The Humble Libertarian

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Friday, April 6, 2012

The Great Gold Robbery

James Bovard documents Roosevelt's gold seizure.
In 1936 Franklin Roosevelt declared, “I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. . . . I should like to have it said of my second Administration that in it these forces met their master.”
What Roosevelt neglected to say was that the Federal Reserve and Wall Street were his masters. Yet, Roosevelt proceeded to confiscate privately owned gold by invoking the public good. Bovard goes on to explain:
One of the most controversial New Deal policies was the seizure of citizens’ gold.[2] During the Great Depression, several foreign nations repudiated their promises to redeem their currencies for gold. In 1933, when Roosevelt became president, the United States had the largest gold reserves of any nation in the world. He announced on March 8, 1933, a few days after taking office, that the gold standard was safe. But three days later, he issued an executive order forbidding gold payments by banks; Treasury Secretary Henry Morgenthau, Jr., announced on March 11 that “the provision is aimed at those who continue to retain quantities of gold and thereby hinder the Government’s plans for a restoration of public confidence.”[3] Thus, according to Morgenthau, any limit on government power was bad for public confidence.
Roosevelt would have never forbade gold payments by the banks had the banks not demanded it. But why? Roosevelt's act to ban gold payments by the banks created the 1933 panic; folks lost confidence in the monetary system and started stockpiling gold.
The ban on bank gold payments created widespread doubts about the Roosevelt administration’s intentions. Ogden Mills, who had served as President Herbert Hoover’s treasury secretary, observed that “it was not the maintenance of the gold standard that caused the banking panic of 1933 and the outflow of gold. . . . [I]t was the definite and growing fear that the new administration meant to do what they ultimately did—that is, abandon the gold standard.”[4] People naturally sought to get rid of their paper currency and to put their savings into something with more secure value—gold.
The Federal Reserve (Wall Street banksters) couldn't bear the thought that folks were onto them and sought to protect their wealth by converting their paper currency into gold so the banksters got Roosevelt to just outright confiscate all privately owned gold. Bovard explains:
Fear of devaluation spurred a panic, which Roosevelt invoked to justify seizing people’s gold. On April 5, 1933, Roosevelt commanded all citizens to surrender their gold to the government. No citizen was permitted to own more than $100 in gold coins, except for rare coins with special value for collectors. Morgenthau announced on the same day that “gold held in private hoards serves no useful purpose under present circumstances.”[5] Gold was thus turned into the same type of contraband as Prohibition-banned rum.
Roosevelt even went so far as to state that the gold seizure was only intended to be temporary because of an emergency.
Roosevelt assured the country: “The order is limited to the period of the emergency.” But the order stayed on the books until 1974. Roosevelt labeled anyone who did not surrender his gold a “hoarder.”
Bovard makes the analogy between Roosevelt and Stalin.
Roosevelt used the same “hoarding” rhetoric against anyone who owned gold that Stalin used against Ukrainian peasants who sought to retain part of their wheat harvest to feed their families. But while Stalin sent execution squads to kill peasants who had a few bushels of grain hidden in their hovels, Roosevelt was kinder and gentler, seeking only ten-year prison sentences and $250,000 fines for any citizen who defied his edict and possessed more than five Double Eagle gold coins.
While Democrats are notorious for extolling the great and wise virtue of Roosevelt, Roosevelt was just a common thief who stole from widows and orphans as Bovard explains by quoting a U.S. Senator.
Senator Carter Glass of Virginia, chairman of the Senate Finance Committee, denounced the gold seizure: “It’s dishonor. This great government, strong in gold, is breaking its promises to pay gold to widows and orphans to whom it has sold government bonds. . . .”
Read the entire article here