Gold Confiscation by Roosevelt

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In 1933, slavemason Franklin D. Roosevelt confiscated the gold and silver of the American people thereby making them slaves of Pharaoh.

Gold Confiscation and a Case for Double Eagles

Recently Richard Butler, (former United Nations chief weapons inspector in Iraq) CNN’s Ambassador In Residence and expert on the Middle East, linked the funding of al Qaeda to secretive gold transactions in the Middle East. On February 17th Douglas Farah of the Washington Post wrote an article entitled "Al Qaeda’s Road Paved With Gold." The "gold cartel" has rolled out the heavy artillery. It’s not a stretch to infer that the American people are starting to be "conditioned" to see gold as evil – a link to terrorism.

Last week Chris Powell, speaking for GATA at the Press Club Luncheon in Washington, said it was certainly possible that our Government might confiscate gold. His reasoning was that the Government would need all the gold it could get its hands on to keep the bullion banks afloat, when the price of gold explodes.

For the last 20 years, I have found the subject of gold confiscation intriguing. I have thought about it, written about it, talked about it and researched it. I am concerned, as the owner of a precious metals firm who has survived a two decade-long bear market in the precious metals industry, that as the price of gold is finally starting to take off, the Government may well decide to intervene, and confiscate our "real money" – gold, the metal of Kings.

Does this sound a bit extreme? Well, consider that ownership of gold in the United States is a privilege, not a right. Yes, the law is still "on the books" granting the government the right to recall privately owned gold. Let’s take a look at the background.

It was in April, 1933 and in his first "official" act in office; President Roosevelt declared a banking "holiday" and issued the order to confiscate gold:

Executive order: By virtue of the
authority vested in me by Section 5(B) of
The Act of Oct. 6,
1917, as amended by section 2 of
the Act of March 9, 1933, in which
Congress declared that
a serious emergency exists, I as
President, do declare that the national
emergency still exists;
That the continued private hoarding
of gold and silver by subjects of the United
States poses a
grave threat to the peace, equal
justice, and well-being of the United
States; and that appropriate
measures must be taken immediately
to protect the interests of our people.

"Therefore, pursuant to the above
authority, I herby proclaim that such gold
and silver holdings
are prohibited, and that all such
coin, bullion or other possessions of gold
and silver be tendered within fourteen days
to agents of the Government of the United
States for compensation at the
official price, in the legal tender of
the Government. All safe deposit boxes in
banks or financial
institutions have been sealed,
pending action in the due course of the
law. All sales or purchases
or movements of such gold and
silver within the borders of the United
States and its territories,
and all foreign exchange
transactions or movements of such metals
across the border are herby prohibited.

"Your possession of these
proscribed metals and/or your maintenance
of a safe-deposit box to
store them is known to the
Government from bank and insurance
records. Therefore, be advised
that your vault box must remain
sealed, and may only be opened in the
presence of an agent of
The Internal Revenue Service.

"By lawful Order given this day,
the President of the United States."

In this act of theft, the citizens of the United States of America were compensated at the "official" price of $20.67 an ounce. That was the "official" price of gold for 97 years. Following the confiscation, the dollar was devalued by 40% - and the price of gold was revalued upwards to $35 an ounce.

Under the authority of the Emergency Banking Relief Act, President Roosevelt issued Executive Order No. 6102 which allowed the Government to confiscate all privately owned gold in the United States. The owners would be repaid in paper dollars whether they like it or not.

Dentists, jewelers and coin collectors were exempt from this Executive Order, and were allowed to own gold. (In terms of coins, the actual terminology used was "gold coins having a recognized special value to collectors of rare and unusual coins.")

In the mid-eighties, Representative Ron Paul (still fighting the gold battle for us, God bless him) served on the Gold Commission in the House of Representatives. Paul wrote: "If it gets bad enough, they’ll declare a national economic emergency. They’ll take over the banks, all business and industry. They may even try to confiscate our gold. I served on the Gold Commission for eight or nine months while I was in Congress along with fifteen other members. I brought up the subject of confiscation. The power to confiscate gold is still on the books as the law of the land. I urged the full Commission to recommend Congress repeal the power to confiscate gold in an economic emergency. We pushed it to a vote and I was the only one that voted to recommend to Congress that we never again contemplate taking the gold of the American people. The fifteen other members voted it down. The power is still there on the books, and they can do it any time they wish."

Unfortunately, our current Administration has turned a deaf ear to the gold manipulation problems uncovered by GATA and Bill Murphy. The Treasury and the Fed still have a free rein to do whatever necessary to hold back the price of gold. No doubt, those advising President Bush believe it is a matter of National Security to continue this outrageous practice. I really do believe that there is a high probability that the Bush Administration will eventually resort to confiscation. They have the legal justification to do it, and it would allow them to continue their active suppression of the price of gold.

The (large amount of) confiscated gold would give the Government a much needed new source of supply they could use to provide to the bullion banks, to help them off-the-hook. This would help them repay their gold "loans" to their friends at the central banks. Or the Government may use it to "re-stock" Fort Knox (assuming our gold reserves have been sold out from beneath us).

In the late 1980s Dr. Franz Pick (a highly respected economist and currency expert) wrote a well received book The Triumph of Gold. Pick wrote: "I am afraid that one day the government will indeed call gold in. Gold bullion will be subject to confiscation. This is the one big advantage of numismatic gold, such as Double Eagles. It’s an idiosyncrasy of governments that although they may prohibit ownership of gold in any form, they are reluctant to touch collections of numismatic gold coins."

"Today there are some 49 countries which forbid ownership of gold by their citizens, but do allow holding gold coins for numismatic purposes. Even the Soviet Union and Eastern countries legally tolerate the acquisition of numismatic gold coins. For these are the only gold holdings that could be kept in your safe deposit box without any fear of confiscation."

