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Reply #19: Confiscation [View All]

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Art_from_Ark Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jan-06-04 09:19 PM
Response to Reply #18
19. Confiscation
Basically the only coins that are subject to confiscation today are counterfeits, and any 1933 $20 gold pieces that are not the one that was recently sold at auction with the US government's approval (that is a story all in itself).

The fears of confiscation date from 1933, when Roosevelt "called in" the gold coins then in circulation and essentially demonetized gold. Agents were sent around to people's homes to "redeem" their gold coins for paper money. Unbeknownst to most people was a provision, implemented by Treasury Secretary Morganthau, that was included in the gold order that allowed people to keep "rare and unusual" gold coins, so long as it did not exceed a certain number for the same date and denomination. Therefore, most people theoretically could have hung on to their gold coins, but since this was the middle of the Depression and every cent counted for most people, and most people were under the impression that it was illegal to hold on to any gold coin, they traded them in (much to their detriment, because the price of gold soon rose to $35/ounce, making the $20 gold piece worth $33.94 for its gold alone).

From 1933 to 1974, the US government tried to discourage the private ownership of gold, either through laws prohibiting citizens from owning gold bullion (both in the US and overseas), by making certain dates of foreign gold "illegal" to hold, and by making it difficult to import legal gold into the US from overseas. Thus, for example, the 1967 Canadian $20 gold piece issued to commemorate the 100th anniversary of Canadian confederation was technically illegal for Americans to own when it was issued, because it carried a date that was later than 1959!

Then there was the problem with the Krugerrands in the 1980s. Importation of Krugerrands was prohibited sometime in the 1980s (1986, I believe), but the Krugerrands that were already in the country could still be legally traded. Nevertheless, a lot of collectors and investors believed it was illegal to own any Krugerrands at all, and the Krugerrand market all but died for fear of government confiscation of these coins. To compound matters, US Customs did not seem to have a firm grasp of the law, with some customs agents thinking that no Krugerrands could be brought into the US, others thinking that no gold coins at all from South Africa could be brought into the US, and still others thinking that only certain dates were affected. And even after the law was repealed, some agents, at least, thought they could confiscate the coins.
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