Gold Confiscation: What Happened in 1933?People who scoff at the suggestion that the government might restrict private gold ownership should remember that many other countries have restrictions on (or absolute prohibitions against) private gold ownership. They should also remember that, in 1933, Franklin Delano Roosevelt dealt with a monetary and banking crisis by confiscating all privately owned gold; paying for the gold at $20.67 per ounce; immediately devaluing the dollar by 40 percent; and setting the price of gold at $35.00 per ounce. At a single stroke, Roosevelt increased the government's gold assets, stabilized the monetary system and increased wholesale prices by more than 33 percent. However, he also inflicted losses of 40 percent on gold owners and stripped them of the gold that they saved to insure their financial futures. Franklin Delano Roosevelt was inaugurated during the depths of The Great Depression. Anxious Americans, demanding gold, had reduced the Federal Reserve's gold supply almost to the legal minimum, creating additional fears of an impending monetary crisis.
At the time, the United States still adhered to the gold standard, which provided for fixed exchange rates between currencies and gold and made gold an alternative form of currency. The international gold standard had been one of the first casualties of World War I, but enjoyed a brief revival after the War. It disappeared for good in the legislative circus that served as the coming-out party for the Roosevelt administration. On March 6 of 1933, the President set in motion a chain of events that ended the international gold standard once and for all. First, he closed the nation's banks and prohibited them from paying out or exporting gold coins and bullion, using emergency powers granted by the Trading with the Enemy Act that had been enacted during World War I. When it was called to the President's attention that there was no legislative justification for either the executive or the legislative branch of government to close privately owned banking institutions, he prepared legislation to confirm what he had already done. Three days later, he sent to the 73rd Congress the Emergency Banking Relief Act, which sought to amend the Trading with the Enemy Act and specifically those provisions which authorize the President in times of war to "investigate, regulate, or prohibit... the importing, exporting, hoarding, melting or earmarking of gold... " The change made by the Emergency Banking Act was to provide the President with authority to act "during any other period of national emergency declared by the President," thus expanding his authority beyond the limitation of actual war. The Act also vested the Secretary of the Treasury with the discretion to compel holders of gold to surrender it. The very next day, acting under the authority of the Emergency Banking Relief Act, President Roosevelt issued Executive Order No. 6073. In addition to authorizing the Secretary of the Treasury to decide which of the nations' banks could open, the Order prohibited owners of gold from exporting or otherwise removing it from the United States. Shortly thereafter, also under the authority of the Emergency Banking Act, the President issued Executive Order No. 6102, which provided that all privately owned gold in the United States was to be confiscated by the government. As compensation, the owners would receive paper money. For a copy of the Complete Gold Confiscation Report,
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