(Zerohedge) It's been [89] years since the federal government, on the spurious grounds of fighting the Great Depression, ordered the confiscation of all monetary gold from Americans, permitting trivial amounts for ornamental or industrial use.
A key piece of legislation in this story is the Emergency Banking Act of 1933, which Congress passed on March 9 without having read it and after only the most trivial debate. House Minority Leader Bertrand H. Snell (R-NY) generously conceded that it was "entirely out of the ordinary" to pass legislation that "is not even in print at the time it is offered." He urged his colleagues to pass it all the same:
"The house is burning down, and the President of the United States says this is the way to put out the fire. [Applause.] And to me at this time there is only one answer to this question, and that is to give the President what he demands and says is necessary to meet the situation."
Among other things, the act retroactively approved the president's closing of private banks throughout the country for several days the previous week, an act for which he had not bothered to provide a legal justification. It gave the secretary of the Treasury the power to require all individuals and corporations to hand over all their gold coin, gold bullion, or gold certificates if in his judgment "such action is necessary to protect the currency system of the United States."
The Emergency Banking Act reached back in time to amend the Trading with the Enemy Act of 1917, which had originally been intended to criminalize economic intercourse between American citizens and declared enemies of the United States.
One provision of the act granted the president the power to regulate and even prohibit "under such rules and regulations as he may prescribe … any transactions in foreign exchange, export or earmarkings of gold or silver coin or bullion or currency … by any person within the United States." In 1918, the act was amended to extend its provisions two years beyond the conclusion of hostilities, and to allow the president to "investigate, regulate, or prohibit" even the "hoarding" of gold by an American.
After those two years elapsed, people generally assumed that the Trading with the Enemy Act had passed into desuetude. But the Supreme Court later explained that the act's provisions were not limited merely to World War I and the two years that followed — it "stood ready to meet additional wars and additional enemies" and could be called into service once again under those circumstances. (Little did anyone suspect in 1917 that these "additional enemies" would turn out to be the American people themselves.)
As amended by the Emergency Banking Act of 1933, the Trading with the Enemy Act no longer said that simply "during time of war" could the president prohibit the export of gold or take action against "hoarding" (i.e., holding on to one's money). Now these actions could be taken during time of war or "during any other period of national emergency declared by the President."
A month later, claiming authority from the Emergency Banking Act and its amendment to the Trading with the Enemy Act, the president ordered all individuals and corporations in America to hand over their gold holdings to the federal government in exchange for an equivalent amount of paper currency.
On June 5, 1933, at the behest of the president, Congress took the next step, passing a joint resolution making it illegal to "require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby."
Any provision in a private or public contract promising payment in gold was thereby nullified. Payment could be made in whatever the government declared to be legal tender, and gold could not be used even as a yardstick for determining how much paper money would be owed.
See the full article Zerohedge.com
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