America’s gold bullion depository at Ft. Knox, Ky., was built in the 1930s to be impregnable to enemy invasion, but 35 years ago on Sept. 23, 1974, it was invaded by 120 members of a press contingent that I was part of, and a dozen members of Congress and representatives of the Mint and Treasury Department.
It remains a gold-letter day for those who made it to the “A” list and attended, and a bitter day for those who were not allowed into Ft. Knox, but even more so for the journalists who had relentlessly argued, publicly, that the visit would never be allowed in the first place because the government had secretly trucked the gold out.
Even for the jaded, the experience was nothing short of amazing.
Visiting Ft. Knox, then as today, is virtually unheard of. The Treasury and the Federal Reserve, both of whom serve as co-administrators of the facility, have a strong policy against it. Dozens of requests are turned down annually. Even former Presidents are denied entry.
Visit turndowns were efficient and specific: “The Depository is a classified facility. No visitors are permitted, and no exceptions are made.”
No one from the public other than President Franklin D. Roosevelt, who made an inspection trip in 1943, has been inside before or since, the 1974 occasion.
Reversal of this policy on a one time only basis came as a result of a series of peculiar events that resulted in a congressional demand for an audit of the bullion depository, and a first-hand viewing of the gold deposited there.
Prior to Ft. Knox, centralization of the nation’s gold supply in New York was policy until it was recalled that the British seized it during the Revolutionary War and Nazi forces might try to do likewise.
It was determined that a military reservation was needed to act as protector, and that the nation’s gold and silver reserves would be separated. West Point, with the nearby U.S. Military Academy was chosen for silver; for gold it turned out to be the Ft. Knox military reservation outdid Lexington, Ky.
About a year and a half was taken in a project that included 16,000 cubic feet of granite, 4,200 cubic yards of concrete, 750 tons of reinforcing steel, and 670 tons of structural steel.
Gold was transported by caravan across eastern America, reported afterwards in the daily newspapers who marveled at the ingenuity of the building, its interior vaults and symbolic meaning of the original secure location.
The cost of construction was $560,000 and the building was completed in December 1936.
By the end of the Truman Administration in 1952, some $2 billion in gold had been repatriated abroad to our allies. Suspecting that this was not the whole story, the incoming Eisenhower Administration was faced with demands for an investigation and promptly conducted one.
An advisory committee was organized under the directorship of Treasury Secretary George Humphrey, and with the consultation of former Treasury chief John Snyder. Rules were formulated and an audit conducted.
Reporting to the President, the committee said it “was impressed with the evidence of the adequacy and effectiveness of the audit and controls methods that are being followed … Your committee has no reason to doubt the accuracy of the Treasury’s accounts.” For two decades, the result of this audit was accepted.
Vaults were sealed after that audit in 1953.
Vault doors containing this gold really are little more than compartments within the giant vault. They have been sealed with a special tape designed to show breakage and tampering. Hot sealing wax covers both ends, holding them to a card that was signed at the time of the dealing by three representatives of the government.
One persistent rumor that there was no gold left in Ft. Knox resulted in the first opening of the depository to the public in 1974. The cause: Dr. Peter David Beter, a Washington attorney, whose book “Conspiracy Against the Dollar,” makes an attack on international monetary reform and the Rockefeller interests.
Beter charged that “powerful Americans have secretly permitted $20 billion worth of gold to be removed from Ft. Knox.” The weekly publication National Tattler picked up the story, blazed it into headlines, and members of Congress soon began to receive inquiries from constituents.
Ed Busch, of WPAA Radio, Dallas, Texas, gave Beter a forum to continue with his charges. The Treasury initially refused comment, not wishing to dignify the charges by way of rebuttal. Soon, however, congressional pressure for an answer mandated a statement, made informally, that Beter’s view was “ridiculous.”
Heightening suspicion on the part of Beter, and others, was the continued refusal by the Treasury to open the facility for inspection by anyone – including members of Congress.
Reason for this was well-explained by Mint Director Mary T. Brooks, whose Mint bureau had full charge over the depository facility. “The policy against visitors is longstanding,” she commented in an interview with me in 1973.
Security, to be sure, was a dominant factor, but in the minds of some, there could be only one reason: something to hide.
For me, the trip to Kentucky was a long one. Signs up for Ft. Knox press contingent were all over the Louisville airport. Ft. Knox personnel handling the press were present (not terribly large). An army bus awaited to take us to the depository located on the military reservation.
Among those on the bus besides me: Clifford Mishler [then a senior editor at Numismatic News, now ANA president], Robert Simon of the Chicago Sun Times and Bill Barnhill of The Tattler (which started the whole Ft. Knox expose). Joining later: Margo Russell, editor of Coin World, and Jim Miller, publisher of COINage. My position was unique – a freelance writer then taking a day off from law school to have a story of a lifetime.
My notes from that day reflect the times: gas at 50.9 cents a gallon. (It was priced 9 cents higher in New York).
Soon, a sign was visible on the road: Ft. Knox: Home of the 194th Armored Brigade. Traveling along Brandenburg Road turnoff, which leads into the military reservation, there are some railroad spur lines, rusted and weed infested, indicating lack of use. I remember thinking, the gold didn’t get out that way.
