The Great Gold Confiscation
In 1933, in the darkest days of the Great Depression, Franklin D Roosevelt became President, and immediately made executive orders and instigated major pieces of legislation known collectively as the New Deal. The economy improved rapidly at first then lapsed back into recession.
After the 1929 crash, which spread economic depression around the world, great study was made of the causes and the Chicago Plan was circulated among policymakers, a radical monetary reform document produced by economists at the University of Chicago. Its key proposal actually was the abolition of fractional reserve banking and the institution of full reserve banking, but this proposal wasn’t considered anytime.
Roosevelt’s 1933 Banking Act, and the provisions of it known as the Glass-Steagall Act, separated commercial and investment banking until the era of President Clinton, and restored public confidence in banking again. The Chicago Plan was later revived and a Program for Monetary Reform produced, but it never resulted in anything. But Roosevelt's Banking Acts are held up as a central cause for stability in the US banking system for the first time ever, a stability which lasted five decades and beyond.
There is a letter that Roosevelt wrote in 1933, a year after McFadden’s tirade in the House of Representatives, which helps illustrate the story of this period of American history we’ve been skimming through. This was presumably not a publicly aired view. He said:
The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson — and I am not wholly excepting the Administration of W.W. (Woodrow Wilson). The country is going through a repetition of Jackson's fight with the Bank of the United States — only on a far bigger and broader basis.
letter to Col. Edward Mandell House (21 November 1933); as quoted in F.D.R.: His Personal Letters, 1928-1945, edited by Elliott Roosevelt (New York: Duell, Sloan and Pearce, 1950)
So, for Bank of the United States surely read Federal Reserve. It’s a quote which brings some more credence to McFadden. And if Roosevelt's fight with the Bank was on a far bigger and broader basis than Jackson's fight, then what would it look like now?
All that was surprising enough, but another new piece of history to us, when we realised it really was true, is one of the most astounding stories of all: the story of the Great Gold Confiscation, Executive Order 6102.
This is part of the history of the land of the free! Roosevelt decreed – backed by the threat of huge fines and ten years in prison! – that all the gold held in citizens’ hands was to be surrendered to the government. Neither Roosevelt or his government seem to have had much to do with writing the decree and everyone distanced themselves somewhat. In fact, nobody in politics seem to have actually read it much before passing it into law, including even the Treasury Secretary, who explained it away as what the experts wanted.
People received $20.66 per oz. in cash for their notes. When all the gold had been collected, ceremonially conveyed and safely sealed in the newly built Fort Knox, the price suddenly became $35, which had the chance effect of vastly enriching a few people who can move internationally. That really happened.