GOVERNMENT RECALL OF GOLD IN 1933

Times were very good for many Americans in the mid- to late-1920s: the stock market had grown exponentially -- driven, in part, by a frenzy of investing which sent stock prices well beyond their true value. In 1929, the frenzy ended. Black Tuesday started a stock market crash which ultimately led to the Great Depression. By 1933, the demoralized nation looked to Washington, D.C. and President Franklin D. Roosevelt for salvation. Seeking to inflate the dollar in an effort to combat the depression, the United States government issued an order recalling gold bullion from American citizens under threat of fines or imprisonment. There were certain limited exceptions. One of the most notable exceptions was that Americans could continue to own:

"gold coins having a recognized special value to collectors of rare and unusual coins."

You can view the Executive Order and read the terms of recall by clicking on the highlighted graphic.

Following the recall, in 1934 the government devalued the dollar and raised gold's value by nearly 75%. Many of the gold coins which were recalled were later melted.

Rare coin collectors, exempt from the Executive Order profited from the recall, melting, and price revaluation in two important ways. Their coins gained value because:

1. The price of gold increased from $20 per ounce to $35 per ounce.
   
2. Official melting of the recalled gold coins lead to greater scarcity for those coins exempt from the Order.

The events of the 1930s and the decades that followed help to prove the importance of owning collectible gold coins.