first majestic silver

Roosevelt and Gold Confiscation (PART I)

Chapter 11

June 13, 2008

“I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding

is but swindling futurity on a large scale.” [1]

Legacy of Infamy

The year was 1933. Herbert Hoover was still President. Franklin Delano Roosevelt waited in the wings to be sworn in as the new President of the United States. The following Resolution was written by Eugene Meyers and the New York Bankers. It was given to President Hoover at 10.00 pm. March 3, 1933.

Resolution Adopted by the Federal Reserve Board of New York

“WHEREAS, In the opinion of the Board of Directors of the Federal Reserve Bank of New York, the continued and increasing withdrawal of currency and gold from the banks of the country has now created a national emergency, and

WHEREAS, It is understood the adequate remedial measures cannot be enacted before tomorrow morning,

NOW, THEREFORE, BE IT RESOLVED, That in this emergency the Federal Reserve Board is hereby requested to urge the President of the United States to declare a bank holiday Saturday, March 4, and Monday, March 6, in order to afford opportunity to governmental authorities and banks themselves to take such measures as may be necessary to protect the interests of the people and promptly to provide adequate banking and credit facilities for all parts of the country.

Proposed Executive Order


WHEREAS the nation's banking institutions are being subjected to heavy withdrawals of currency for hoarding; and

WHEREAS there is increasing speculative activity in foreign exchanges; and

WHEREAS these conditions have created a national emergency in which it is in the best interest of all bank depositors that a period of respite be provided with a view to preventing further hoarding of coin, bullion or currency or speculation in foreign exchange, and permitting the application of appropriate measures for dealing with the emergency in order to protect the interests of all the people; and

WHEREAS it is provided in Section 5 (b) of the Act of October 6, 1917, as amended, that "The President may investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange and the export, hoarding, melting, or earmarking of gold or silver coin or bullion or currency; and

WHEREAS it is provided in Section 16 of the said Act that "Whoever shall willfully violate any of the provisions of this Act or of any license, rule, or regulation issued there under, and whoever shall willfully violate, neglect, or refuse to comply with any order of the President issued in compliance with the provisions of this Act shall, upon conviction, be fined not more than $10,000, or, if a natural person, imprisoned for not more than ten years, or both;

NOW, THEREFORE, pursuant to the authority granted by said Act, I hereby order, direct and declare that:

  1. From Saturday, the fourth day of March, to Tuesday, the Seventh day of March, Nineteen Hundred and Thirty Three, both dates inclusive, there shall be maintained and observed throughout the United States of America a bank holiday for all of the purposes herein after set forth.
  2. During said holiday, no banking institution as hereinafter defined shall pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold or silver coin or bullion or currency or take any other action which might facilitate the hoarding thereof; nor shall any such banking institution pay out deposits, make loans or discounts, deal in foreign exchange, or transact any other banking business whatsoever.
  3. Upon the expiration of said holiday and until otherwise ordered by the President of the United States, such banking institutions may pay out, export, earmark or permit the withdrawal or transfer of gold or silver coin or bullion or currency, or deal in foreign exchange to extent as may be permitted by license or otherwise under regulations issued by the Secretary of the Treasury with the approval of the President.
  4. The Secretary of the Treasury, with the approval of the President, is authorized and empowered to prescribe such regulations as he may find necessary to carry out the purposes of the order.
  5. The term ‘banking institution’ as herein used shall include all Federal reserve banks, national banking associations, banks trust companies, savings banks, building and loan associations, credit unions, or other corporations, partnerships, associations or persons engaged in the business of receiving deposits, making loans, discounting business paper, or transacting any other form of banking business”. [2]

The White House

March, 1933. The following is a letter sent by President Hoover to Eugene Meyer:

“My dear Governor Meyer:

I received at half past one this morning your letter dated March 3rd. I must assume that this letter was written on the basis of information received by you prior to 11:30 o'clock last night for the reason that before your letter was sent you had certain information as follows:

a. At 11 o'clock last night the President elect had informed me he did not wish such a proclamation issued.

b. The Attorney General had renewed the same opinion which he had already given to the Board that the authorities on whom you were relying were inadequate unless supported by the incoming Administration.

c. That groups of representative bankers in both Chicago and New York, embracing members of the Board of Directors of the Federal Reserve Banks in those cities, were then in conference with the governors of the states of Illinois and New York, and that the governors of these two states were prepared to act if these representative groups so recommended. It appears that the governors did take action under their authorities, declaring a temporary holiday in these two critical states, and thus accomplishing the major purposes which the Board apparently had in mind.

In view of the above I am at a loss to understand why such a communication should have been sent to me in the last few hours of this Administration, which I believe the Board must now admit was neither justified nor necessary.

Yours faithfully, Herbert Hoover” [3]

The Issues

There are three crucial points that stand out and above the many issues that could be addressed.

  1. It is troubling that the Federal Reserve is recommending, almost dictating, Presidential policy and subsequent actions they urge the President to take.
  2. President Hoover said that President elect Roosevelt had indicated that he didn't see the necessity or urgency in issuing a proclamation concerning the supposed national emergency.
  3. What transpired for President Roosevelt to diametrically change his mind just a few hours later? Whatever it was, it must have been pretty serious to warrant such drastic changes.

Roosevelt’s First Actions as President

The day after Roosevelt took the presidential oath of office, he issued a proclamation calling Congress into special session. He also declared a national bank holiday, the very same action that he had refused to agree with during Hoover’s last few days in office. Such actions were a stunning turn of events.

