Executive Order 6814 Required Turning in of Silver Bullion to the U.S. Government.
Silver U.S. and Foreign Coins Were Exempt From the Order.
Nearly 123 million ounces of silver were turned into the U.S. Mint from 1934-1938
The U.S. Needed Silver To Mint Coins
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How Did The Government Know Who Had Silver Bullion?
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Executive Order 6814 is not a fictional future act of government, like the passing of the 211th, 212th and 213th Amendments to the Constitution, but an actual Presidential Order by Franklin Delano Roosevelt in 1934 confiscating silver in the United States.
The order dated August 9, 1934, was entitled Executive Order 6814 Requiring the Delivery of All Silver to the United States for Coinage and required all persons to deliver silver to the U.S government pursuant to the Silver Purchase Act of 1934, subject to certain exemptions.
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Following are frequently asked questions about Silver Confiscation Under Executive Order 6814:
What Silver Had To Be Turned In?
Silver “situated in the United States”;
Silver of a fineness of 80% or more; and
Silver held in quantities over 500 troy ounces by any one person.
What Silver Was Exempt?
U.S. silver coins (of which U.S. dimes, quarters, half dollars and dollar coins were 90% silver at the time) and foreign silver coins;
Silver that was of a fineness less than 80%;
Unprocessed silver (less than 80% fineness) that was mined in the United States after December 21, 1933;
Silver contained in articles fabricated and held in good faith for a specific and customary use and not for their value as silver bullion (presumably silver ornaments, jewelry and/or silverware); and
Silver held for industrial, professional, or artistic use in amounts less than 500 troy ounces per person.
N.B. There was no “investment” exemption. Holding silver bullion of 80% of higher fineness in bar or round form in any amounts that was not for “industrial, professional, or artistic use” was required to be turned in.
How Much Did People Get For Their Silver?
People turning in their silver got $1.29 an ounce. Payment was made in the form of “standard silver dollars, silver certificates, or any other coin or currency of the United States.” There was a catch however; there was fee of 61 8/25 percent (61.32%) taken from the $1.29 an ounce for “seigniorage, brassage, coinage, and other mint charges.” After the fee, it worked out to a payment of about fifty cents an ounce, which was about five cents higher per ounce than before Executive Order 6814. Thus, the $.50 price was a non market, nationalized price.
How Much Silver Was Confiscated?
Nearly 113 million ounces.
112,937,925 ounces of silver were “nationalized” pursuant to Executive Order 6814.
1935: 112,301,335 ounces
1936: 650,452 ounces
1937: 68,777 ounces
1938: 17,361 ounces
Silver Acquired Pursuant to The Silver Purchase Act of 1934
An additional 1.353 billion ounces of silver were purchased under the Silver Purchase Act of 1934.
Over 1.3 billion ounces of silver were acquired pursuant to the Silver Purchase Act of 1934.
Source: Silver Money (Cowles Commission for Research in Economics Monographs, No. 4)
What Did The Government Do With The Silver?
The U.S. government presumably needed the silver to mint coins or to “print money”. In 1918 pursuant to the Pittman Act, the U.S. melted down over a quarter of a billion (270 million) U.S. Silver dollars and converted them into silver bullion and sold it to England who needed the silver to alleviate a silver coin shortage in India which was a colony of England’s at the time.
Under the Pittman Act, the amounts of silver sold to England would have to be replaced by minting new silver dollars. In 1921 the replacement process began as the U.S. Mint recommenced minting Morgan Silver Dollars which hadn’t been minted since 1904. Also in 1921, the U.S. Mint began producing Peace Dollars.
The Pittman Act of 1918 was sponsored by Key Denson Pittman, a Senator from Nevada, a state with a large silver mining industry, such that its nickname is the “Silver State”. Senator Pittman was a fierce advocate for the silver industry. The Pittman Act provided that all that silver that was melted down and sold to England would have to be replaced. Most of it would come from Pittman’s home state of Nevada’s mines AND at a subsidized price of $1 an ounce!
