It may be hard to believe but a little over 75 years it was illegal to hold gold in the United States of America.

In 1933, to try and stabilize the monetary and banking system crisis, President Franklin Roosevelt, under the Executive Order No. 6102, set into motion the way to begin confiscating privately owned gold from the citizens in the United States. In total in the year 1933 approximately 500 tonnes of gold were turned in to the Treasury "voluntarily" at the exchange rate of $20.67 per troy ounce

So why, did Roosevelt have to resort to this financial measure. Well, his presidency was during The Great Depression, triggered by a sharp collapse in the stock market. The depression had devastating effects on international trade, where this plunged by half to two-thirds, as similar effects on personal income, tax revenue, prices and profits. It was reaching the point where Americans were losing confidence in the management of the economy and turning to the dependable store of value, gold. This in turn, depleted the Federal Reserves supply of gold down to almost the minimum legal requirement causing more uncertainty in the economic markets. At this time, the United States of America was still locked into the gold standard, hence making gold an alternative form of valuable tradable currency. On March 6th, 1933, the Roosevelt set in motion events that ended the international gold standard once and for all in America.

It is generally believed that the gold coins sold to the government were all melted or refined into bullion bars. However, this was not the case as there was an advantage to keeping them in there still gold coin form.

As with the official price of gold set at $35 an ounce, a foreign bank presenting $3.5 million paper dollars received 100,000 ounces if the Treasury delivered gold bullion bars. However, if the Treasury delivered gold coins with a face value of $3.5 million, it delivered only 96,750 ounces, saving 3,250 ounces. Why is this, well each $20 Liberty and St. Gaudens (Double Eagles) only contains .9675 ounce of gold. Therefore, it was to the Treasury Department's advantage to give out U.S. gold coins instead of bullion bars

For some of you keen eyed readers, thinking hang on, I thought the gold was valued as $20 per ounce. Well, one thing Roosevelt did was confiscate the gold at approixmately $20/oz and then reset gold to $35 after they aquired enough gold from the citizens of America.

So in this series of events Roosevelt increased the government's gold assets, helped to stabilize the monetary system. However, this also inflicted losses of 40 percent on the previous gold owners meaning the government now held an asset the rest of the world valued, where citizens now held the devalued paper dollar.

In 1974, President Ford repealed this order and restored the right to own gold again. Congress in 1977 enabled the right to own gold further by taking away the right of the President to control and regulate gold transactions unless the in war. Any other national emergencies meant it was no longer possible for the President to have an authority to confiscate it from U.S. citizens.

Gold confiscation, has been and is still is a hot topic on gold investors. With some investors in the camp that this will not happen again whilst others predict it will, but one thing is that all gold investors agree on is that they don't want it to happen to them.