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December 17, 2003

How FDR saved capitalism

Official mythology holds that the Great Depression of the 1930s represented a failure of laissez-faire. How does a guy like FDR save the country from freedom? He orders people who own gold to turn it in for government paper.

In April, 1933, Roosevelt issued an executive order:

By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists; That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.

''Therefore, pursuant to the above authority, I herby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed, pending action in the due course of the law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are herby prohibited.

''Your possession of these proscribed metals and/or your maintenance of a safe-deposit box to store them is known to the Government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of The Internal Revenue Service.

''By lawful Order given this day, the President of the United States.''

It reads like a passage from a Nazi novel.

It would hard to find a more legitimate reason for overthrowing the government. But the people complied and hailed Roosevelt as their friend.

Posted by George F. Smith at December 17, 2003 11:40 AM

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