Nationalization of gold/silver 1933-34
Terry
coin and gold certificates to be turned in, except for rare coins, and
reasonable amounts for industry and the arts. But reading a book titled "A
Monetary History of the United States, 1867-1960" I find that on August 9,
1934 he also required all silver except that used in the arts and for
coinage to be turned in to the mint at $ 0.5001/oz. This is new to me.
Industries, arts and others needing gold and silver could but it directly
from the mint.
TerryS
oly
I believe that the FDR administration was not so much "nationalizing"
silver as it was trying to jumpstart the economy. FDR knew that
people equated high prices with prosperity, even if the price support
was so much government deficit spending.
See that the silver price offered was actually rather above the market
prices in 1930, 1931, 1932, and 1933:
http://66.38.218.33/scripts/hist_charts/yearly_graphs.plx
Also note that the high price resulted in a glut of silver in
following years
Roosevelt played with quite a few commodities, even setting some
prices personally.
As always, price support leads to price implosion; price suppression
leads to price explosion.
Also note that under the 1933 gold order, anybody could retain $100
face in gold coins and not be in violation of the executive order. An
average family could have kept about 1 year's income in gold coins,
had they wished (or if they had the financial capacity).
oly
RF
"oly" <oly...@aol.com> wrote in message
news:e39708cd-e44d-4065...@b38g2000prf.googlegroups.com...
http://66.38.218.33/scripts/hist_charts/yearly_graphs.plx
Are you saying the average family earned $100/yr?
oly
> "oly" <oly2...@aol.com> wrote in message
No, I am running on the basis that my grandfather (a farmer) probably
made a cash income of $450 about 1933 and about $700 per year in the
later 1930s (1936 was a drought year - probably made much less).
Having a wife and three children, he could have theoretically held on
to $500 in gold coins (he didn't). So a farm person might have set
aside about one years income in gold, had they understood what
Roosevelt was doing.
My grandpa's income was probably a bit below the city average for the
era, as his farm house (a nice one) came rent free as part of his
tenancy on a 400 acre farm.
Roosevelt was doing something much different with the silver than the
gold. In the case of the gold confiscation, it was bought in at
$20.67 per ounce - and later the price was raised (the dollar was
devalued) in stages to $35.00 per ounce. This resulted in "income" to
the government on its books.
In the case of silver, Roosevelt was paying above market prices to
stimulate the mining industry. There may have been some benefit in
international trade too, as the price support helped raise the price
of silver for countries that traditionally relied on silver as their
currency.
oly
oly
oly
>
> - Show quoted text -
I went to a website that did various calculations of what $450 income
in the U.S.A. in 1933 might be in terms of 2007 income. It looks
like there is a wide range of indicators, but that $450 might be
equivalent to $15,000 to $19,000 on a "bundle of goods" basis. That's
not a lot of money, and today you could not be a full time tenant
farmer on a mere 400 acres. But, it was reasonably secure by
depression era standards.
The 1930 Census showed that my great-grandpa (who preceeded my Gramps
on the same farm) was retired and living in a rental house in Lincoln,
Illinois - and his monthly rental was $9. I suspect that Great-
Grandpa's house wasn't as nice as the farmhouse that Gramps lived in.
So figure that my Gramps got at least a $120 benefit from not having
to pay rent as part of his farm tenancy
oly
Mike Marotta
> We all know that Pres. Roosevelt on April 5, 1933 required all gold, gold
> coin and gold certificates to be turned in, except for rare coins, and
Anyone could own up to $100 in gold coin. In 1933, $100 was two or
three months wages for the average worker, about $6000 to $10,000 in
today's money.
Numismatic Scrapbook magazine was founded three years after this
executive order. In the pages of that publication, the London Spot
Price for Gold was often published along with the London fix for
Silver. Gold coins such as the U.S. $3, $10, and $20 were offered for
sale by dealers to the public in display ads at prices within a few
cents of the London fix.
