When Franklin Roosevelt was elected in 1932, public confidence and support for the nations banking system was at an all time low. Roosevelt’s campaign capitalized on Hoover’s failings and promised a new approach to the economic crisis.
During the banking panics in 1930, 1931, and 1933, the Federal Reserve failed to provide adequate liquidity to struggling banks. This inaction led to numerous bank failures, and a significant reduction in the overall money supply as people were hoarding gold coins at home.
Just one day after taking office, by referencing an old World War I statute called the “Trading With The Enemy Act” of 1917, Roosevelt essential declared war on ordinary American citizens when he declared a four day bank holiday and closed all banks including the Federal Reserve.
A few days later, the Emergency Banking Act was signed into law which gave Roosevelt an unprecedented amount of power and control over the economy.
Just a month later, Roosevelt signed Executive Order 6102 mandating all American citizens to hand over their gold in all forms, including bullion, coins and other forms over to the US Treasury.
Public Response to EO 6102
During his “fireside chats”, Roosevelt portrayed the gold confiscation as a patriotic duty, suggesting that citizens should support the government’s efforts to revive the economy.
Millions of ordinary citizens were forced to hand over their gold or face prosecution from the federal government. In exchange, the government “generously” compensated people at the mandated gold price of $20.67 per ounce.
The executive order immediately ordered the US Mint to destroy all newly minted 1933 gold coins. Except for twenty coins were documented to be stolen.
Citizens were allowed to keep a nominal amount of gold, up to $100 worth of gold. In those days, that was the equivalent to just five $20 St-Gaudens Double Eagle Gold Coins. Today, those five coins are worth more than $12,000.
After the order, the US effectively went off the gold standard and allowed the Federal Reserve to increase the money supply by printing more fiat currency. Just thirty years after the establishing the Federal Reserve in 1913, Roosevelt signed over control of the economy to a cartel of bankers that profit from the debt that gets created by the government.
Exceptions to the Gold Confiscation
The exception allowed citizens to continue to own small amount of gold jewelry and up to $100 in gold coins.
There were exceptions for gold coins considered to be collector coins, those having numismatic value or being rare of unusual.
A 1934 issue of The Coin Collector’s Journal featured an advertisement from a local coin shop in New York City selling uncirculated $2.50 quarter eagle gold coins from the 1920s for $4.50, a premium of 180%.
With other denominations showing similar premiums due to the devaluing of the dollar by increasing the price of gold from $20 to $35 per ounce of gold.
Many investors looking for the stability of gold became coin collectors practically overnight. In addition to maintaining their intrinsic value today, these gold coins carry cultural heritage and historical significance. American’s during that time understood the true value of gold.
In today’s market it is common to find Pre-1933 gold coins that may have an added jewelry clasp, which became a common way for citizens to continue to hoard gold. These bullion coins often have lower premiums and can be a cheaper option when compared with graded collectibles.
One of a Kind 1933 St Gauden’s $20 Double Eagle Gold Coin
One of the stolen coins was sold to King Farouk of Egypt, which was lost for decades before being turned over to the FBI by coin dealer from London named Steven Fenton in 1996.
The one of a kind 1933 St Gauden’s $20 Double Eagle gold coin eventually became legalized and was first auctioned by Sotheby’s in 2002 and was purchaed y shoe designer Stuart Weitzman. The coin hit the auction block again 2021, fetching more than $18,000,000.
