Remembering the US gold confiscation of 1st April 1933...
ECONOMIST Antal Fekete reminds us on 321gold.com today that this is the 75th anniversary of the confiscation of privately-held US gold stocks by the presidential diktat of a certain Franklin Delano Roosevelt, writes Bill Bonner in The Daily Reckoning.
"I remember my grandmother telling me about her sentiments as she was faced with the decision of whether or not to turn in the family gold coins," our friend Byron King tells us.
"Back in 1933, my grandmother was a young widow raising four children during the depths of the Great Depression. She taught school in Pittsburgh and supplemented her living with private tutoring. She had some of her savings in a local bank, and some of the rest in gold coins that she had accumulated over time. Her 'gold' savings added up to about $2,000 – about 50 gold $20 pieces, and various other gold coins of lower denomination – which was a lot of money back then.
"If something had happened to my grandmother, the gold was all that would keep the children out of some orphanage.
"Within a few days of FDR being inaugurated in March 1933, he issued a Executive Order requiring that all citizens and others subject to the jurisdiction of the United States turn in and redeem their gold coins in exchange for an equivalent value of US currency.
"So my grandmother went to the bank and asked the bank manager what he thought she should do. He became very serious, and pulled out a piece of paper. He started reading to my grandmother the possible penalties that she could suffer if she failed to turn in her gold coins. The penalties included prosecution, fines and even imprisonment. So my grandmother – suitably intimidated – took the gold coins out of hiding, and turned them into the bank.
"The US government eventually melted down the coins, into what are called 'gold melt' bars. The paper currency immediately began its long period of depreciation due to inflation..."