Thursday, April 7, 2011

Read FDR's Executive Order Banning Gold

Many forget that President Franklin Delano Roosevelt, by Executive Order, banned American citizens from owning gold. Tuesday marked the 78th anniversary of FDR's decree.

The Executive Order remained the law of the land until August 15, 1974 when President Gerald Ford signed legislation removing the ban.

This one act by President Ford may make him one of the greatest Presidents of all time. If severe inflation ever hits the United States because of excessive Federal Reserve money printing, President Ford's repeal of the ban makes it much easier for average Americans to protect themselves thorugh owning gold.  .

His signing of this legislation could indeed someday protect against the collapse of most exchange during a hyper-inflation, since we all now should have a few bullion gold coins tucked away that could keep exchange continuing during such a crisis period. The importance of protecting exchange and markets in a highly industrialized country such as the United States should not be underestimated. In a world of governments and central banks gone mad, thanks to President Ford, we have a very important freedom restored that could be very important in maintaing civility in a time of a paper money crisis.

Here's FDR's evil order:

Executive Order 6102

Forbidding the Hoarding of Gold Coin, Gold Bullion and Gold Certificates

By virtue of the authority vested in me by Section 5 (b) of the Act of October 6, 1917, as amended by Section 2 of the Act of March 9, 1933, entitled ‘‘An Act to provide relief in the existing national emergency in banking, and for other purposes,’’ in which amendatory Act Congress declared that a serious emergency exists, I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of this order:

Section 1.

For the purposes of this regulation, 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.

Section 2.

All persons are hereby required to deliver on or before May 1, 1933, to a Federal Reserve Bank or a branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April 28, 1933, except the following:

(a)   Such amount of gold as may be required for legitimate and customary use in industry, profession or art within a reasonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

(b)   Gold coin and gold certificates in an amount not exceeding in the aggregate $100 belonging to any one person; and gold coins having a recognized special value to collectors. of rare and unusual coins.

(c)   Gold coin and bullion earmarked or held in trust for a recognized foreign Government or foreign central bank or the Bank for International Settlements.

(d)   Gold coin and bullion licensed for other proper transactions (not involving hoarding) including gold coin and bullion imported for reexport or held pending action on applications for export licenses.

Section 3.

Until otherwise ordered any person becoming the owner of any gold coin, gold bullion, or gold certificates after April 28, 1933, shall, within three days after receipt thereof, deliver the same in the manner prescribed in Section 2; unless such gold coin, gold bullion or gold certificates are held for any of the purposes specified in paragraphs (a), (b), or (c) of Section 2; or unless such gold coin or gold bullion is held for purposes specified in paragraph (d) of Section 2 and the person holding it is, with respect to such gold coin or bullion, a licensee or applicant for license pending action thereon.

Section 4.
Upon receipt of gold coin, gold bullion or gold certificates delivered to it in accordance with Sections 2 or 3, the Federal Reserve Bank or member bank will pay therefor an equivalent amount of any other form of coin or currency coined or issued under the laws of the United States.

Section 5.

Member banks shall deliver all gold coin, gold bullion and gold certificates owned or received by them (other than as exempted under the provisions of Section 2) to the Federal Reserve Banks of their respective districts and receive credit or payment therefor.

Section 6.

The Secretary of the Treasury, out of the sum made available to the President by Section 501 of the Act of March 9, 1933, will in all proper cases pay the reasonable costs of transportation of gold coin, gold bullion or gold certificates delivered to a member bank or Federal Reserve Bank in accordance with Section 2, 3, or 5 hereof, including the cost of insurance, protection, and such other incidental costs as may be necessary, upon production of satisfactory evidence of such costs. Voucher forms for this purpose may be procured from Federal Reserve Banks.

Section 7.

In cases where the delivery of gold coin, gold bullion or gold certificates by the owners thereof within the time set forth above will involve extraordinary hardship or difficulty, the Secretary of the Treasury may, in his discretion, extend the time within which such delivery must be made. Applications for such extensions must be made in writing under oath, addressed to the Secretary of the Treasury and filed with a Federal Reserve Bank. Each application must state the date to which the extension is desired, the amount and location of the gold coin, gold bullion and gold certificates in respect of which such application is made and the facts showing extension to be necessary to avoid extraordinary hardship or difficulty.

Section 8.

