Times were very good for many Americans in the mid- to late-1920s:
the stock market had grown exponentially driven, in part, by a frenzy of investing which sent stock prices well beyond their true value. In 1929, the frenzy ended.
Black Tuesday started a stock market crash which ultimately led to the
Great Depression.
By
1933, the demoralized nation looked to Washington, D.C. and President
Franklin D. Roosevelt for salvation. Recognizing the inherent value
of a currency based upon gold, and seeking to stabilize the U.S. dollar,
Roosevelt confiscated gold coins owned by American citizens (all but
$100 worth per individual).
Americans were required to turn in their gold coins to a Federal Reserve
Bank in exchange under penalty of large fines and/or jail sentences.
There were only a few exceptions, one being:
"gold coins having a recognized special value
to collectors of rare and unusual coins."
You can view the actual Executive Order and read
the terms of confiscation by clicking on the picture
to your right.
The government melted the majority of
the confiscated coins into bars. The government then devalued the dollar and raised
gold’s value by nearly 75%.
Rare coin collectors, exempted by the confiscation
actually profited from the confiscation, melting,
and price revaluation in two important ways. Their
coins gained value due to the:
- Significant increase of the gold bullion value of their coins.
- Massive official melting of the confiscated gold coins. This melting
made the limited number of surviving coins in collections more scarce
and, thus, more valuable.
These government actions helped President Roosevelt and Congress inflate the
U.S. economy during the mid- and late-1930s. These actions also led
to a loss of a number of important freedoms for the American people
- freedom from long-term inflation, expanding government spending, gold confiscation
(except collectors), and government intrusion into their private financial
matters.
Owning gold coins has helped protect portfolios from inflation,
devaluation, and intrusive government for thousands
of years. The events of the 1930s and the decades
that followed prove the importance of owning collectible gold coins.
