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Monday, July 26, 2010

Government May Confiscate Gold - Altoona, PA., Tuesday Evening, January 16, 1934

Note from Yours Truly: I have read conflicting accounts of whether "the government confiscated gold" back in the day, so when I came across this article, I thought I should bring it out of retirement to shed some light on the matter. So, the answer appears to be Yes, the government confiscated gold in 1934, for all practical purposes... They made it illegal to own gold, and told everyone to take their gold out of their sock drawers and trot it over to the treasury to "redeem it". Back then, the US was on the Gold standard, meaning each dollar was equivalent to (backed by) a fixed amount of gold, and woe to the government which found itself coming up short on the shiny stuff. 

It seems they were having a little banking problem of their own back then, coupled with what we now affectionately call the Great Depression, and the boys running the show were trying all sorts of CWWAAAZZZY things to try and jump start the economy. (Oops, I mean turn that cranky thing on the front to get the economy rolling? No wonder they were having trouble...lousy soundbites and no Prozac for another 50 years...)



GOVERNMENT MAY CONFISCATE GOLD

Tomorrow Midnight Set as Deadline for Redeeming Gold Coins, Certificates and Bullion at Par.

According to the interpretation placed upon the latest ruling of the secretary of the treasury in a bulletin issued to all banking institutions in the Third federal reserve district, by local banking officials and post office authorities, the government of the United States may at any time after midnight tomorrow, Jan. 17, confiscate any gold coin, gold bullion, or gold certificates found in the possession of any person living within the jurisdiction of the United States.
The order from the secretary of the treasury reads in part: "Whereas, on Dec. 28, 1933, Henry Morgenthau, jr., as acting secretary of the treasury, issued an order under authority of section 1I of the federal reserve act of Dec. 23, 1913, as amended by section 3 of the act of March 9, 1933, entitled an act to provide relief in the existing national emergency in banking, and for the other purposes.
"Whereas, in my judgment such action is necessary to protect the currency system of the United States.
"Now, therefore, I, Henry Morgenthau, jr., secretary of the treasury, do hereby fix midnight of Wednesday, Jan. 17, 1934, as the expiration of the period within which any gold coin, gold bullion, or gold certificates may be paid and delivered to the treasurer of the United States in compliance with the requirements contained in such order or Dec. 28, 1933, as amended."

"In the event that any gold coin, gold bullion, or gold certificates withheld in non-compliance with said order and of this order are offered after Jan. 17, 1934, to the secretary of the treasury, the treasurer of the United States, any United States mint or assay office, or to any fiscal agent of the United States, there shall be paid therefore only such part or none of the amount otherwise payable therefor as the secretary of the treasury may from time to time prescribe, and the whole or any balance shall be retained and applied to the penalty payable for failure to comply with the requirements of such order  and of this order. The acceptance of any such coin, bullion, or certificates after Jan. 17, 1934, whether or not a part or all of the amount otherwise payable therefor is so retained, shall be without prejudice to the right to collect by suit or otherwise the full penalty provided in section II of the federal reserve act, as amended less such portion of the penalty as may have been retained as hereinbefore provided."

Source: Altoona Mirror, Altoona, PA., Tuesday Evening, January 16, 1934

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