it.

Yes, President Franklin D. Roosevelt did try to take most of the gold out of the public’s hands. But the scheme didn’t go quite as well as many people claim.

Still, some gold dealers use the confiscation story to try to scare you into only buying collectible coins because there was an exception in Roosevelt’s order for “gold coins having a recognized special value to collectors of rare and unusual coins.” They’ll say, “The government could come to take your Gold Eagles as they did in 1933, but not these collectible coins we’re selling.” Of course, these collectible coins come with higher premiums and bigger profits for the dealer. 

You might call it a confiscation con because the reality is there wasn’t “confiscation” in the strict sense of the word.

So what actually happened?

On April 5, 1933, President Franklin D. Roosevelt signed Executive Order 6102. He justified the move based on the Trading with the Enemy Act of 1917, as amended by the Emergency Banking Act in March 1933.

At the time, the United States was in the grip of the Great Depression. A lot of people were redeeming paper dollars for physical gold because they were losing faith in the paper currency.  This caused significant problems for the federal government because the dollar was tethered to gold, and thus, the printing of it was at least somewhat limited. 

During a Fireside Chat a month before issuing the EO, Roosevelt claimed gold “hoarding during the past week has become an exceedingly unfashionable pastime,” and he said that it was undermining the banking system. The use of the word “hoarding” was almost certainly intentional because of its negative connotations. 

This carried forward to EO6102. Stopping hoarding was the public rationale for the order, but it went far beyond merely taking large amounts of gold from “hoarders.” By creating an expansive definition of “hoarding,” the EO was designed to take virtually all gold coins and bars out of private hands and transfer them to the government. 

“The term ‘hoarding’ means the withdrawal and withholding of gold coin, gold bullion, or gold certificates from the recognized and customary channels of trade. The term ‘person’ means any individual, partnership, association or corporation.”

In short, anyone who wanted to hold their gold as a form of savings was considered to be “hoarding.”

Under the order, private citizens, partnerships, associations, and corporations were required to turn in virtually all their gold. 

The order allowed people to keep up to $100 in gold coins, along with gold “as may be required for legitimate and customary use in industry, profession or art within a reasonable time,” and “rare” coins. 

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