A History of Gold Confiscation
Speculation about the Obama administration confiscating gold, as Roosevelt did in 1933, has recently filled newspapers and blogs. As outrageous as it may seem, the measure is nothing new. After the end of World War II, western households weren’t allowed to own gold bullion. And, Decades before that, people across the world had to face gold nationalization, compulsory purchasing, and guilt-driven donation.
Here are some of the more noteworthy events that might make gold investors sweat:
1. Franklin D. Roosevelt’s Presidential Executive Order 6102 (1933)
On April 5 that year, Roosevelt released an executive order criminalizing the possession of monetary gold by any individual, partnership, association or corporation within the continental United States.
People were required to deliver any gold to the Federal Reserve in exchange for $20 per troy ounce – equivalent to $370 per troy ounce today with inflation
2. Italy’s leader Benito Mussolini passed the “Gold for the Fatherland” initiative (1935)
This involved the donation of rings, necklaces and other forms of gold by Italian citizen in exchange for seal wristbands that read “Gold for the Fatherland.”
35 tones worth of gold was collected then melted down, turned into gold bars and distributed to national banks, in an attempt to combat the country’s economic recession.
To shore up support for public donations it’s said that even Rachele Mussolini donated her own wedding ring to the cause.
3. Germany Takes Czech Gold (1939)
About $97 million worth of gold belonging to the Czechs, and held at the Bank of England, was transferred (read stolen) to the German Reichsbank.
The story goes that after Nazis marched into Prague a communication was sent to the bank requesting the gold be transferred from account #2 to account #17. Despite having been forewarned that any instructions should be ignored, English bankers allowed the transaction to go through which hitch. To mask it, the Reichsbank understated its official reserves in 1939 by $40m relative to the Bank of England’s estimate.
4. Australia’s government makes it legal to seize private citizens’ gold in return for paper money
The ruling, part IV of the Banking Act allowed under the Commonwealth, was “suspended” in Jan.1976.
A statement called ‘Press Released No 29’ by Philip Lynch, treasurer at the time, stated that “gold, apart from wrought gold and gold coins to a limited extent, had to be delivered to the Reserve Bank of Australia within one month of its coming into a person’s possession.”
5. Britain Persecuted gold coin investors
During this period, after Britain left the gold standard, the British pounds was falling – compelling some people to purchase gold overseas.
To stop the pound from falling on the currency markets, the Labour government blocked imports of gold coins and banned a private citizen from owning more than four precious metal coins.
People with a collection larger than four coins had to request a collector’s license and inform the Bank of England. Officers were then to decide whether the owner was a ‘true’ collector. The controls on the gold exchange were lifted 13 years later after Margaret Thatcher administered her first budget reform.