1930s Seizures of Gold Notes--How common was this?

[Nutmeg Coin]

I understand that it was illegal to own gold notes after President Roosevelt's infamous law. How common was it for the citizenry to turn in their gold notes?

[Nutmeg Coin]

http://en.wikipedia.org/wiki/Executive_Order_6102

[mintcollector]

While I can't answer your question directly (the link above should help with that), I will say that in my opinion 'gold certificates' seem to be undervalued right now. I always loved their unique look and cool design (especially the large size notes).

 

Kind Regards,

 

'mint'

[RWB]

 

Presumably, you are referring to the Gold Reserve Act of January 30, 1934.

 

Whenever gold certificates/notes appeared at banks they were exchanged dollar-for-dollar until about 1962 (?) when ownership was permitted again.

 

Most of the value of “gold hoards” consisted of paper notes, not coins. Whenever these were surrendered to Treasury Agents a list of serial numbers was made, then the owners were taken to a local bank for exchange. $5,000 and $10,000 notes were prevalent in hoards.

 

 

[Weg]

"Most of the value of “gold hoards” consisted of paper notes, not coins"

 

This is a real surprise to me; I can see hoarding gold coins, a person would have the real thing in their hands. Hoarding paper gold notes is something I can not see the logic of.

[RWB]

Paper gold notes circulated. Little gold coin circulated except in the far west. When gold was nationalized, most of the coin was already in the Treasury or under Treasury control.

 

A similar situation existed from 1917-1921, when Treasury simply refused to make or issue gold coins, and actively kept gold notes out of circulation. Restrictions were lifted in 1922, but few people went back to gold coins.

 

Nearly all of the public reports of "gold in circulation" included coins and paper. Superficial reading of these has thoroughly confused collectors for decades.

 

(The book National Gold will focus on the gold coins and where they came from and the fate of most of them.)

 

[comicdonna]

Very interesting topic!

[Nutmeg Coin]

When you have a thoroughly unconstitutional law, not even the government agents will enforce it unless you have criminal tie-ins. We see this with IRS-CID; basically they target, tax evasion, for example, if there are connections to illegal drugs, or provable fraud beyond just people trying to pay less in taxes.

 

I have not seen specifics of how the law was enforced. The original law was ostensibly geared to discourage hoarding, but the wording of the law said that all bank safe deposit boxes were sealed and could only be opened with a treasury agent as inspector!!!

[RWB]

Your first paragraph seems to be an emotional statement of opinions, not facts. There's no point to trying to figure it out. As to the second paragraph:

 

Laws are enacted by Congress and enforced by the Executive. The Executive also prepares regulations that allow enforcement of Congress' laws. The Supreme Court acts as arbitrator when there is a question about the constitutionality of a law or the enforcement actions. It isn't "perfect" but it works a lot better than in most places.

 

The April 1933 Executive actions, in concert with acts of Congress in 1917 and the emergency powers, were aimed at the hoarding of gold metal and gold-denominated instruments. The problem was twofold: 1) preventing export of gold thereby removing it from circulation, and 2) hoarding of all types of currency which effectively removed it from domestic circulation and restricted trade. Previous attempts by the Hoover administration to restrict gold hoarding were unsuccessful because the actions were voluntary. Neither Hoover nor Roosevelt had the legal tools necessary to attack the basic problems of credit constriction and speculation. (Both of these came back to cause a Depression in 2007 after laws enacted to prevent these abuses were countermanded by Congress.)

 

As to enforcement, Treasury Agents enforced the executive orders and 1934 Gold Act. (Many were former prohibition agents.)

 

The Hoover administration in December 1932 had begun recording the names and addresses of all who withdrew gold from banks. In May 1933, agents investigated business and individuals whose names appeared on these lists. Out of thousands of names, many were fake, others had deposited gold as a normal part of business and in the end only a few hundred were actually investigated. Total prosecutions were less than 50 for the country, and most were of foreign nationals trying to hide gold for export.

 

The safe deposit box “inspection” applied only to those with names on the list or who otherwise brought attention to themselves.

 

Other enforcement investigations occurred only when there was a complaint or someone brought attention to themselves. Over half of all investigations through 1947 originated with a relative or someone who wanted to “get even” with another person.