The Silver Purchase Act of 1934 was also sponsored by Senator Pittman.
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The chart below shows that the bulk of silver the U.S. used to mint coins the 1920’s went into replacing the silver dollars melted down pursuant to the Pittman Act. Little silver went into the minting of dimes, quarter and half dollars.
From 1921-1923 an over 171 million ounces of silver was used to produce 90% silver U.S. coins. Of the silver used, 95% went into producing silver dollars which meant that there was not enough silver to mint sufficient quantities of dimes quarter and half dollars. From 1921-1923, 171,821,261 ounces of silver were used to mint U.S. dimes, quarters, half dollars and dollars. Of that, 163,338,884 ounces or over 95% of the silver used went to produce silver dollars!
Amount of Silver Used to Mint U.S. Dimes, Quarters, Half Dollars and Dollars 1921-23
The enormous sum of 163,388,884 ounces of silver or 95% of the 171,821,261 total ounces of silver used to mint U.S silver coins from 1921-23 went to mint silver dollars.**
In comparison, prior to the Pittman Act of 1918, less silver was used for minting U.S. coins and the silver used was distributed more evenly among dimes, quarters, half dollars and dollar coins. For example, consider the three year period from 1894-1896, illustrated below when about 29 million ounces of silver were used to mint silver coins and 64% of that silver went to produce silver dollars vs. 95% during the period of 1921-23 above.
Amount of Silver Used to Mint U.S. Dimes, Quarters, Half Dollars and Dollars 1894-96
The minting of silver dollars from 1894-96 took up the bulk of the 28,660,046 ounces of silver used to mint U.S. silver coins during those years.
U.S. Dimes, Quarters and Half Dollars Get A Boost From the Silver Purchase Act of 1934
The first ounces of silver started flowing into the U.S. Treasury on August 14, five days after signing of Executive Order 6814. With the silver acquired from the Silver Purchase Act of 1934 pursuant to Executive Order 6814, the U.S. Mint ramped up silver coin production that had slowed and even come to a standstill in the late 1920’s early 1930’s. Only approximately 9% of the 63,503,999 ounces of silver used to mint dimes, quarters, half dollars and dollar coins from 1934-36, however, went to produce silver dollars.
Amount of Silver Used to Mint U.S. Dimes, Quarters, Half Dollars and Dollars 1934-36
Mintages of dimes, quarters and half dollars rose during the period of 1934-36.
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See the notes below for an overview of the mintages of U.S. coins from 1920-1936.
How Did The Government Know Who Had Silver?
While the U.S. government could not have known of all of the silver “situated in the United States”, silver researcher Charles Savoie notes that the U.S. kept a document listing the “Hoarders of Silver”. The document showed individuals who held “spot silver and futures contracts” in amounts over 50,000 ounces of silver. You can see the list by clicking here.
Did President Roosevelt Sign Other Executive Orders?
In “Think Fed Destroyed the Dollar?” we noted that executive orders can be more devastating to individual and economic freedom than any act of the Federal Reserve. In that post we covered Roosevelt’s Executive Order 6102 of April 5 (issued 16 months earlier than Executive Order 6814) that required U.S. citizens to turn in their gold to the U.S. government.
In 1942, President Roosevelt issued Executive Orders No. 9066 and 9102 authorizing the removal and internment of Italian, German (who were spared internment) and Japanese Americans. For more on Roosevelt’s concentration camp orders see Una Storia Segreta : The Secret History of Italian American Evacuation and Internment During World War II
How Was Executive Order 6102 (gold) Different Than Executive Order 6814 (silver)?
Each of Executive Orders 6102 and 6814 effectively nationalized gold and silver by requiring the delivery of gold and silver to the government. The gold executive order, like the silver executive order had an exemption for jewelry but did not contain an exemption for coins.
The gold executive order removed the monetary properties of gold from the citizens’ hands as gold coins were required to be delivered to the government and no further gold coins would be issued by the United States for general circulation.