The Secretary of the Treasury is hereby authorized and empowered to issue such further regulations as he may deem necessary to carry out the purposes of this order and to issue licenses thereunder, through such officers or agencies as he may designate, including licenses permitting the Federal Reserve Banks and member banks of the Federal Reserve System, in return for an equivalent amount of other coin, currency or credit, to deliver, earmark or hold in trust gold coin and bullion to or for persons showing the need for the same for any of the purposes specified in paragraphs (a), (c) and (d) of Section 2 of these regulations.

Section 9.

Whoever willfully violates any provision of this Executive Order or of these regulations or of any rule, regulation or license issued thereunder may be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment, or both.

This order and these regulations may be modified or revoked at any time.

Franklin D. Roosevelt

The White House,

April 5, 1933


  1. Is that because of Sec. 2 (c) that Americans were able to buy Krugerrands? Could they buy anything else before the introduction of the Krugerrand without violating the law?

  2. Note how quickly FRD moved. He recited the oath of office on Sat., Mar. 4.

  3. The only reason the ban was lifted was because the US dollar was no longer based on it. By then, what was the point? When Nixon and Volcker reneged on the remains of the gold standard in 1971 to pay for our debts (esp. Vietnam), there was no economic reason to ban personal ownership of gold in the United States anymore.

    If you ban something, it has a degree of power, no? If it is not illegal, it loses it's remaining hold on the minds of the general populace. Yes, I'm thankful we can own gold legally, but at what cost? Our currency is weakening literally by the second thanks to the same greedy bastards who have done this year in, year out. If Washington wants to ban gold, they'll do it in a nanosecond.

    Meet the new boss, same as the old boss.

  4. Suppose there were hyperinflation right now. Would ownership of several ounces of gold coins and silver coins protect you, much less preserve civility in exchange? I'm not convinced that it would. Surely the people who owned gold coins on Apr. 5, 1933 were in much the same position as gold and silver owners today.

    Now consider things from the government's perspective. With hyperinflation, its debt load is becoming easier to manage, but it has an enourmous problem. How will it pay for current expenses? Only a few fools or knaves will be buying its debt instruments, for obvious reasons. Nevertheless, the government will desire an enourmous quantity of wealth to pay its armies of bureaucrats, police, spies, and soliders. It will want to buy ammo, fuel, food, and so on. It will want to buy votes with payments for Social Security, veterans benefits, Medicare, etc. Raising taxes won't help much, for the fiat currency has been ruined.

    So what to do?

    Owners of gold and silver will be villified, as in Sec. 1 of E.O. 6102. The totalitarian, homicidal left* (and probably numerous Republicans e.g. The Maverick) will clamor for confiscation. The government will simply issue a new law or order to sanctify confiscation.

    You might be safe for a time; the agents can't search everyone's house or business simultaneously. But if you spend the gold or silver, it will come into the hands of merchants who will be at risk as much as anyone and probably more, given the relative ease of finding them. (See Section 3.) Since the merchants will need banks for safekeeping of their revenues and to facilitate payments to their own suppliers, their gold and silver becomes easy to find and is promptly seized by the government.

    In almost no time at all, the money metals, esp. gold, disappear into the government's own hoard, and former owners of gold and silver will be left to comfort theirselves with the irony of having been accused of what the accuser is guilty.

    So, owning a few gold coins is necessary, but it's far from sufficient to protect yourself and to maintain civility.

    *Yesterday at Common Dreams one commenter pined for "retroactive abortions" for Republicans. Of course, such abortions wouldn't be limited to Republicans for long if that person had his way.

  5. No, Gerald Ford was not the greatest president. Americans who value freedom and prosperity should not have to rely on some agent of the State to reverse a fascist forbiddance that some other agent of the State forced on them.

    Jacob Hornberger explained the relationship between gold and freedom:

    A truly free people would withdraw their consent of a centralized, tyrannical regime, and de-legitimize its false, stolen authority.

    Americans must take back the gold that the illegitimate government stole from them, and the people of the states need to nullify any and all federal laws, rules, agencies that usurp their inalienable rights of free trade and free, voluntary exchange.

    And that especially means cutting off the shackles of the compulsory Federal Reserve and legal tender laws that have enslaved us for a century.

  6. My guess is it would be much more difficult to enforce.

  7. My biggest fear is that as the collapse nears, the ignorant American electorate will vote in some kind of FDR like fascist.

