1944 Gold Coin Treasury Memorandum (& other cool stuff)

I thought this memorandum was fascinating. It's from the Treasury Dept. concerning Secret Service activity in the NYC area with respect to dealers selling gold coins during the war.

The Secret Service wanted guidance on what they should do since even during the war (1944) lots of NYC dealers were selling gold coins en masse. Treasury came back with guidance which amounted to: if the buyers pay a premium, it's de facto a numismatic coin and it's exempt.

The only restriction was on $2.50 Quarter-Eagles where they limited it to 4 coins for each mint/year (apparently realizing the cheapest coin was where hoarders among the public would most likely target).

Thanks to Roger Burdette for uncovering this fascinating memo and letting me post it.

 

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That's an excellent find. It may or may not shed light on how things would go if a President tried something similar today. (Based on recent events, any historical precedent is at best a very weak indicator of what policy decisions a President might get away with today.)

 

Thanks. Credit to RWB.

BTW, I had uploaded Page 1 twice...it's now fixed. 2-page memo.

I think this Memo is just pertinent to the loopholes that existed after EO 6102 came into effect. The government CLEARLY played hardball in a couple of cases (I can post the actual NYT articles later if you guys want them)....right after the EO in 1933, the famous case of the guy who had $5,000 in gold with Chase Bank and got it seized.

This is different...this memo concerns sales of coins over a decade later and the SS is asking Treasury if the sale of coins is OK because of the numismatic exemption...Treasury's response is: if a premium was involved, it's ipso facto a numismatic coin and it's a legal sale.

So...if 1924 Saints were common back then too....$35 an ounce value....I buy 10 of them for $350, that's illegal as per EO 6102 (I can buy only 5 bullion coins)....but I buy it from an LCS for $40 or $45 each.....then all 10 are OK because all of them are at a premium PLUS I'm allowed the 5 bullion coin exemption (which wouldn't be needed here anyway).

There were other cases and legal briefs and some good law school analyses over the decades but they all were basically irrelevant once Pres. Ford signed the law allowing Americans to hold gold (ANY gold) effective December 31, 1974 (it was a real snoozer at the time -- I have articles on that, too).

 

Louis Eliasberg was quoted by friends and those in the busness as saying he got into numismatic gold as a way to hold gold coins above and beyond the 5-coin limit imposed by EO 6102 and the domestic selling and import restrictions ordinary Americans faced.

 

I believe you can post snippets under the fair use doctrine. Just take the most pertinent sections and feel free to post them. I suggest we play it safe (I'm not a lawyer - just extra cautious).

 

These are NY Times articles.

Like this one from 65 years ago, January 14, 1961:

 

So as late as 1961 there were concerns about gold competing against the U.S. dollar by government officials, even though we have been assured that there is no such threat. So we see efforts to close the escape hatch - though as I understand it Americans could still invest in gold miners and buy numismatic coins to get indirect exposure. Silver was another way to indirectly play the gold market, but now that silver is regarded as a strategic metal, I think that's possibly vulnerable in the future.

 

I'm busy doing some personal errands, but preliminarily I am not too convinced by a Treasury Department memo from many decades ago, primarily because, from my lay standpoint, it can be overriden or nullified by a future Treasury. I still have to go over the details of all of this, but for now you can count me as a skeptic as to the legal finality of anything in this thread.

 

When you read the history books, it seems like Bretton Woods was on autopilot from 1944 to 1971.

In fact, there were speedbumps in virtually every decade, if not caused by the UK, then France, the U.S. balance of payments deficit, whatever.

 

Admittedly, I have yet to read the memo at the top of the thread - I will have to analyze it. But I was able to dig up - this is for future reference - the Supreme Court cases Perry v. United States (1935)* and Norman v. Baltimore & Ohio R. Co. (1935)**, which appear to have affirmed the right of the federal government to confiscate gold through EO 6102.

So, the Supreme Court has already affirmed that gold confiscation (as practiced under EO 6102) is lawful. This, to me, is quite insane. By the way, this is potentially legally binding and applicable to future cases. The memo posted at the top of this thread is not binding at all, though it's believed it may shed light on any future confiscation. I think this is a charitable view of that memo, but again I will have to review it thoroughly as well as the above-mentioned Supreme Court cases.

* https://supreme.justia.com/cases/federal/us/294/330/

** https://supreme.justia.com/cases/federal/us/294/240/