Executive Order 6102: When the U.S. Government Banned Private Gold Ownership

Key Takeaways

• Executive Order 6102, issued by FDR in 1933, made it illegal for Americans to own most forms of gold.
• The order aimed to combat the Great Depression by expanding the money supply and ending gold hoarding.
• Private gold ownership was fully restored in 1974, making pre-1933 U.S. gold coins highly collectible today.

We take it for granted that we can increase our gold stacks whenever we want. Whether it’s coins, rounds, or bars, we can always make the amount of gold in our possession grow larger.

So, it may come as a shock that, for 41 years, Americans were not permitted to do so. In fact, it was a crime to own gold in any significant quantity, and several people went to prison for it.

This page covers Franklin Delano Roosevelt’s Executive Order 6102. This executive edict would change coin collecting, the monetary system, and – in some ways – our entire economy forever.

Since we can still see its effects to this day, it is an important moment in American history for American citizens, whether coin collectors or not, to remember. So, let’s talk about what led to this order, what it did, and, most importantly, what came afterward.

The Historical Context

President Franklin D. Roosevelt issued Executive Order 6102 in April 1933. By that point, the country had been suffering under the effects of the Great Depression for more than three years.

The Great Depression officially began on October 28, 1929, when the Dow Jones Industrial Average lost 13% of its value in a single day. The following day, it dropped an additional 12%, and in a matter of weeks, it was worth half as much as before.

In response, consumer confidence plummeted, and people began withdrawing their money from banks as quickly as possible. Banks, which work with reserves and don’t keep much of their deposits on hand, began closing their doors.

Loans also declined sharply, hurting the banks’ financial security. Many banks shut for good in the two years following the crash.

The fear that all of this turmoil created in the public led them, naturally, to begin hoarding gold. Bear in mind, of course, that the country was still very much on the gold standard at this time. In fact, it had been codified as law in 1900 and remained on the books.

The gold standard, however, limited the government’s ability to expand the money supply, pay for programs, and ease the effects of the depression on the populace. So, FDR – desperate to pay for his New Deal – issued Executive Order 6102 on April 5, 1933.

What Executive Order 6102 Said

The thesis of Executive Order 6102 was simple and decisive. In the opening paragraph, he stated, in part:

…I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations…

The order went on to define the parameters of the dictum in nine sections. Here are the high points of each section:

• Section 1 defined both “hoarding” (withdrawal and withholding of gold) and “people” (as basically everyone and everything) so there wouldn’t be any confusion.
• Section 2 required all persons to deliver almost all of their gold to the nearest member bank of the Federal Reserve on or before May 1, 1933. However, it also declared certain ownership exempt, including rare gold coins and gold used artistically or industrially – which applied to people like dentists and jewelers. It also permitted citizens to retain no more than $100 worth of gold themselves.
• Section 3 clarified that anyone who received gold prior to the delivery date still had to turn it in. Presumably, FDR foresaw that many gold owners would try to evade the edict by simply giving it to a family member or friend.
• Section 4 indicated that citizens would be compensated for their gold according to the going rate prescribed by law. Ironically, the rate – $20.67/oz – was the amount specified in the Gold Standard Act of 1900.
• Section 5 then directed all the member banks to turn over their received gold and be compensated by the Federal Reserve in return.
• Section 6 indicated that the Federal Reserve would pay for any extra costs that the member banks incurred in the processing, security, and transport of the received gold.
• Section 7 gave the Secretary of the Treasury the power to extend the May 1 deadline for citizens who would be burdened by the task of getting their gold surrendered. Citizens who needed the exemption were required to swear out an affidavit under oath and have it be accepted to use this provision.
• Section 8 basically gives the Secretary of the Treasury carte blanche to enact whatever regulations and enforcement he needs to make this order happen.
• Section 9 prescribed a $10,000 fine and a prison term of up to 10 years for anyone who violated the executive order. In other words, holding onto one’s gold might mean jail time and a hefty five-digit fine – a fine levied during the Great Depression, no less.

How Was This Even Legal?

The notion of the US government outright confiscating gold and threatening fines and jail time for it seems outrageous to those of us born in the past 50 years. Undoubtedly, a similar executive order issued today would spark tremendous turmoil. Likely, a massive debate about the protections afforded by the Fourth Amendment to the US Constitution (search and seizure) would erupt.

