Executive Order 6102: When the US Government Confiscated Citizens' Gold

There are events that remain engraved in history as reminders of the excesses that regimes can exercise against citizens. This is exactly what Executive Order 6102 represents for the minds of many Americans who do not have short memories.

If Europeans remember the year 1933 as being the year when Hitler became chancellor but across the Atlantic, it was also a period of radical upheaval.

That year, President Franklin D. Roosevelt signed the infamous Executive Order 6102, a measure that confiscated the gold of all American citizens.

Let's return to this very particular episode in American history, which marked a turning point in the country's monetary history.

Background to the Great Depression

The beginning of this dark period can be traced back to the infamous "Black Thursday" of 1929, when the New York Stock Exchange experienced a day of brutal price declines, marking the beginning of a major financial and economic crisis that has since been called the "Great Depression."

The stock market crash of 1929 had devastating economic consequences, with a drastic drop in production, property seizures and business closures leading to massive unemployment throughout the country. Financial institutions were in trouble, and the banking system was on the verge of collapse.

This period marked by economic misery is often cited as a striking example of the dangers of excessive speculation and the instability of financial markets.

At that time, the country operated on the gold standard system, meaning that each dollar in circulation was backed by an equivalent amount of gold held by the government. However, the Great Depression created strain on the financial system, causing many people to hold gold in cash rather than deposit money in banks.

The dispossession of gold by American citizens

To deal with this crisis, President Roosevelt took a radical decision as part of his policy of New DealOn April 5, 1933, he signed "Executive Order 6102," which required U.S. citizens to surrender their or to the government in exchange for dollars.

The decree explicitly stated that citizens were ordered to deposit in local banks all gold they held, including gold coins, bars, and even gold jewelry. In case of non-compliance with the law, citizens were subject to fines and imprisonment.

The official goal of Executive Order 6102 was to stabilize the financial system by consolidating gold into government coffers.

However, it had a major impact on the daily lives of Americans. Indeed, many people lost a significant portion of their savings because the government paid a rate lower than the real market value of gold.

Criticisms from certain economists

The confiscation of gold had a number of economic and historical repercussions. Following citizens' deposits, this helped stabilize the financial system and revive confidence in the American dollar. Within the country and internationally, the dollar regained its supreme principle as the gold standard.

However, the decision also left many people bitter and sparked concerns over property rights. Executive Order 6102 was criticized by several prominent economists and intellectuals at the time. One of the most notable critics of this policy was the economist and Nobel Prize winner MiltonFriedman.

A fervent defender of liberalism, Milton Friedman opposed the gold confiscation policy pursued by the Roosevelt administration. He argued in his works that the government's monetary policy helped worsen the Great Depression and disrupt financial markets. He strongly believed in the need for monetary stability and non-intervention of government in financial markets, unlike Keynes, for example.

In the same vein, we can also mention Murray Rothbard and Ludwig von Mises who were also critical of this policy. They argued that gold confiscation was a government intrusion into citizens' property rights and had harmful economic consequences.

This decree then made it possible to crystallize libertarian thought in the USA which has since continued to gain momentum elsewhere in the world as well.

These critiques indeed helped shape the debate over monetary policy and government regulation in the United States at the time, and they have greatly continued to influence discussions of the economy and monetary policy today.

On August 15, 1971, President Richard Nixon announces the end of gold convertibility and then announces the end of the gold standard of the system established by Bretton Woods. Then, in 1974, the U.S. government ended the policy of citizen gold ownership, allowing Americans to own gold again.

Confiscations in other countries

The event of 1933 remains a significant and traumatic chapter in the monetary history of the United States. It is important to note, however, that such episodes of gold confiscation were not the preserve of the United States alone.

Fascist Italy in 1935 implemented a similar executive decree to collect gold from all holders in the country. In France, the government in 1936 forced holders of more than 200 grams of gold to sell it to the Bank of France before abandoning this policy a year later.

Today, fortunately, all countries (or almost) have the freedom tobuy gold and to detain him at home, in complete freedom.

Cypherpunks and the creation of Bitcoin

Today, this episode is often remembered as an example of the extraordinary measures that government can take in times of crisis, and as a reminder of the issues surrounding private property.

In this respect, it is interesting to now mention the cypherpunks who campaign for the protection of privacy and individual rights. The latter consider that the protection of the right to property, including the ownership of money, is fundamental for the preservation of individual freedoms. Thus, Bitcoin, as a decentralized cryptocurrency, offers a way to transfer value privately and securely, without the need for governments.

Cypherpunks view Bitcoin as a powerful tool to protect property rights by allowing individuals to control their financial assets independently, without fear of confiscation or censorship, as seen with the 1933 decree…