In contrast, the silver executive order specifically excluded silver coins (i.e. dimes, quarter, half dollar and dollar coins) the people may have had at the time. Silver was needed to make more silver coins, so requiring them to be turned in to recast them into new coins would have been counter productive, other than perhaps to collect the 62% fee and/or to create work, a hallmark of FDR’s failed “New Deal”.
FDR’s Silver and Gold Deals
Those turning in their silver got a better deal than those turning in their gold. The government paid $20.67 for an ounce of gold in 1933. Then in 1934, the government revalued the price of gold higher to $35, resulting in 40% devaluation in the dollar consideration received. Those turning in silver ostensibly got an even worse deal, losing 62% of the value of their bullion, in effect getting $.50 an ounce of the $1.29 an ounce stated silver price. The price of silver, however had fallen to a low of about $.25 an ounce in 1932 to a high of about $.80 an ounce in early 1934 and was t $.49 cents an ounce at the term of the EO 6814. Thus, other than the mandatory aspect, the silver price appeared fair.
If a profit was made from redeeming silver at the $.50 price, it was taxed at 50%.
For the period of time during which the Silver Purchase Act was in effect the $.50 an ounce price of silver was the set benchmark. Although in October of 1934 the price of silver rose to $.55 an ounce and traded between $.53 and $.56 during the rest of the year.
Source: Silver Money (Cowles Commission for Research in Economics Monographs, No. 4)
When Did The Confiscation End?
The Silver Purchase Act of 1934 expired on December 31, 1937.
Do Executive Orders Set Precedent for the Government to Confiscate Gold and Silver Again?
Yes and no.
Yes, in that both executive orders highlight that an unchallenged President can nationalize any commodity for any reason at any time.
No, in that the reasons for gold and silver confiscation in 1933 and 1934 do not exist today. Gold and silver were recognized by the United States government as money and were functioning as such. Gold was taken to give the government control over the nation’s wealth and to remove it from the citizens’ day to day transactions. Silver was taken in order to make coinage. Neither of these reasons exist today. The government does not recognize either gold or silver as money. The U.S. has not backed the dollar with gold since 1971 and has not minted silver coins since 1965.*
In the unlikely event that the U.S. wished to re back the dollar with gold, it presumably has sufficient quantities to do so. The U.S. officially has over 8,000 tons of gold in the vaults at Fort Knox, West Point and the New York Fed, much of it acquired during the 1933 confiscation. If indeed the U.S. did not have enough gold to back the dollar, it could easily print dollars to buy gold on the open market, without having to recoup what little gold might be in U.S. citizens’ hands.
It more unlikely that the U.S. would wish to re-issue silver coins than it would be for the U.S. to wish to reback the dollar with gold. Technology has led to a decline in cash/coin transactions and if the government wished to execute a heavy handed order to confiscate silver they almost certainly would not include in that order a provision to mint silver coins and put them back in circulation for people to spend them as they pleased in an untraceable manner.
If the government decided for whatever reason, monetary or strategic, that it need as much gold or silver as possible it could get the vast majority of it by nationalizing the gold and silver mines and by confiscating gold and silver held in COMEX approved vaults and the vaults that hold gold and silver for exchange traded products. This would lessen the need to order its citizens to turn in their precious metals.
*The United States Mint produced 1964 dated 90% silver dimes, quarters and half dollars well into 1965. For more on the final year of U.S. Silver Coinage, click here.
** CORRECTION: The Mercury Dime Mintage for 1921 was 2,310,000 NOT 12,310,000.
The mistake derives from an error in the Official Read Book (2015 AND 2016 editions) that says 11,230,000 (P) 1921 dimes and 1,080,000 (D) 1921 dimes were mintage. Add those two number and you get 12,310,000. The correct lower mintages are 1,230,000 (P) 1921 dimes and 1,080,000 (D) Mercury dimes. The online version contains the correction
Also see “The Last Silver Empire”
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