Did the US Make Owning Gold Illegal? A Timeline of Events

Many investors have heard that the United States government confiscated gold from the public years ago. Is it true? Is that a rumor? Could it happen again? This is a topic that comes up again and again among gold investors. Rather than speculate, we think it's better to consider the facts. Below is a timeline that explains exactly what happened and, more importantly, how today's investors should react and what they can do to make sure they are prepared, should it happen again. In 1933, Executive Order 6102 made it a criminal offence for the United States citizens to own or trade gold anywhere in the world, with exceptions for some collectible jewelry and coins.

This measure was necessary as President Roosevelt believed that this action was not enough to prevent bank runs and the consequent flight of gold from the system. On April 5, 1933, a month after taking office, he used the powers granted to the president by the Trading with the Enemy Act of 1917 to make gold ownership illegal. A new set of Treasury regulations was issued providing for civil penalties of confiscation of all gold and imposition of fines equal to twice the value of seized gold. This means that even if the United States government still had all the gold coins it had minted, that amount could only cover about one-third of the gold bonds of the Fourth Liberty Loan that were outstanding in 1933. There were some exemptions that included customary use in industry, profession or art, a provision covering artists, jewelers, dentists, markers, etc. On January 1, 1975, these restrictions were lifted and gold can now be held freely in the U. S.

without licenses or restrictions of any kind. On December 17, 1985 — President Reagan signed into law the gold bullion coins law that allowed the United States Mint to produce gold coins from “domestic sources”. The American Eagles gold became one of the best-known gold coins. It is true that numismatic collector-type coins were excluded in the confiscation of 1933. Whether or not they will be excluded again in any future confiscation is completely unknown. Generally speaking, gold is the antithesis of fiat currencies and is considered a hedge against inflation. Are gold bullion coins legal? Yes, most of them are.

This nominal value allows them to travel across national borders without the taxes or fees that many countries impose on the ingot itself. Do bullion coins come with a certificate of authenticity? Yes, the manufacturer's mark and the weight and fineness statement are stamped directly on gold bars, whether coins or bullion. The ingot itself, in fact, bears its own “certificate” from the mint or refinery that produced it. Fortunately, gold is an element with a unique specific gravity and other attributes that facilitate proof of authenticity. Ancient Egyptians pioneered the “acid test” for gold, and any jeweler, lender or high school chemistry teacher can demonstrate the basic principles of gold. Are there counterfeit gold coins? Yes, over the centuries, coarse copies of gold coins have been made.

But because of the unique density of gold (only platinum is so heavy), these copies are not very convincing. Once you hold a real gold coin in your hand and feel its weight and density, you realize that gold is simply difficult to imitate. Of course, we recommend that you know your supplier when buying gold, as you would with anything of real value. Was it ever illegal to own gold? Yes, in this country from 1933 to 1974 it was illegal for U. citizens to own gold in the form of gold bars without a special license. Do you report my gold purchases to the government or anyone else? If I sell you gold, is it reported? Do I have to report my gold coin purchases to the government? No, there is no branch of federal, state or local government interested in how much gold you can own. Do I have to pay taxes if I sell my gold bullion coins to make a profit? If you have gold as an investment and then sell it at a profit, you will have a taxable profit in short or long term as you would with any other investment. Is there a limit to how much gold I can have? No, there are no restrictions on private ownership of gold in United States.

You're limited only by your budget and common sense.

Alan Crippen
Alan Crippen

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