 

As this might help some understand, superficial examination of actions results in superficial and usually inaccurate assumptions. If one has “not seen specifics of how the law was enforced” and has not understood how “the original law was ostensibly geared to discourage hoarding” or read and understood executive orders, law and regulation, then accurate conclusions cannot be made.

 

The whole episode is difficult to follow and at the time was just as confusing as at present. But it is important for modern numismatists to get beyond the superficial hyperbole, “gold bug” hand wringing, and doomsday people, if they are to understand the reality of actions and consequences.

 

 

[Nutmeg Coin]

Thanks for your comments; I was just trying to make sense out of the Wikipedia article, which did not have enought information for me.

[RWB]

Wikipedia is not a reliable source. Too many "cooks" with their own versions of "broth." Articles change from week to week as different people seek to bend the truth to their own purposes. That is especially the case with anything involving money, stocks, finance, politics or religion.

 

[My grad students receive an automatic “F” if any citation flows to Wikipedia.]

 

[coinman_23885]

Wikipedia is not a reliable source. Too many "cooks" with their own versions of "broth." Articles change from week to week as different people seek to bend the truth to their own purposes. That is especially the case with anything involving money, stocks, finance, politics or religion.

 

[My grad students receive an automatic “F” if any citation flows to Wikipedia.]

 

What do you teach and at which university?

 

I agree 100% regarding the relative worthlessness of Wikipedia. Anyone with a keyboard and an internet connection can write an entry.

[Nutmeg Coin]

Wikipedia is not a reliable source. Too many "cooks" with their own versions of "broth." Articles change from week to week as different people seek to bend the truth to their own purposes. That is especially the case with anything involving money, stocks, finance, politics or religion.

 

[My grad students receive an automatic “F” if any citation flows to Wikipedia.]

\

 

Wikipedia is a good starting point for discussions on many topics. While I appreciate your contribution here, RWB, it is brimming with professional arrogance which is a huge obstacle to learning. I have seen it over and over again when those who are experts exude attitude with their significant abilities.

 

I spoke with Barbara Gregory at the ANA and shared how there are vast areas of unaddressed but serious matters by numismatic publications on accountability to various state and federal authorities and their laws designed to interdict fraud. I have known numerous dealers having to pay back taxes or suffering unnecessary fears because of such unaddressed issues.

 

CS Lewis had this to say on pride and arrogance, it bears repeating because this is a stumbling block for the vast majority who truly want to learn distant history about how the laws were applied, as they want to know about many other subjects that I am sure professors such as yourself are qualified to teach them in a genorous fashion:

 

"..it is Pride which has been the chief cause of misery in every nation and every family since the world began. Other vices may sometimes bring people together: you may find good fellowship and jokes and friendliness among drunken people or unchaste people. But pride always means enmity - it is enmity. And not only enmity between man and man, but enmity to God.

 

"In God you come up against something which is in every respect immeasurably superior to yourself. Unless you know God as that - and, therefore, know yourself as nothing in comparison - you do not know God at all. As long as you are proud you cannot know God. A proud man is always looking down on things and people: and, of course, as long as you are looking down, you cannot see something that is above you."http://www.btinternet.com/~a.ghinn/greatsin.htm

 

 

[RWB]

Sorry that you do not care for reality, Nutmeg.

 

You asked questions, and I attempted to help with honest answers. There's no arrogance except from your perception - it's simply that I have done the deep research and you have not.

 

Try examining things more deeply than the superficial "Wikipedia world"....that might be more helpful to you than copying from the first Google hit you see, and thereby demonstrating you don't really understand what you copied from C. S. Lewis.

 

[Nutmeg Coin]

I have heard teachers in the Middle schools with the same bias against wikipedia who tell their students it is not reliable. What have I seen in the middle schools in terms of serious students? Virtually none, so to tell such students encyclopedias or newspapers are not reliable documentary sources is a disservice at that level. Even at the high school level it is not unhelpful for students to consult all relevant research material for their course work. A college degree, by some estimates, is equivalent to what a high school diploma was 40-50 years ago. So we are not talking serious scholarship until we get to the serious college level. My degree was from a good Jesuit college (now university), but not totally at the level of a Georgetown or Boston College.

 

Is Wikipedia incompetant in some subjects? Absolutely. But they have done a huge job of trying to fill the gaps on so many areas, I could cite dozens of topics where they have done good work.