During WWI Congress passed The 1917 Trading With the Enemy Act. This act is still in place. Its article 5(b) states: "That the President may investigate, regulate or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange for the export, hoarding melting, or earmarking of gold or silver coins or bullion or currency."

There you have it. With this awesome power, the President of the United States may do what he pleases with our money or with gold if he deems our monetary system to be in jeopardy. If you’ve been following the articles in LeMetropolecafe it is very obvious that our financial system is in grave danger, and a rising gold price is all it will take to create the crisis.

Roosevelt used section 5(b) in 1933 to confiscate gold. President Carter used it to freeze Iranian assets during the hostage crisis. Will President Bush also use it when we take our money out of the banks (like they are starting to do now in Japan) and rush to buy gold or wire money off shore? Do not bet against it!

Historically, governments have banned the ownership of gold when their citizens lose confidence in government issued paper money. Why will it be different here this time? It has already happened before. All that is required (because of the Trading With The Enemy Act of 1917) is for President Bush to issue a decree.

1933, 1934, 1954, 1984 and tomorrow: Roosevelt justified his executive authority because of the national emergency. He empowered the Treasury to maintain complete control over all transactions in gold, silver and foreign exchange. His executive order demanded COMPLETE SURRENDER OF GOLD COINS, GOLD BULLION AND GOLD CERTIFICATES still in the possession of individuals. The owners had 25 days to turn their gold into a Federal Reserve Bank. FAILURE TO COMPLY WAS PUNISHABLE BY A FINE OF $10,000 OR 10 YEARS IN PRISON OR BOTH.

Silver also suffered the fate of gold. On August 9, 1934 a Presidential Proclamation ordered all silver bullion surrendered to the Treasury within 90 days and a 50 percent tax was levied on any profits from the sale of silver. The sellers were paid 50.1 cents per ounce.

In 1984 the IRS proposed new legislation that distinguished between bullion and numismatic gold and silver. This could be used in the future as a standard to define what is exempt from confiscation. They said that gold or silver coins or bars must be worth at least 15% more than their metal value on sell back to qualify as a collectable rather than as bullion. Why would they possibly make such a distinction unless they planned, at some future date, to recall the bullion?

Our best defense against confiscation is The Eminent Domain Clause of the Fifth Amendment. The clause states, in part …."nor shall private property be taken by the government for public use, without just compensation." In 1933 the Government paid the "official" price of $20.67 for an ounce of gold. Why did Roosevelt exempt gold coins "having a recognized special value to collectors of rare and unusual coins?" His Executive Order did, after all, call for the confiscation of "all gold coin." What is a "just" price for a "numismatic" gold coin? It would have been a monumental task to administrate the grading and pricing of each individual gold coin. Note the wording here – exempted from the surrender requirement were not the "owners" of rare gold coins, nor the "holders" of them, nor persons who "possessed" them, nor even "investors." On the contrary, the order specifically focused on an individual’s motives for having rare gold coins, exempting just one classification: "Collectors."

A clear distinction was made between the "collector" and the "investor". A collector’s primary interest in rare coins is enjoyment for historical, aesthetic or cultural reasons. An investor’s interest in rare coins is financial, to make a profit. Roosevelt clearly intended to exclude only the collector. As a result of FDR’s decree, most of the gold was now in the hands of the Government, which increased their holding from $4 billion to $7 billion and foisted "paper money" on the citizens in return.

This was a sad day for freedom in America. What ever happened to the laws laid down by our founding fathers? As they stated in the Constitution of The United States of America, Art. 1 Sec. 8 and 10: "The Congress shall have the power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.. no state shall make anything but gold and silver coin as a tender in payment of debts.

Finally, a brief history of the performance of Double Eagles vs. bullion gold since 1980.

Each Double Eagle contains just under an ounce of pure gold. Using the industry standard, the CDN Monthly Supplement, the Greysheet bid prices we find that the common date Double Eagles (the cheapest and most common dates) in circulated condition (xf/au) peaked at $800 each in March, 1984. The lowest price for these coins was $300 in September, 2001. At any point in between, they always were bid above their gold value. In uncirculated MS/60 (lowest grade of uncirculated) the prices were $885 and $310 and in MS/63 (higher grade uncirculated) they were bid at $1250 and $365. As you can see, the value of these coins can be as much as hundreds of dollars above their gold value or as little as 10% above their gold value.

As the price of gold rises, the premium increases dramatically on the Double Eagles as they are scooped up off the market. Supply/demand – when in demand these coins are wonderful performing investments. If the good folks at LeMetropolecafe are right and gold hits $600 an ounce, depending on the grade of coin, the double eagles should command a wholesale price well north of $1,000 each. At today’s prices, which are just off the bottom – the lowest on record, with gold starting to make its move, the time is perfect for accumulation of this kind of gold coin. The reason I recommend the Double Eagle coin is because it is the cheapest way to own the most gold in a numismatic coin. These are bullion substitutes with a difference. The difference being if you accumulate a variety of them in different dates and mint marks and "become a collector" the laws governing confiscation that are now on the books will allow you to keep them. This insulates you as best as one possibly can from Government recalls. This is a BIG advantage to you. Beyond profit! And should these coins also be "recalled" at least you will realize a premium above that allowed for you bullion coins. At today’s prices there is virtually no risk, just benefit in the ownership of Double Eagle gold coins.

If you would like to discuss this topic with us or if you wish to receive our reports on gold and the economy please drop us a line at or call us at 1 (800) 822-8080.

David Schectman


Miles Franklin, Ltd. (A family owned gold, silver and numismatic coin dealer since 1991)