... Thomas Elder catalog of April 14-15, 1933, carried a letter from
William H. Woodin assuring collectors that they could own gold coins
-- both rare examples and souvenirs. Furthermore, in 1954, the Federal
Reserve Bank of Cleveland sent a letter to its members telling them
not accept gold coins from depositors, but to direct people to take
their gold coins to coin dealers.
Even today, some numismatists remain mystified by the Executive Orders
of 1933 that moved gold from local banks to the Federal Reserve.
Collectors who know only second-hand tales easily make flawed
statements about the ownership of gold -- or the ability or desire of
the government to seize it.
http://www.coin-newbies.com/articles/gold_never_illegal.html
Michael
oly
Indeed, if the $450 were projected from 1933 using the CPI (Consumer
Price Index) you get about $9000 in today's paper. But I like the
"basket of goods" projection better in this instance because I'm sure
that the hard-working farmers lived better than what $9000 would buy
today. They didn't pay rent, they ate chicken and pork that they
raised (and butchered) themselves, etc. Things that cost money could
be tough for them, but most got along O.K. in the 1930s.
oly
RF
>Indeed, if the $450 were projected from 1933 using the CPI (Consumer
>Price Index) you get about $9000 in today's paper. But I like the
>"basket of goods" projection better in this instance because I'm sure
>that the hard-working farmers lived better than what $9000 would buy
>today. They didn't pay rent, they ate chicken and pork that they
>raised (and butchered) themselves, etc. Things that cost money could
>be tough for them, but most got along O.K. in the 1930s.
So I guess all those Okies went to California for the sun, right?
Mike Marotta
> So I guess all those Okies went to California for the sun, right?
Do not confuse the Dust Bowl with the Depression. They happened at
the same time. They share some cultural overlap, also. The Dust Bowl
-- like the Depression -- was caused at least in part (some say
wholly) by Federal interventions that rewarded anti-market behaviors
despite clear market signals. Farmers eroded the land because it was
in their interest to do so as a result of government programs.
Similarly, do not confuse the Depression with the Stock Market Crash
(Black Thursday - Black Tuesday). It took three years for the banks
to fail. Many of them were small local banks which had been protected
from competition by laws that prohibited big city banks from operating
branches.
The first banks to fail were in Lousiana and Las Vegas, hardly the
centers of commerce. The problem was Detroit. Over-extended in
unprofitable real estate - (no kidding) - the Guardian Group of
Detroit wanted Henry Ford to "subordinate" $7.5 millions and "lend"
another $4 million. The $7.5 million was Ford money on deposit at the
bank. They wanted him to leave it there long term. He decided he
wanted it back right now. At 2:00 AM on February 15, Governor William
A. Comstock closed all the banks. A month later, immediately after
his inauguration, President Roosevelt closed the rest.
It is interesting to read the newspapes of the period and see the
world through their eyes. I have a front-page feature from the
Traverse City Record-Eagle that shows Hitler, Mussolini and Stalin,
writing at their desks and the headline says that these dictators
attempt to solve their country's emergencies. Ok... But down below
the fold, the Michigan state legislature passes a resolution granting
Governor Comstock emergency dictatorial powers to deal with the
present emergency. The man was too much of a Democrat to accept the
role.
Mike M.
"History does repeat itself. The first time, it is history.
The second time it is farce." -- Karl Marx in "The 18th Brumaire of
Louis Napoleon"
RF
"Mike Marotta" <mer...@torchlake.com> wrote in message
news:5a10bf27-54b6-4497...@v22g2000pro.googlegroups.com...
oly
> Don't presume to lecture me, Mr. Know-it-all.
>
>
> - Show quoted text -
My comments were thinking of the farmers in Illinois, who survived the
depression, who were basically all in my grandpa's generation. I knew
some of them when they were older men.
Sometimes your one-liners oversimpify a complicated matter, RF. But
many of my grandpa's childhood friends in Illinois did go to
California - under better circumstances than the Okies. Ronald
Reagan, Walt Disney and Red Skelton were all Illinoisians by birth,
who went out to California in the 1930s and did very well.
oly
