Executive Order 6102
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Executive Order 6102 is an Executive Order signed on April 5, 1933 by U.S. President Franklin D. Roosevelt "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates" by U.S. citizens.
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[edit] Effect of the order
Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933 all but a small amount gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($166,640 if adjusted for inflation as of 2008) or up to ten years in prison, or both.
Order 6102 specifically exempted "customary use in industry, profession or art"--a provision that covered artists, jewelers, dentists, and sign makers among others. The order further permitted any person to own up to $100 in gold coins ($1,664 if adjusted for inflation as of 2008; a face value equivalent to five troy ounces of Gold valued at $4800 as of 2009).
The price of gold from the treasury for international transactions was thereafter raised to $35 an ounce. The value of the dollar was thenceforth determined by its value relative to other national currencies.
[edit] Invalidation and reissue
There was only one prosecution under the order, and in that case the order was ruled invalid by federal judge John M. Woolsey, on the technical grounds that the order was signed by the President, not the Secretary of the Treasury as required.[1]
The circumstances of the case were that a New York attorney, Frederick Barber Campbell had on deposit at Chase National over 5,000 ounces of gold. When Campbell attempted to withdraw the gold Chase refused and Campbell sued Chase. A federal prosecutor then indicted Campbell on the following day (September 27, 1933) for failing to register his gold.[2] Ultimately the prosecution of Campbell failed but the authority of federal government to seize gold was upheld.
The case forced the Roosevelt administration to issue a new order under the signature of the Secretary of the Treasury, Henry Morgenthau, which was in force for a few months until the passage of the Gold Reserve Act on January 30, 1934.
[edit] Abrogation and subsequent events
The Gold Reserve Act of 1934 made gold clauses unenforceable, and changed the value of the dollar in gold from $20.67 to $35 per ounce. This price remained in effect until August 15, 1971 when President Richard Nixon announced that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange (see Nixon Shock).
The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373 [2] [3] which went into effect December 31, 1974. P.L. 93-373 does not repeal the Gold Repeal Joint Resolution,[3][4] which makes unlawful any contracts which specify payment in a fixed amount of money or a fixed amount of gold. That is, contracts are unenforceable if they use gold monetarily rather than as a commodity of trade. However, Act of Oct. 28, 1977, Pub. L. No. 95-147, § 4(c), 91 Stat. 1227, 1229 (originally codified at 31 U.S.C. § 463 note, recodified as amended at 31 U.S.C. § 5118(d)(2)) amended the 1933 Joint Resolution and made it clear that parties could again include so-called gold clauses in contracts formed after 1977 [5].
[edit] Deposit seizures
Bank deposits, such as safe deposit boxes held by individuals, were not forcibly searched or seized under the order and the few prosecutions that occurred in the 1930s for gold hoarding were executed under different statutes. One of the few such cases occurred in 1936 when the safe deposit box of Zelik Josefowitz, who was not a U.S. citizen, containing over 10,000 ounces of gold was seized with a search warrant as part of a tax evasion prosecution.[6] In 1933 approximately 500 tonnes of gold were turned in to the Treasury "voluntarily" at the exchange rate of $20.67 per troy ounce.[7]
The U.S. Treasury came into possession of a large number of safe deposit boxes due to bank failures. During the 1930s over 3,000 banks failed and the contents of their safe deposit boxes were remanded to the custody of the Treasury. If no one claimed the box it remained in the possession of the Treasury. As of October, 1981, there were 1605 cardboard cartons in the basement of the Treasury each containing the contents of an unclaimed safe deposit box.[8]
[edit] See also
[edit] References
- ^ http://www.time.com/time/magazine/article/0,9171,746366,00.html Time Magazine, Monday, Nov. 27, 1933
- ^ http://www.time.com/time/magazine/article/0,9171,882486,00.html Time Magazine, Monday, Oct. 09, 1933
- ^ Gold Repeal Joint Resolution, 48 Stat. 112, Chapter 48, H.J.Res. 192, enacted June 5, 1933
- ^ Gold Repeal Joint Resolution as cited in Norman v. Baltimore & Ohio Railroad Co., 294 U.S. 240 (1935)
- ^ [1]
- ^ Josefowitz Gold, Time Magazine, April, 1936.
- ^ Time Magazine, Monday, Nov. 27, 1933.
- ^ Wall Street Journal, October 15, 1981.
[edit] External links
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Wikisource has original text related to this article: |
- PDF of Executive Order 6102 distributed by the Postmaster General.
- Text of Executive Order 6102 from The American Presidency Project.
- 1933 Audio of FDR's Banking Crisis Fireside Chat