On March 9, 1933, President Franklin Delano Roosevelt signed executive orders 6073, 6102, 6111, and 6260, starting what was quickly to become an avalanche of draconian measures, forced upon an unsuspecting and supposedly free people.

By using the above executive orders, the new President declared a national emergency that made it unlawful for any citizen of the United

States to own gold; the very same gold that was the hard money currency of the Constitution, as well as the circulating currency of the time. This was a sad day in our country’s history, as a basic right of the Constitution, the right to private property, had been confiscated without just compensation and due process.

Such action cannot be lawfully done without a constitutional amendment, and one has not even been mentioned, let alone passed. The Supreme Law of the Land states that any law not in pursuance of the Constitution is null and void, as if it never occurred. It has no legally binding authority.

Not only had this act been perpetrated without a constitutional amendment, it was actually diametrically opposed to the Constitution, trampling the people’s unalienable rights into the ground. It arguably amounted to a declaration of National Bankruptcy.

What National Emergency

What was the national emergency that prompted Roosevelt to declare that the public’s gold be called in and confiscated? Did Roosevelt have the authority to declare such a national emergency, based solely on the fact that private banks were having financial problems?

And what exactly was the source of the bank’s problems? If all shoemakers are going out of business because of inept business practices, should the President declare a national emergency and bail them out? This is not how free markets work.

The government should not intervene within the workings of a free market. The government’s job is to protect the people’s unalienable rights – life, liberty, and the pursuit of happiness, not to bail out an industry that caused its own bankruptcy.

Is holding the office of the President of the United Sates sufficient authority to go against the Constitution, the very same Constitution he takes an oath of office to preserve, defend and protect?

Let’s return to the record to see exactly what the emergency was:

  • Emergency Banking Relief Act of 1933 U.S.
  • Statutes at Large (73rd Congress, 1933 p. 1-7)

An Act

“To provide relief in the existing national emergency in banking, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, that the Congress hereby declares that a serious emergency exists and that it is imperatively necessary to speedily put into effect remedies of uniform national application”. [4]

So, as the above clearly states, the emergency was a national emergency in banking. By what authority was this national emergency declared and or authorized? Let’s once again look to the record, as our government statutes record the above quoted Emergency Banking Relief Act of 1933:


Section 1. The actions, regulations, rules, licenses, orders and proclamations heretofore or hereafter taken, promulgated, made, or issued by the President of the United States or the Secretary of the Treasury since March 4, 1933, pursuant to the authority conferred by subdivision (b) of section 5 of the Act of October 6, 1917, as amended, are hereby approved and confirmed.” [5]

So, the authority was “pursuant to the authority of subdivision (b) of section 5 of the Act of October 6, 1917, as amended, are hereby approved and confirmed”.

This refers to The Trading with the Enemy Act, which comes under The War Powers Act. Notice, however, the last section that comes right after the date of 1917, which states: “as amended, are hereby approved and confirmed”.

The original Trading with the Enemy Act was not exactly what Roosevelt and the banking powers had in mind, so they changed the act by issuing amendments to fit their agenda.

The Amendments

Section 2. Subdivision (b) of section 5 of the Act of October 6, 1917 (40 Stat. L. 411):

''(b) During time of war or during any other period of national emergency declared by the President, the President may, through any agency that he may designate, or otherwise, investigate, regulate, or prohibit, under such rules and regulations as he may prescribe, by means of licenses or otherwise, any transactions in foreign exchange, transfers of credit between or payments by banking institutions as defined by the President, and export, hoarding, melting, or earmarking of gold or silver coin or bullion or currency, by any person within the United States or any place subject to the jurisdiction thereof; and the President may require any person engaged in any transaction referred to in this subdivision to furnish under oath, complete information relative thereto, including the production of any books of account, contracts, letters or other papers, in connection therewith in the custody or control of such person, either before or after such transaction is completed. Whoever willfully violates any of the provisions of this subdivision or of any license, order, rule or regulation issued there under, shall, upon conviction, be fined not more than $10,000, or, if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director, or agent of any corporation who knowingly participates in such violation may be punished by a like fine, imprisonment, or both. As used in this subdivision the term 'person' means an individual, partnership, association, or corporation”. [6]

(PART 11 will be posted next week)

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1. Thomas Jefferson in a letter to John Taylor, 1816

2. Public Papers of the Presidents of the United States, Herbert Hoover, Containing the Public Messages, Speeches, and Statements of the President, January 1, 1932 to March 4, 1933

3. As above

4. Emergency Banking Relief Act of 1933

5. Same

6. Trading with the Enemy Act Section 2. Subdivision (b) of section 5 of the Act of October 6, 1917 (40 Stat. L. 411)

7. “Section 2. Subdivision (b) of section 5 of the Act of October 6, 1917 (40 Stat. L. 411), is hereby amended to read as follows per the Emergency Banking Relief Act of 1933

8. Same as four above

9. House Joint Resolution 192 - June 5, 1933

10. Congressional Records (1933) Congressman Lundeen remarks made on March 9, 1933

11. Dr. Franz Pic

About the author: Douglas V. Gnazzo writes for numerous websites and his work appears both here and abroad. Just recently he was honored by being chosen as a Foundation Scholar for the Foundation for the

Advancement of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.

Douglas V. Gnazzo © 2008 All Rights Reserved

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