 

The right thing to say is that it can be a useful source of information based upon who is doing the oversight and editorial work. They have competant researchers.

 

In my course work I never cited encyclopedias, only books and professional periodicals. But to knee jerk, and kick whenever you see Wikipedia cited and give a failing grade may not be helpful.

[RWB]

Wikipedia is not a reliable academic source. That is the simple, direct truth. Of course, on the whole no general "encyclopedia" is either. In the computational sciences Wikipedia is better than in the humanities or history, and is usable for middle school and some high school references.

 

One of Wikipedia's good points is as a rough index to more rigorous sources....much as Google is an index of internet locations: starting points, not end points.

 

[Nutmeg Coin]

We may be comparing apples with oranges. In terms of real academic 100% rigor, I would say you need the original sources. How are you going to truly learn about the Pilgrim colony at Plymouth without reading Bradford's original journals and actually, physically visiting there and actually seeing what the physical geography.

 

On the subject of tax protestors, Wikipedia has this article: http://en.wikipedia.org/wiki/Tax_protester_(United_States)

 

Is it academically accurate and rigorous. I would say yes. Where are you going to find a good source for an overview on this subject? If you type in the phrase to a search engine you are going to have all types of perspectives of articles dealing with the subject. Wikipedia does a good job of encapsulating the essentials.

 

[Bill Collector-migration]

I understand that it was illegal to own gold notes after President Roosevelt's infamous law. How common was it for the citizenry to turn in their gold notes?

 

I don't think it was a common thing to do for the simple reason that there seems to be more that enough of them for collectors to pick from in almost any condition they may want or need.

Bill Collector

[newprepper]

"Most of the value of “gold hoards” consisted of paper notes, not coins"

 

This is a real surprise to me; I can see hoarding gold coins, a person would have the real thing in their hands. Hoarding paper gold notes is something I can not see the logic of.

 

What do you think the Gold ETF's are, They don't have all that gold held anywhere, biggest pyramid around, and its ready to come crashing down

[L1ncolnF4n]

Wikipedia is not a reliable academic source. That is the simple, direct truth. Of course, on the whole no general "encyclopedia" is either. In the computational sciences Wikipedia is better than in the humanities or history, and is usable for middle school and some high school references.

 

One of Wikipedia's good points is as a rough index to more rigorous sources....much as Google is an index of internet locations: starting points, not end points.

 

I'm shooting myself in the knee here by getting involved in this argument, but I just want to toss in my 2¢.

 

We know Wikipedia isn't an authority on things, but it IS UNDENIABLY a starting place to get a general picture of various different areas. I just graduated and used Wikipedia extensively, though as you'd previously mentioned, my use was primarily limited to computational sciences, particularly Markov theory and combinatorial theory too. My professors even recommended Wikipedia for getting a better understanding of these topics.

[Nutmeg Coin]

I think it was Voltaire who said it. "The perfect is the enemy of the good". If we strive for perfection from the get go, we will be constantly letting obstacles be in our way. Some people have comprehensive knowledge of so many subjects; I am in awe of them. For the rest of us mortals, we need people to point us to this book or point us to that book so that we can fill out our education. In numismatics they say buy the book before you buy the coin. And we should be doing that, Redbook is a good starting point for coins and the Friedberg book for currency but they barely skim the surface. What I have come to learn the hard way is that getting the knowledge we need at any given time can really be a challenge or a knowledgeable dealer who can go over the subject matter in a lucid way.

[KPARKE]

HI, I was reading this thread, and would like to add some info that I had read about the gold seizures.I figure if someone else had read about it, then it may be true.

Knowing that having the treasury tied to how much gold they had, the government had to do something to BOOST the economy and pay their debts.

Confiscation of Gold allowed a two fold thing to happen,

One it gave the Government a blank check (FIAT MONEY) to print as much money as it needed to pay for the things it wanted to do. They no longer had to worry about money flow and availability. It also Did help the depression. It IS a fact that the recessions are far less severe than when we were on the gold standard.

Two, I had also read that the government sold a lot of gold overseas at higher prices and thus paid off the treasury debt.