However, what is missed in this reaction is that the President’s powers can be greatly expanded if Congress declares a national emergency. In fact, the President’s authority can quickly expand to command more than 100 new powers in these cases.

A month prior to the issuance of Executive Order 6102, FDR publicly declared a national emergency during a proclamation on March 3, 1933 – only his third day in office. Now, in and of itself, the proclamation had no binding authority – only Congress can decide the country to be in a national emergency. However, Congress quickly affirmed the new president’s proclamation by passing the Emergency Banking Act of 1933 only six days later.

So, FDR was able to act in a far more dictatorial manner than a president would typically be allowed to behave. One such power was the suspension of private ownership of gold—a feat achieved through an interpretation of the Trading with the Enemy Act of 1917.

Why the U.S. Government Confiscated Gold

Roosevelt’s rationale behind the confiscation of gold was simple. The Great Depression was an ongoing period of economic deflation and stagnation, and he sought to restart the economy by inflating the currency and increasing the money supply.

By doing so, businesses would resume expansion, borrowers could repay their debts, and investors would regain confidence to invest again. FDR also planned to create a tremendous number of government programs and jobs—his New Deal—and needed to pay for them.

However, the gold standard prevented him from adding all this new currency to the system. Because the dollar was still fixed at $20.67/oz, he didn’t have the flexibility to push things forward and move the economy. So, he determined that he needed to gain control of the gold to control the entire monetary base underlying American currency.

With all the gold in hand, he and a sympathetic Congress could now redefine the exchange rate to be whatever they needed it to be. Indeed, less than a year later, the two branches issued the Gold Reserve Act of 1934, which essentially made Executive Order 6102 the actual law of the land and set the new exchange rate for dollars and gold at $35/oz.

The Legal Reversal: Gold Ownership Restored

Americans lived under the restriction on gold ownership for 41 years. They regained the right to own gold thanks to the passage of Public Law 93-373 in August 1974. The law effectively and permanently lifted the restriction on December 31, 1974.

Perhaps surprisingly, the ban’s end came at the hands of President Gerald Ford. Ford, of course, is best remembered for pardoning former President Nixon for his misdeeds during the Watergate scandal. The pardon proved fatal to Ford’s political aspirations and led to his 1976 defeat by Jimmy Carter.

It is quite possible that Ford’s action was a natural progression of things, though. Nixon ended the Bretton Woods system in 1971 and closed off foreign governments ‘ ability to exchange gold for dollars.

At that moment, gold began to fluctuate with market pressures rather than remaining fixed at $35/oz—the same statutory price set by the Gold Reserve Act of 1934. Thus, there is an argument to be made that Executive Order 6120 is responsible, albeit tangentially, for the ascension of the value of gold seen in today’s markets.

Impact on U.S. Gold Coins

Now, the intake of so much gold—primarily in the form of coins—created a logistical challenge for the Treasury. Suddenly, there was a tremendous amount of physical gold that needed to be stored securely, and there wasn’t an easy solution.

The Treasury finally settled on its solution. It began melting millions of gold coins and refashioning them into gold bars. While this action certainly consolidated the hoard, the government still had to find a place to put it all.

So, government officials decided to build a special depository to hold all of this gold. After much consideration, they chose to locate this depository in Kentucky. Specifically, they chose to build a facility at Fort Knox.

However, the few coins that remained unmelted became extremely valuable collectors’ items. Families that elected to hide their gold coins unintentionally became the owners of some of the “holy grails” of numismatics.

No greater example of this fact is evident than the case of the 1933 $20 Saint Gaudens Double Eagle. Many of these coins were melted down into bars. Additionally, the surviving members bore the historical significance of being the last of their kind produced. One particular survivor sold in 2021 for a record-breaking $18.9 million, making it the most valuable coin in the entire world.

Why Executive Order 6102 Still Matters to Collectors

Even if we set aside this extraordinary example, Executive Order 6102 remains a relevant historical note for American coin collectors and numismatists today.

Genuine US gold coins are almost exclusively from the pre-1933 era. Thus, many experts in the field train themselves to look for dates prior to 1933 as fruitful targets for collection.

No matter the level of experience you have, it is incumbent that you recognize 1933 as a seminal year for coin collecting in the United States. If you should happen to find a pre-1933 coin in your collection or in a passed-down set you receive, you can thank Executive Order 6102 for the value you just inherited.