There was an executive order #2039 that pre-dates your "Gold Act of '34" reference, Bob. That E.O. did NOT exempt coins from the austere confiscatory requirements.. That lack of discrimination caused a hue and cry amongst the gold holders and numismatists of that day and time!
The President listened, amended his first order thereby exempting numismatic coins. Interpretation was
left up to the IRS agents who, with the mandated assistance of someone of bank management level achievement,
called in each depositor who had a safety deposit box. That box was required opened in the presence of both
"agents" (the IRS one and the agent for bank management)---the contents inventoried, and gold removed on the
spot and paid on the spot in fiat.
AFTER that confiscation was concluded, THEN the act Gold Act of '34 re-jiggered the value of the reserves as you stated.
The lack of clarity about the two DIFFERENT acts is the source of the most confusion in regards to this period of confiscation.
And just to be clear: This Act was the culmination of the Attack on the USFed Reserve conducted by none other than the French under the administration of Fr. Premier Laval during Hoover's waning presidential term.
For more detail, please refer to my previous posting/cite Jan 3, on another SI thread...:
There is one glaring difference between a potential gold confiscation worries now and the reality of the one back in history.
That is the CONTEXT of the previous confiscation.
That contextual setting is most often ignored in popular press and by present pundits in recent vintage discussions. If I may, I'd like to nutshell it for you.
) The US Gov't naively guaranteed Germany's official war reparations to France after WWI in 1917.
2) The first guarantor of Germany making those payments was Great Britain.
3) The German's defaulted (of course)...and the French raided the UK treasury and broke the Pound Sterling as the result.
4) The Pound Sterling was decoupled from the physical backing of the GOLD @ 4.86 Pounds to the oz as the result.
5) So, France moved to the second guarantor, the USA.
6) There began a series of demands upon the NY Fed to pay IN GOLD the defaulted payments by the Germans and now the defaulted British. We paid up and paid up and paid up and paid up...UNTIL Oct 1931.
One of the BEST factual chronicles of this series of events was then codified by none other than the then current Saturday Evening Post magazine, a much loved former US institution, (probably best known by those over 40 years of age, for their series of nostalgic Rockwell cover art.)
The nutshell above is found within approximately 12 issues from Spring 1931 through Spring 1932. That series was originally published under the title: A Bubble That Broke The World, 1932, by Little Brown and Company, and re-released in 1996 by Fraser publishing house.
I would draw your attention to the pages 110 thru 121.
Bottom Line?
France made one last over-reaching grab for US NY Fed Gold backing OUR currency at the time of the presidential
transition team from the Hoover administration to the incoming Franklin Delano Roosevelt administration in order to try to embarrass the yet to be inaugurated US President FDR, as well as the lame duck outgoing Hoover..
You see, France owed us, yes, the USA,$ 3.75 BILLIONS in WWI reparations which she was refusing to pay because Germany wasn't paying France, and guarantor U.K. had folded. At the same time France owed USA, she was demanding $600,000,000 from us in German defaulted payments. The French hutzpah was astounding!
This is part and parcel of the historical basis for the hatred and disgust of US government of the French currently being played out on the world stage in the Security Council antics of the United Nations over Iraq.
The transition team conspired with the NY Fed, and personally handed the then-on-US-soil-to-collect-in-person-and-return-to-France-with-the-booty the hated French Prime Minister M. Laval, his head; Laval went home with his barren entourage of ships dispatched earlier to return, laden with US gold one more time, embarrassed and empty handed.
The New York Times chronicles it in this manner on Oct 26, 1931:
OPEN QUOTE:
"In a cautious way, the joint statement made known that President Hoover and Premier Laval had determined that their two governments should stand together in their maintenance of the gold standard. Among the things accomplished were the reassurance by Premier Laval that abnormal movements of gold from New York would be stopped, and that re-examination of German's capacity to pay reparations should be made under the existing provisions of the Young Plan, with the United States deferring action on a survey of European debts to determine the capacity of debtor nations to pay until after a Young Plan committee has reported on Germany's financial position."
CLOSE QUOTE.
Outgoing/lame duck Pres. Hoover knew the USA HAD to replenish our gold reserves. The Hoover/Roosevelt transition team masterfully used the element of surprise which the French did not expect:
On March 6, 1933, just two days after his inauguration, Pres. Roosevelt launched the famous "100 Days." With Presidential Proclamation (E.O. # 2039), Roosevelt declared a Bank Holiday, closing the nation's banks, prohibiting the payment of gold IN ANY FORM, and putting an embargo on the export of all gold. The Laval chartered steamship, S.S. Paris, whose specially rebuilt hold was ready to receive nearly 14 tons of gold, sailed,
empty of bullion."
Roosevelt acted the only way he knew how and with considerable cooperation of both sides of the aisle and both outgoing and incoming administrations. This is what historians and "hysterians" call THEEEE "confiscation..." which was immediately followed by a revaluation of gold from the then $20.67 peg to the $32 peg in order to stay on the gold standard just agreed to, a few days earlier joint communique with the French's Laval and outgoing President Hoover.
As Roosevelt himself, later wrote: For nearly two months prior to my inauguration, I had discussed with a number of people the gloomy banking situation toward which the country had been drifting for some time...The crisis was being intensified by an ever-increasing wave of withdrawal and hoardingof gold. This became more and more marked during the two months immediately before inauguration."
The public response to this confiscation is also left out of most post 1934 discussions, as well, Bob.
The public response to the President's E.O.2039 was overwhelming. In NY City, the first day after the hoarding policy was announced, long lines stretched outside the NY Fed Rs and some $30,000 in $20.67 valued gold AND gold certificates was returned. An unnamed business firm returned $6,000,000 --290,275 t/oz-- in bullion, while a single businessman personally turned in $700,000.--33,865 t/oz. The response across this great nation was equally robust and eventually some $300,000,000 --14, 513,788 t/oz and gold equivalents-- in gold coin and "yellow notes" was safely stored in government coffers. It appears to have been a successful bank holiday with the voluntary surrender of 497.6 tons of physical gold and yellow gold demand notes combined which were restored to the French looted US governmental coffers.
The bank holiday was extended at the pleasure of the President, and three days later, on March 9th, COngress passed a bill approving and confirming Pres. FDR's actions. Over the next few months, a series of E.O.'s were issued to tighten the rules and allow for specific exemptions."
Ultimately on Jan 30, 1934, these individual regs and presidential E.O.s were condensed, codified, and passed into law by Congress as the Gold Reserve Act of 1934 to wit you refer, Bob.
It is my hope this contribution to your knowledge base adds contextual framework re: this fascinating 1931-1934 time frame from which you are currently expositing and extrapolating.
gold_tutor |
