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By Root 883 0

price would go in large measure to the private gold hoarders and would do nothing to free up the hoards or put them back in circulation. In fact, more people might convert paper dollars to gold bullion in anticipation of further gold price increases, and those hoarding gold might sit tight for the same reason, with their original convictions having already been confirmed. Roosevelt needed to ensure that any gains from the revaluation of gold would go to the government and not the hoarders, while citizens would be left with no forms of money except paper. If gold could be removed from private hands and if citizens could be made to expect further devaluations in their paper money, they might be inclined to start spending it rather than hold on to a depreciating asset.

A prohibition on the hoarding or possession of gold was integral to the plan to devalue the dollar against gold and get people spending again. Against this background, FDR issued Executive Order 6102 on April 5, 1933, one of the most extraordinary executive orders in U.S. history. The blunt language over the signature of Franklin Delano Roosevelt speaks for itself:

I, Franklin D. Roosevelt . . . declare that [a] national emergency still continues to exist and . . . do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the . . . United States by individuals, partnerships, associations and corporations.... All persons are hereby required to deliver, on or before May 1, 1933, to a Federal reserve bank . . . or to any member of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them.... Whoever willfully violates any provision of this Executive Order . . . may be fined not more than $10,000 or . . . may be imprisoned for not more than ten years.

The people of the United States were being ordered to surrender their gold to the government and were offered paper money at the exchange rate of $20.67 per ounce. Some relatively minor exceptions were made for dentists, jewelers and others who made “legitimate and customary” use of gold in their industry or art. Citizens were allowed to keep $100 worth of gold, about five ounces at 1933 prices, and gold in the form of rare coins. The $10,000 fine proposed in 1933 for those who continued to hoard gold in violation of the president’s order is equivalent to over $165,000 in today’s money, an extraordinarily large statutory fine.

Roosevelt followed up with a series of additional orders, including Executive Order 6111 on April 20, 1933, which banned the export of gold from the United States except with the approval of the secretary of the Treasury. Executive Order 6261 on August 29, 1933, ordered U.S. gold mines to sell their production to the U.S. Treasury at a price to be set by the Treasury, in effect nationalizing the gold mines.

In a rapid sequence of moves, FDR had deftly confiscated private gold, banned its export abroad and captured the gold mining industry. As a result, Roosevelt greatly increased the U.S. hoard of official gold. Contemporary estimates were that citizens surrendered over five hundred metric tons of gold to the Treasury in 1933. The gold depository at Fort Knox was constructed in 1937 for the specific purpose of holding the gold that had been confiscated from U.S. citizens. There was no longer enough room in the basement of the Treasury.

It is difficult to imagine such a scenario playing out today, although the legal authority of the president to seize gold still exists. The difficulty in imagining this happening lies not in the impossibility of a similar crisis but rather in the political backlash that would ensue in an age of pervasive talk radio, social media, outspoken cable channel anchors and greatly diminished trust by U.S. citizens in their government. Of these factors, the loss of trust is the most powerful. FDR had his talk radio opponents after all, most famously Father Charles Coughlin, with an audience in the 1930s estimated to be larger than Rush Limbaugh’s audience today. While it was not quite Twitter or