Also of late, I have read that there is in place a decree that in a national emergency they come in, close the banks and seize all assets in safety deposit boxes, take all ammo, and money, including gold, silver, and platinum. The bank presidents know this but are prohibited from divulging this to the public.

 

So, Has any one else heard any of this ? or is someone just blowing smoke?

I do like the information supplied though, this I have not read about. BY RWB!

I look forward to anyone's information, Thank you in advance.

[Nutmeg Coin]

It will never happen again. I got an email today from Mr. Sinclair who knows every aspect of the metal markets and government actions commenting on Richard Russell (another mega gold bull). If you think the country is politically divided now just wait to see what would happen if you had widespread attempts to seize precious metals. But we do continue to have IRS seizures of assets of tax protesters and tax delinquents which is the closest thing we will probably come to this.

 

http://www.ct.gov/drs/cwp/view.asp?a=1453&q=328618

 

http://www.justice.gov/usao/ct/Press2012/20120626-1.html

 

RWB is of course the authority on this issue on this site and could go in depth into particulars on a year by year basis.

[KPARKE]

Thank you Nutmeg Coin. After looking over the links, I am surprised that they are not already there with their Thompson' s confiscating everything.

I know, If I owed that much they would have already had me! !

I will sleep a little better, but not when the dollar crashes!

 

 

[Nutmeg Coin]

Usually they tailor the raid to the situation. With the gun-toting tax cheats they usually will do a pre-dawn raid with klieg lights, or at least that's what they used to do. You can run but you can't hide...usually.

[19Lyds]

Wikipedia is not a reliable source. Too many "cooks" with their own versions of "broth." Articles change from week to week as different people seek to bend the truth to their own purposes. That is especially the case with anything involving money, stocks, finance, politics or religion.

 

[My grad students receive an automatic “F” if any citation flows to Wikipedia.]

\

 

Wikipedia is a good starting point for discussions on many topics. While I appreciate your contribution here, RWB, it is brimming with professional arrogance which is a huge obstacle to learning. I have seen it over and over again when those who are experts exude attitude with their significant abilities.

 

I spoke with Barbara Gregory at the ANA and shared how there are vast areas of unaddressed but serious matters by numismatic publications on accountability to various state and federal authorities and their laws designed to interdict fraud. I have known numerous dealers having to pay back taxes or suffering unnecessary fears because of such unaddressed issues.

 

CS Lewis had this to say on pride and arrogance, it bears repeating because this is a stumbling block for the vast majority who truly want to learn distant history about how the laws were applied, as they want to know about many other subjects that I am sure professors such as yourself are qualified to teach them in a genorous fashion:

 

"..it is Pride which has been the chief cause of misery in every nation and every family since the world began. Other vices may sometimes bring people together: you may find good fellowship and jokes and friendliness among drunken people or unchaste people. But pride always means enmity - it is enmity. And not only enmity between man and man, but enmity to God.

 

"In God you come up against something which is in every respect immeasurably superior to yourself. Unless you know God as that - and, therefore, know yourself as nothing in comparison - you do not know God at all. As long as you are proud you cannot know God. A proud man is always looking down on things and people: and, of course, as long as you are looking down, you cannot see something that is above you."http://www.btinternet.com/~a.ghinn/greatsin.htm

 

While I find RWB's responses to be "brutally" honest due to his endless research through the National Archives, I've never considered them to be arrogant or prideful.

 

Many folks are unaware that ignorance is a tool which we shape ourselves and then use against ourselves. When it comes to pride and arrogance, those tools are also used by the ignorant to retain their ignorance. Its called a difference of opinion based upon feelings and not necessarily facts.

[Nutmeg Coin]

My comment was directed as a defense of Wikipedia which has evolved as an excellent resource for information. They have highly qualified researchers who have selflessly worked on and revised articles on all manner on subjects. Academic research is a highly competitive field and there are literally thousands of researchers who are working to bring to light subjects that have been neglected, no one is the final expert on a given subject or has a corner on the truth. The best professors I had in earning my degree combined a love of learning with intellectual rigor as well as a spirit of service and humility. I never used an encyclopedia in a college research paper; that should be a given. If you do a random internet search on a given topic will you get a good, relatively unbiased synopsis of a subject? It's a grab bag with such searches and frankly Wikipedia does offer an excellent resource as an overview, for the 95% of the public who are looking for that.