The 1933 Gold Confiscation: The Story of Executive Order 6102
In 1933 something happened in the United States that would sound like a conspiracy theory today: owning investment gold became a crime overnight. The story of Executive Order 6102 is one of the most surprising chapters in the modern history of gold and remains one of the arguments why many investors prefer to hold physical metal. Let’s look at what really happened.
The Great Depression and the flight into gold
In early 1933 the US was gripped by a deep banking crisis – people withdrew deposits en masse and many banks collapsed. In response to the uncertainty, many Americans began hoarding gold coins and gold certificates as a safer alternative to bank deposits. This, however, hampered the government’s efforts at monetary expansion and stabilising the banking system, because the US dollar was then pegged to gold at a fixed rate.
5 April 1933: Roosevelt signs Executive Order 6102
On 5 April 1933 President Franklin D. Roosevelt signed Executive Order 6102, which prohibited the “hoarding” of gold coins, gold bullion and gold certificates within the United States. It relied on powers under the Trading with the Enemy Act of 1917, as extended by the Emergency Banking Relief Act of the same year.
What exactly was banned – and the exemptions
It was not a confiscation without exceptions. Exempt were gold and gold certificates worth up to 100 dollars per person, coins with recognised collector (numismatic) value, and gold needed for legitimate industrial, professional or artistic use. Most ordinary citizens, however, had to hand over their gold coins and bars to the Federal Reserve at the then official price of 20.67 dollars per troy ounce.
Harsh penalties for non-compliance
The order set severe penalties – a fine of up to 10,000 dollars (roughly 240,000 dollars in today’s money) and/or up to ten years in prison. In 1933 the fine exceeded the annual income of the vast majority of American households.
The twist nine months later: a 69% revaluation of gold
The most painful part of the story came about nine months later. Citizens who had dutifully handed in their gold at 20.67 dollars an ounce watched in January 1934 as the government raised the official gold price to 35 dollars an ounce – an increase of about 69%. Anyone who had kept their gold until then would have profited from the revaluation; those who complied had effectively given the gain away.
The end of the ban
The ban on private ownership of investment gold in the US lasted more than four decades. Only with a 1974 law were American citizens allowed, from 31 December 1974, to buy, own and trade gold freely again – without any quantity limit.
Lessons for today’s investors
Executive Order 6102 is a reminder that even ownership of physical assets can be regulated by the state in extraordinary circumstances – whether one sees it as a justified crisis measure or as an intrusion on property rights. For today’s investors it is above all a historical lesson about the risk of concentrating all one’s wealth in one place or in a single form of asset. Further historical context is in the article The history of coins.
Frequently asked questions
Could something similar happen again?
It cannot be predicted with certainty. It was a historical event tied to specific circumstances (the gold standard, the banking crisis of the 1930s) – today’s monetary system works differently. History shows, however, that such interventions are not theoretically impossible.
Did the order apply to collector coins?
No, coins with recognised numismatic value were expressly exempt from the obligation to hand them in.
Is there a similar ban in the EU today?
No, there is no such restriction on private ownership of investment gold in the EU today.
About the author
Adolf Baumann, analyst at Baumann Group a.s. (GOLDU), has been working with precious metals for over 30 years. He has seen euphoria, crashes and panic on the markets – and he still enjoys it. He explains in plain language what moves the price of gold and silver and how to handle them without unnecessary mistakes. His weakness? He refuses to wear a suit.
