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"Hoarding Gold" Was Prohibited by President Roosevelt in 1933

Did Holding Gold Stall an Economic Recovery During the Great Depression?


Executive Order 6102 sought to limit an individual's right to own gold and precious metals.

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As the price of gold, silver, and other precious metals continue to rise, previous presidential mandates concerning private ownership of gold has caused some financial advisors to discuss Executive Order 6102 with clients.

On April 5, 1933, President Franklin Delano Roosevelt signed an executive order to prohibit the "hoarding of gold coin, gold bullion, and gold certificates" in the continental United States. During the Great Depression, individuals seeking the gold as a hedge against financial uncertainty lived under the threat of the Executive Order.

According to The New York Times the following day, the government thought that gold ownership stalled potential financial recovery. A month earlier, President Roosevelt used a statute on the books from World War I (part of the Trading with the Enemy Act of 1917) that prohibited "hoarding" gold and silver assets. Individuals owning gold or silver (coins, currency, or bullion) could be fined $10,000 (or about $167,000 in current U.S. dollars) or imprisoned for 10 years, or both.

Under the terms of Executive Order 6102, United States Citizens were required to sell gold to the Federal Reserve by May 1, 1933 for a fixed price of $20.67 an ounce. Professionals using gold or silver in art, dentistry, or sign-making were exempted from the Executive Order. Individuals were also allowed to own up to $100 (about five troy ounces in 1933) in face value of gold coins (less than $10,000 in current value). Collectors of rare gold coins were exempt from delivery of collections to the Federal Reserve.

The price of gold was later raised to $35 an ounce for transactions on the international gold market. The U.S. government profited from the price rise and created the Exchange Stabilization Fund (under the Gold Reserve Act of 1934).

Executive Order 6111 modified Executive Order 6102. Executive Order 6260 and 6261, signed by President Roosevelt in August 1933, further modified the original orders.

Urban legend and the Internet report that the executive orders allowed the search of private bank security boxes for gold. A review of the executive order documents show this wasn't the case. The Gold Reserve Act, passed in 1934, fixed the price of gold at $35 per ounce. This fixed price remained in place until President Richard Nixon declared that the price of gold would float against other financial assets in 1971.

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