This article was originally printed in the latest issue of Numismatic News.
>> Subscribe today!
When the government nationalized gold coin and bullion some 77 years ago, it gave less than month for Americans to turn in their hoards, allowing an exemption of up to $100 in gold coin per person, and also permitting collectors of “rare and unusual” coin to maintain their collections.
On March 9, 1933, the statute was amended to declare (as it remains today) that “during time of war or during any other period of national emergency declared by the President,” the President may regulate or prohibit (under such Rules and regulations as the President may prescribe) the hoarding of gold bullion. This included gold coinage.
The following day, on March 10, 1933, acting pursuant to the newly emboldened statute, the President prohibited the removal from the United States of “any gold coin, gold bullion, or Gold Certificates”’ except in accordance with regulations. (Executive Order No. 6073, 31 C.F.R. § 120.3)
Presidential Proclamation No. 2038 (48 Stat. 1689 (1933)) sets the stage for all this: “Whereas there have been heavy and unwarranted withdrawals of gold and currency from our banking institutions for the purpose of hoarding; and
“Whereas continuous and increasingly extensive speculative activity abroad in foreign exchange has resulted in severe drains on the Nation’s stocks of gold; and
“Whereas these conditions have created a national emergency; ... [and a banking holiday would be in the national interest]...
“Now, THEREFORE, I, Franklin D. Roosevelt, President of the United States of America, in view of such national emergency and by virtue of the authority vested in me by said Act and in order to prevent the export, hoarding, or earmarking of gold or silver coin or bullion or currency, do hereby proclaim, order, direct and declare that from Monday, the 6th day of March, to Thursday, the 9th day of March, 1933, both dates inclusive, there shall be maintained and observed by all banking institutions and all branches thereof located in the United States of America, including the territories and insular possessions, a bank holiday, and that during said period all banking transactions shall be suspended.”
There is no precise definition of what constitutes a “rare coin.” Executive Order 6260 (issued by FDR on Aug. 28, 1933) recalled all gold coins then in circulation, except “rare and unusual” coins, which were subsequently interpreted to mean as any U.S. gold coin minted prior to 1933.
As to why “rare and unusual coin” was exempted, it probably didn’t hurt that William H. Woodin was FDR’s secretary of the Treasury, and that the elfin man just happened to be a serious coin collector. Born in May 1868, Woodin was general superintendent of Jackson & Woodin Mfg. Co., manufacturers of railroad cars; he later became president of American Car and Foundry Co.
A song writer in his spare time (Johnny Mercer was an early collaborator), the Songwriter Hall of Fame lists a winner in that effort: “SPRING IS IN MY HEART AGAIN, Writer: Johnny Mercer, William Woodin; Publisher: EMI Miller Catalog Inc./Johnny Mercer Foundation.” Another song: the “Franklin Delano Roosevelt Victory March,” which was played at the inauguration.
A lifelong Republican, Woodin met FDR as a fellow trustee of the Warm Springs Foundation; they became friends, and Woodin moved to the inner circle before the 1932 presidential campaign. He was quickly confirmed as Treasury secretary, taking office a day after FDR took the presidential oath, March 5, 1933.
Woodin’s collection of pattern coins became the model for the Adams-Woodin numbering system (used for two generations before Judd superseded it), and he was instrumental in obtaining the collector’s exemption.
Authority to issue these enactments was derived from the Trading with the Enemy Act of 1917 and the Emergency Banking Act, found in title 12 of the U.S. Code in section 95. Even after 1977 amendments to the trading legislation, these other provisions remain in effect.
However, the Emergency Banking Act states what powers the President may invoke during a national emergency with respect to banks that are members of the Federal Reserve System – it does not give the President authority to declare a national emergency for purely domestic reasons.
Originally, the Treasury secretary had the right to issue regulations governing private gold ownership (including coins). That in substance was that “Gold coin of recognized special value to collectors of rare and unusual coin may be acquired and held, transported within the United States, or imported without the necessity of holding a license therefor. Such coin may be exported, however, only in accordance with the provisions of Sec. 54.25” of title 31 of the Code of Federal Regulations.
There were initial provisos as well (which changed over time): “(b) Gold coin made prior to April 5, 1933, is considered to be of recognized special value to collectors of rare and unusual coin. (c) Gold coin made subsequent to April 5, 1933, is presumed not to be of recognized special value to collectors of rare and unusual coin.”
Later changes included these: “The current licensing policy will be retained for coins minted after Jan. 1, 1934. Gold coins may still be detained at Customs stations for examination as to their authenticity. Counterfeit coins may not be imported and are subject to seizure. Restrikes, that is modern reproductions of gold coins bearing a much earlier date, will also not qualify for importation. Therefore, travelers and coin collectors should be especially careful that the coins they purchase abroad are genuine.”
Management of these gold coins was undertaken by the Office of Domestic Gold and Silver Operations of the Treasury Department. Dr. Leland Howard was the first director; Thomas Wolfe was the last to hold the title as the activities of the department were phased out in the early 1980s.
The program of gold confiscation became one of gold melting; the coins were melted into bricks that ultimately found their way to Fort Knox. (Although the Mint had a program from the mid 1860s until about 1950 to melt or re-coin copper, silver and gold coinage, the majority of gold coins were taken in and destroyed in a seven-year period (1933-1939).