FDR’s Silver Nationalization 1934

FDR A large portion of gold bullion buyers have either heard of or know about President Franklin D. Roosevelt’s 1933 Executive Order 6102 when the US government outlawed large private gold bullion ownership.

Many silver bullion buyers are yet unaware of the President Roosevelt administration’s Executive Order 6814 which occurred over one year later.

Shortly after Executive Order 6102 was put into action the US dollar was devalued to gold by more than 65% in the hope of springing the nation out of the deflationary depression it had suffered under for years during the Great Depression. In the decree private citizens were barred from owning more than $100 in gold coin (roughly no more than 3 oz after the full US dollar devaluation went into effect against gold).

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Shortly after Executive Order 6102 was put into action the US dollar was devalued to gold by more than 65% in the hope of springing the nation out of the deflationary depression it had suffered under for years during the Great Depression. In the decree private citizens were barred from owning more than $100 in gold coin (roughly no more than 3 oz after the full US dollar devaluation went into effect against gold).

 

The Roosevelt administration’s Executive Order 6814 was an effective nationalization of all domestically mined silver and privately owned silver bullion. Exceptions included circulating silver and foreign silver coins and a few other items. All other privately owned silver bullion stocks were mandated to be turned into US Mint locations and purchased by the US government at 50¢ oz. Domestically mined silver was purchased at a premium of 64.5¢ oz.

Within Executive Order 6814’s 90 day mandated deadline, some 109 million ounces of silver had been delivered to the US Treasury. Another 4 million ounces trickled in before the order was rescinded in 1938 (source pg. 268).

 

How did the US government enforce the silver nationalization under Executive Order 6814?

The same threat of a $10,000 fine (about a half million in today’s US dollars) combined with the warning of a possible 10 years imprisonment used in Executive Order 6102 was also utilized in Executive Order 6814.

In early 1934, the US government compiled a list of the largest silver bullion owners at the time, entitled ‘HOARDERS OF SILVER’ which mostly comprised of the largest COMEX silver traders before the Executive Order went into effect in August later that year. Those individuals or companies owning less than 50,000 oz of silver were left off the list likely due to the exhaustive effort required to obtain the names of so many small silver holders in wider detail.

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How Did the Gold and Silver Nationalizations Differ?

Each Executive Order required the delivery of virtually all gold and some silver to the government. Both Executive Orders had exceptions for jewelry, art, and even an exemption for highly rare silver and gold collector coins (not common high mintage gold or silver semi-numismatic coins).

The 1933 gold executive order removed gold coin as money from US citizens’ hands as virtually all gold coins (in value of over $100) were required to be delivered to the government as no further US gold coins would be issued by the United States for monetary circulation.

The 1934 silver executive order specifically excluded nationalizing US circulating 90% silver coins (i.e. silver dimes, silver quarters, silver half dollars and silver dollar coins) and even foreign silver coinage. A major intent of the 1934 silver nationalization was to call in idle silver bullion holdings and domestic silver mine deposits in order to strike and make more 90% silver coins for monetary circulation. Thus requiring the then circulating 90% silver coinage to be turned in would have been counter productive.

The private US citizens and companies who turned in their silver bullion got a better deal than those who turned in their gold.

For nationalized gold holdings, the US government paid $20.67 per troy ounce in 1933. Later in 1934, the US government revalued the price of gold higher to $35 oz, resulting in a near 70% devaluation of the US dollar to the gold price over this small timeframe.

For nationalized silver holdings, the US government paid 50¢ per troy ounce in 1934. It would take until early 1951 for US dollars to devalue some 70% against the silver price, some seventeen years or so.

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