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  • Posted by CircuitGuy 6 years, 6 months ago
    It sounds like the gov't doomed its confiscation plan by only offering face value, i.e. half the market value of the gold. This invites people to keep it, melt it down, or find black market ways to sell it to people who need it for industrial processes. If the gov't had paid market value, though, I suspect people would have just substituted other precious metals or basic materials with a high value density.
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    • Posted by $ 6 years, 6 months ago
      Ferguson does not go into any of this, but ...

      I think that the experience with Prohibition was clear enough. The government probably did not expect anyone to obey the law, but only had the pretext for ordering banks to deliver their gold to the treasury. Banks could not ignore the law.

      Realize that the law had loopholes. Anyone still could hold $100 in gold, which was like three months wages for an unskilled worker (dollar a day; 10 cents an hour).

      Also, the numismatic exception was significant. Roosevelt's Secretary of the Treasury (and personal friend) was William H. Woodin. In 1909, Woodin wrote the standard reference on US Mint Trial and Experimental Pieces. Later laws (exceutive orders) within the year clarified that to "limit" collections to five of each kind of coin. Not five gold half eagles, but 5 1909-S, 5 1909-P, 5 1909-D, ... five 1888-P, five 1888-S, five... dollars, quarters eagles, three dollar, four dollar, half eagles, eagles, and double eagles...

      A later order limited the total holding of gold quarter eagles ($2.50) apparently because these were the smallest common issue, most likely to scuttle the complete abandonment of gold in daily business. (Contrary to "Gresham's Conjecture" gold dollar coins never saw much circulation: they were more often jewelry and love tokens.)

      Even after the proclamations, coin magazines priced gold coins against the London Spot Price.

      Ferguson's book is more objective, a citation to the actual laws and orders, not so much political commentary, though some is needed to frame the discussion.
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