    I don't have any fear that the government will ban gold, but I could see them increasing the taxes on the gains way beyond the present 28%, which could change the dynamics of gold as a hedge against the governments destruction of the currency. I could see them doing this under the guise of taxing windfall profits of the rich.

  8. King Franklin (or George or Barack) commandeth. Who gives a shit, just ignore the wizard of OZ. Where in the Constitution does it state that an individual must obey an "executive order". Where is the basis for the "executive order"?

  9. Actually, in many places this executive order was ignored.

    First was the exemption for numismatists. Coin dealers and collectors traded US and foreign gold coins minted before 1933. Anyone could claim that he was a numismatist. Supposedly, a hoarder had to have more than five pieces of any date/type/mint mark/denomination combination.

    Second, there were places where gold coins were used in large purchase transactions like the Mexican borderlands. Latinos do not trust paper; one notices that many Latin American countries have the coin's specifications in the legend. So they saved their gold coins and when it came to a major purchase, they would go into the USA to buy the item with them.

    There were other and better investments through the mid-1960's. Purchasers of stock from the 1930's would have had fortunes in hand thirty years later. A collection of gold coins would have been interesting but stagnant.

    I am not sanctioning the way this was accomplished by any means; however, it was the time when the United States was consolidating its premier position on Earth and it would have been short- and medium-term foolish not to have interests there.

    In other words, there was little reason to run into gold despite the real economic fundamentals. However, the United States started its decline in 1973 and I find it interesting that President Ford got rid of this decree a year later.

    People could therefore have exploited that loophole in Section 2(b). However, the propaganda machine created the meme "It is illegal to own gold" for the brainless American.

  10. The amendment of March 9, 1933 to the Trading With the Enemy Act must be repealed as well. This act was used to declare US citizens the enemy of the US government. That's how they stole the gold, by declaring the people the enemy. This is still on the books!

  11. Until now, I thought the expression "Thank Ford" in Brave New World referred to Henry. Maybe not.

  12. This one act by President Ford may make him one of the greatest President's of all time.

    Please see Bob's Quick Guide to the Apostrophe.

  13. FDR was lucky that WW2 got us out of the Depression caused by the Federal Reserve.

    Thanks for Gerald Ford rest in peace for letting us keep our gold and silver.

    End the Fed.

    Government by the government for the government.

  14. Regarding gold as a hedge against hyperinflation, the trick is to convert your gold to dollars _before_ the government confiscates it. Got a fixed rate mortgage? Sell some gold, pay it off! I don't think they will confiscate, anyway, because the amount of gold extant in the civilian population is not nearly enough to worry the central bankers, who still own most of it.

  15. To a large extent, gold's price increase in terms of dollars of about 5.5 times in a little over a decade reflects the metal reasserting its natural role as money, government edicts to the contrary notwithstanding. Money is supposed to serve not only as a medium of exchange but as well as a store of value. If a person buys gold with dollars as a hedge against inflation, is the person investing in gold or simply treating gold as money to store (preserve) the fruits of one's labor in a form that can fulfill that purpose?

  16. Would gold protect you during hyperinflation? If you can take it to a country that is not experiencing hyperinflation, and where gold is valued, then yes, it might protect you. OR I suspect there will be a lot of barter here in the USA. Bartering of things like water filters, seeds for food, guns, ammo, construction materials, food, fuel, and yes, gold and silver may replace paper money if it is becoming worthless.

  17. Our only hope I think is either:
    1) a truly benevolent dictator
    2) single party rule in Washington DC

    The current crop of idiots in DC are going to destroy us.

    I'm not too sure the Republicans would do a good job even if they had control of all 3 branches - they seem more intent on giving tax cuts to their rich supporters, and pushing bible-thumper policy on us than deficit reduction. And of course the Dems do not even understand the need to attempt deficit reduction.

  18. Anonymous (April 8, 2011 2:10 PM), substitute the words "gold and silver" for "gold" in FDR's order.

    Next, abandon the assumption that another such order would be given a number and published. The president's and the president's helpers would not want to attract attention to any such order, which could be politically explosive. Further, communications have improved greatly since the 1930s. It would be easy enough to pass along an order to enforcers through means less obvious to the public than another presidential order yet with credibility sufficient to presuade enforcers that the order is authentic.

    In fact, it wouldn't even be necessary to issue the order to all enforcers in the executive branch but rather only to those whose loyalty is not doubted by the president's inner circle.

    -Anonymous (April 7, 2011 4:34 PM & 6:03 PM)