Posted on 08/13/2008 10:09:35 AM PDT by djsherin
It's been 75 years since the federal government, on the spurious grounds of fighting the Great Depression, ordered the confiscation of all monetary gold from Americans, permitting trivial amounts for ornamental or industrial use. This happens to be one of the episodes Kevin Gutzman and I describe in detail in our new book, Who Killed the Constitution? The Fate of American Liberty from World War I to George W. Bush. From the point of view of the typical American classroom, on the other hand, the incident may as well not have occurred.
A key piece of legislation in this story is the Emergency Banking Act of 1933, which Congress passed on March 9 without having read it and after only the most trivial debate. House Minority Leader Bertrand H. Snell (R-NY) generously conceded that it was "entirely out of the ordinary" to pass legislation that "is not even in print at the time it is offered." He urged his colleagues to pass it all the same: "The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation."
(Excerpt) Read more at mises.org ...
Ditto your comment, but minus the “perhaps”.
bttt
Back in the Nixon days when it was being debated about citizens owning gold again, there were articles about the government seizing gold from citizens when it went off the gold standard during the Roosevelt regime.
One that sticks in my mind was two brothers, who exercized their right to redeem $20,000 in paper money for gold, then at $21 the ounce. Evidently sensing what was coming, they did this a few months before the edict. After the law went into effect, the Feds tracked those guys down and confiscated the gold, giving them $20,000 in paper.
The brothers sued, taking it all the way to the Supreme Court. The Court ruled against them, saying that no harm was done since they got their $20,000 back, conveniently forgetting that gold was now valued at $35 the ounce. That’s whe it became obvious to me that the SC bent to whichever way the political wind was blowing at the time.
An interesting sidebar is that foreign governments could still redeem in gold until the LBJ days when they started a run on Fort Knox. LBJ and Co. talked them into redeeming the equivalent in Silver Certificates and then ran a campaign lambasting the public for hoarding the rapidly disappearing silver coins.
A further government windfall is “seniorage”. That’s the difference in what it cost the government to mint the coin and what the face value is. For instance, today it costs the government 10c to produce a 25c piece, with the difference going into the Treasury as “profit”.
With Every Breath Bernanke Takes . . .
'Benny, Benny - - Please' . . . LOL, LOL !
Roosevelt had heard through Supreme Court back channels that he was going to lose these cases in a 5-to-4 decision with Hughes on the majority side. Roosevelt sent word to the Federal Marshals Service to expect an order from the president not to enforce a Supreme Court decision. Roosevelt made sure that word got to Hughes that the order was on the way.
This would have been an impeacable offense. But who would impeach Roosevelt? His party totally controlled Congress, and the people viewed FDR as their savior. In a constitutional crisis created by that order, Roosevelt would be in a position to destroy the Supreme Court as an institution.
Like Roosevelt, Hughes had once been a governor of New York, and he could count noses as well as the president. He knew that the only way he could save the Court would be to knuckle under to Roosevelt's demands, and that's what he did. In doing so, he unintenionally created the Living Constitution, the document that changes like a chameleon to match its surroundings.
From tiny acorns do mighty oaks grow.
I heard something like that a while back. I’ve also heard that Roosevelt intimidated and black mailed many people working for the government and in various civilian corps positions to register Democrat. It is an absolute shame and disservice to America that this man is so well remembered, and a paradox that the American people love him so much.
Seignorage has always pretty much been around, even when coins were gold and silver. In fact historians claim that this was the impetus for official state coinage to start with, back to ancient times! As found in nature in streambeds and such gold is often found alloyed with silver, called Electrum. I think it averages around 18kt, say. Well the very first coins minted were officially valued at the going “natural” 18kt lump-of-electrum exchange but were far less pure.
Silver prices and gold prices fluctuated at various times and really put commerce through problems because one or the other would become overvalued relative to the other. It became profitable at times to export the coinage for the scrap value, and so they would disappear. Arbitrage, sorta. In those days the way the mints operated, you would bring your bullion to the mint and they would give you back finished coins, minus nominal fabrication costs. Rinse, lather repeat.
The more I learn about FDR, the less I think of him.
Nixon ended the practice of exchanging dollars for gold for central banks. That's when we went to a pure fiat currency. 1973.
Yes, I know, but in those days there was just a slight markup to cover the actual cost of minting. When the clad coins came out though, they still followed the old practice and pocketed the difference - making money out of money, if you will..
OK - but I remember some kind of related swindle going on in the LBJ days. Gotta do some research.
OK - but I remember some kind of related swindle going on in the LBJ days. Gotta do some research.
The swindle in question was called “the London Gold Pool.” Google that.
1971, not 1973.
Thanks! (should have verified before posting. My knack for dates is slipping as I get older)
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