As we moved still closer to the fort, however, the spur lines criss-cross the entire area and these aren’t rusted, or weeded, and seem to be well used. I started to wonder.
Helicopters and small aircraft seemed to be in the air all the time.
The bus turned on to Bullion Blvd. The bus continues until it runs into the perpendicular “Gold Vault Road.” One hundred yards, or so, up is Ft. Knox Bullion Depository.
At the entrance to Gold Vault Road was a sign and a large speaker. The sign states in bold, large capital letters: HALT. STATE YOUR BUSINESS IN LOUD SPEAKER. DO NOT ENTER WITHOUT PERMISSION.
Inside, I met up with Charles Stahl, president of the Economic News Agency and publisher of Green’s Commodity Market Comments. I asked him what would happen if no gold was to be found. Stahl said that the price of gold on the free market would rise.
“But there’s no way it’s not here,” he said, noting in addition that it was not even the world’s greatest hoard.
“There’s $60 billion in the Fed in New York,” he noted, “the largest hoard there contains 402 million ounces.” Ft. Knox, he reminded me “has only 147 million ounces.”
Recognizing Rep. Philip M Crane, R-Ill., I asked him why he had suggested a tour of Knox.
“I suggested it because of rampant rumors that significant portions of our gold reserves were gone,” he replied.
“I suggested it to William Simon [Secretary of the Treasury] because, if coupled with an audit, would serve to help gain confidence in the monetary system.
“I’ll be satisfied with the audit,” he said, noting that there was a previous one in 1953, just after President Eisenhower took office.
Crane noted he had held one of the 400-ounce brick (approximately 27 pounds) and noted its worth of $65,000 on the free market.
“Exciting” was the way he put it. “It was impressive how much value can be found in such a small package,” he remarked.
Today, the value of the same bullion cube is worth over $360,000.
Ed Busch, of WFAA Radio questioned Crane closely.
Another member of Congress, Clair W. Burgener, R-Calif., on the House Banking and Currency Committee, was among those present at Ft. Knox. In an interview with me, he said it was both “interesting and educational and reassuring” to have been there.
“Concern by some of my constituents,” was the reason he cited for his presence. “The audit is timely,” he said, noting that it was “over 20 years” since the last one.
“Personally,” he said, “I’m convinced that only a conspiracy or a military invasion could get the gold out of here.”
Other members of Congress arrived for the tour.
Reporters drew sticks to see who went in first. The space is so crowded and limited inside that only small groups could go in. Jim Miller and I were chosen to go in with the congressional delegation.
The guards frisked everyone including congressmen with a sensitive metal detector.
Maneuvering around the narrow corridors, the group entered a large staging area and carefully examined the 20-ton steel vault door – proclaimed “impenetrable” by the guards.
There is a 104-hour time lock on the vault, and, usually, it is kept closed. Since we went off the gold exchange standard in 1971, there was little call for gold from the depository.
(Until Aug. 15, 1971, foreign governments could ask for physical gold in exchange for U.S. Federal Reserve Notes at the rate of $35 a troy ounce, necessitating physical removal.)
Entering the vault, which is the size of a comfortable four room apartment, we saw a dozen compartments spread over two floors. Each was sealed with a special tape designed to show if any forced entry had been made.
Mint Director Brooks took a scissors and prepared to cut the tape, breaking the seal. She did so, and an officer opened the vault.
“I’m very happy to show the country that the gold is here,” she declared.
“I knew it was here, of course.” So did nearly everyone else who came, most believing that the government would never show off an empty vault to the press or public.
Seeing that much gold for the first time is overwhelming. Initially, the glare from the light and flashbulbs on the shimmering metal is blinding
Rep. John Rousselot, R-Calif., was next to me and asked a guard about an unsubstantiated rumor that Beter popularized: that there was an escape tunnel from the building that was used to take out gold bullion.
Indeed, Rousselot was told, there is a tunnel in the lower level. He asks to see it and was rebuffed. An argument ensued going up the food chain to Mint Director Brooks, who approves the visit. I stick by Rousselot’s elbow and take out my camera to start taking pictures.
“No pictures here,” a Treasury official said.
“Why not?” Rousselot demands. “He’s an American!” Pictures allowed.
We found the tunnel sealed and dated as the vaults are. Explained an official from the depository, “All vaults have this type of escape device.” It can only be opened from inside the vault and has an intended use only when the door is shut, the time-lock set and someone mistakenly trapped in the vault.
The escape tunnel is about the size of a sewer pipe, and as Rousselot and other members of Congress noted at the time, it moves horizontally and can only he crawled through with some degree of difficulty.
The seal was broken at the delegation’s request, and the door opened. Conclusion was that the tunnel – which opens inside the depository building, but outside the vault proper – was not a viable means for anyone to try to remove substantial quantities of gold. The escape could only be made outside the vault, not the building itself.
For a coin collector visiting the facility, there was one terribly ironic note. More than a quarter of the gold that was viewed appeared to be coinage gold – .900 fine, obtained from the melting of United States gold coinage.
It was difficult not to be struck by the irony of seeing the end result of the destruction of so many formerly collectible coins.