Executive Order 6102
2 min read
The Emergency Banking Relief Act of 1933 and Executive Order 6102 authorized U.S. President Franklin Delano Roosevelt to force American citizens to relinquish their gold under penalty of the law.
Executive Order 6102 was implemented so the U.S. government could devalue the dollar more aggressively to stimulate the economy during the Great Depression. So long as citizens had the opportunity to preserve their wealth in gold, such economic stimulus would result in obvious, high inflation.
The executive order compensated owners $20.67 for each troy ounce of gold.
Executive Order 6102 was not a unique event in history. Mass gold confiscations have occurred around the world for thousands of years. Gold was confiscated en masse in Communist China, the United Kingdom, and the Soviet Union.
Gold is susceptible to mass confiscations because it is physically difficult to hide, secure, or transport. These inconveniences incentivize gold owners to store their gold with centralized custodians, usually banks. These banks are susceptible to government coercion. Whereas it would be extraordinarily costly to confiscate gold from millions of private homes, looting the far more limited number of banks is relatively efficient.