Gold Was Never Illegal
(Originally written in 1999 for Coin World when I was on the staff there, this shortened version is on several websites and blogs.)
Gold Was Never Illegal by Michael E. Marotta
Despite numerous claims by coin dealers and conservative patriots (sometimes the same people), it was never illegal for Americans to own gold. It is true that ownership of gold was closely defined. It is also true that zealous government agents took gold from people under the guise of law. However, for most people — including coin dealers — there was never any practical limit on the ownership of gold.
Presidential Executive Order 6102, April 5, 1933, made it illegal to “hoard” gold. The order exempted anyone whose “usual and customary” business required gold. (Dentists and jewelers come to mind. Electronic fabricators would come under this once electronics was invented.) Anyone could own up to $100 in gold coin. In 1933, $100 was two or three months wages for the average worker, about $6000 to $10,000 in today’s money.
Numismatic Scrapbook magazine was founded three years after this executive order. In the pages of that publication, the London Spot Price for Gold was often published along with the London fix for Silver. Gold coins such as the U.S. $3, $10, and $20 were offered for sale by dealers to the public in display ads at prices within a few cents of the London fix.
On the other hand, numismatist Tom DeLorey recounts a story told to him by Abe Kosoff. “Abe Kosoff once told me how he had arranged, on behalf of a few wealthy clients, to have bags of U.S. $20s shipped to a European bank PRIOR to the Gold Surrender Act, in anticipation of it and in the expectation that the price of gold would be raised. It was. He was then visited by a U.S. Treasury agent AFTER the Gold Surrender Act who told him that they had been examining bank records to see who had been withdrawing gold coins in the six months prior to the Act, and that according to the records he had withdrawn x number of bags of $20s. He was given a fixed amount of time to return the coins to the Treasury, or face prosecution. He got them back and returned them.”
In addition, another individual (Frederick Barber Campbell) lost a large holding of gold bullion stored in the Chase Manhattan Bank in 1933. It is true that in 1963, federal agents seized gold coins from the Witte Museum in San Antonio.
However, it is also true that the Thomas Elder catalog of April 14-15, 1933, carried a letter from William H. Woodin assuring collectors that they could own gold coins — both rare examples and souvenirs. Furthermore, in 1954, the Federal Reserve Bank of Cleveland sent a letter to its members telling them not accept gold coins from depositors, but to direct people to take their gold coins to coin dealers.
Numismatists - like dentists and jewelers - were exempt from the restrictions.
The average person, with no special needs, could still keep $100 (face)value in gold coins (or bullion), at time when gold was $20 per ounce, (changed to $32), and when a dollar a day was the pay of an unskilled worker.
While being a "jeweler" might be easier to show than claiming to be a dentist, being a "numismatist" has no legal status that I know of: anyone could claim it.
The purpose of the law was to move gold from the banks to the Federal Reserve to stand behind the dollar in transactions with other central banks.
Except for the case of Campbell and the Witte Museum in San Antonio and the citation by Tom DeLorey from Abe Kosoff, we have very little evidence of actual seizures and absolutely no shortage of US Gold Coins from before 1933. Alcohol Prohibition was enforced much more strictly, and you see how that went. In The Fountainhead, Mike and Howard duck into a speakeasy twice, I believe.
Yes, Presidential Order 6102 said what it did. But that is all that it said. Gold was never illegal. Hoarding it was. Collecting gold coins and buying and selling them in any quantity was perfectly within the law.
http://www.objectivistliving.com/forums/...
Gold Was Never Illegal by Michael E. Marotta
Despite numerous claims by coin dealers and conservative patriots (sometimes the same people), it was never illegal for Americans to own gold. It is true that ownership of gold was closely defined. It is also true that zealous government agents took gold from people under the guise of law. However, for most people — including coin dealers — there was never any practical limit on the ownership of gold.
Presidential Executive Order 6102, April 5, 1933, made it illegal to “hoard” gold. The order exempted anyone whose “usual and customary” business required gold. (Dentists and jewelers come to mind. Electronic fabricators would come under this once electronics was invented.) Anyone could own up to $100 in gold coin. In 1933, $100 was two or three months wages for the average worker, about $6000 to $10,000 in today’s money.
Numismatic Scrapbook magazine was founded three years after this executive order. In the pages of that publication, the London Spot Price for Gold was often published along with the London fix for Silver. Gold coins such as the U.S. $3, $10, and $20 were offered for sale by dealers to the public in display ads at prices within a few cents of the London fix.
On the other hand, numismatist Tom DeLorey recounts a story told to him by Abe Kosoff. “Abe Kosoff once told me how he had arranged, on behalf of a few wealthy clients, to have bags of U.S. $20s shipped to a European bank PRIOR to the Gold Surrender Act, in anticipation of it and in the expectation that the price of gold would be raised. It was. He was then visited by a U.S. Treasury agent AFTER the Gold Surrender Act who told him that they had been examining bank records to see who had been withdrawing gold coins in the six months prior to the Act, and that according to the records he had withdrawn x number of bags of $20s. He was given a fixed amount of time to return the coins to the Treasury, or face prosecution. He got them back and returned them.”
In addition, another individual (Frederick Barber Campbell) lost a large holding of gold bullion stored in the Chase Manhattan Bank in 1933. It is true that in 1963, federal agents seized gold coins from the Witte Museum in San Antonio.
However, it is also true that the Thomas Elder catalog of April 14-15, 1933, carried a letter from William H. Woodin assuring collectors that they could own gold coins — both rare examples and souvenirs. Furthermore, in 1954, the Federal Reserve Bank of Cleveland sent a letter to its members telling them not accept gold coins from depositors, but to direct people to take their gold coins to coin dealers.
Numismatists - like dentists and jewelers - were exempt from the restrictions.
The average person, with no special needs, could still keep $100 (face)value in gold coins (or bullion), at time when gold was $20 per ounce, (changed to $32), and when a dollar a day was the pay of an unskilled worker.
While being a "jeweler" might be easier to show than claiming to be a dentist, being a "numismatist" has no legal status that I know of: anyone could claim it.
The purpose of the law was to move gold from the banks to the Federal Reserve to stand behind the dollar in transactions with other central banks.
Except for the case of Campbell and the Witte Museum in San Antonio and the citation by Tom DeLorey from Abe Kosoff, we have very little evidence of actual seizures and absolutely no shortage of US Gold Coins from before 1933. Alcohol Prohibition was enforced much more strictly, and you see how that went. In The Fountainhead, Mike and Howard duck into a speakeasy twice, I believe.
Yes, Presidential Order 6102 said what it did. But that is all that it said. Gold was never illegal. Hoarding it was. Collecting gold coins and buying and selling them in any quantity was perfectly within the law.
http://www.objectivistliving.com/forums/...
