In 1933, the United States was in the midst of the Great Depression, and President Franklin D. Roosevelt was faced with a difficult decision. The country was suffering from a severe shortage of cash, and the government was struggling to pay its bills. Roosevelt knew that he needed to take drastic action to stabilize the economy, and he decided to do something that had never been done before: he ordered the confiscation of all gold held by private citizens.
The move was controversial, to say the least. Many Americans were outraged at the idea of the government seizing their gold, and some even went so far as to bury their gold in their backyards to keep it out of the government’s hands. But Roosevelt was determined to go through with the plan, and on April 5, 1933, he signed Executive Order 6102, which made it illegal for private citizens to own gold.
The government then began a massive campaign to collect all the gold in the country. Citizens were required to turn in their gold to the government in exchange for paper currency. The government paid $20.67 per ounce of gold, which was the official price at the time. The gold was then melted down and turned into gold bars, which were stored in the vaults of the Federal Reserve Bank.
The move was not without its critics. Many economists argued that the confiscation of gold would lead to inflation, as the government would be able to print more money without the backing of gold. Others argued that the move was unconstitutional, as it violated the Fifth Amendment’s protection of private property.
Despite the controversy, the gold confiscation was a success. The government collected over 500 million ounces of gold, which was worth over $10 billion at the time. This influx of cash allowed the government to pay its bills and stabilize the economy.
But the story doesn’t end there. In 1934, the government decided to raise the price of gold to $35 per ounce. This meant that the government had effectively stolen billions of dollars’ worth of gold from private citizens. To make matters worse, the government then defaulted on its promise to pay back the gold at the original price of $20.67 per ounce.
The government’s default on its promise to pay back the gold at the original price was a controversial move, and it led to a number of lawsuits. In the end, the Supreme Court upheld the government’s right to default, arguing that the gold confiscation was a necessary measure to stabilize the economy.
Today, the gold confiscation of 1933 is remembered as one of the most controversial moves in American history. While some argue that it was a necessary measure to save the economy, others see it as a violation of individual rights and a betrayal of the government’s promise to its citizens. Regardless of one’s opinion, the gold confiscation remains a fascinating and controversial moment in American history.