A Fascinating Look At Gold's History In U.S.

NumisMaster has webbed a fascinating history of gold and the U.S. by David Ganz. Of special note is his history of how the prohibition on private gold ownership was overturned, because he was one of the players in the debate.

Starting in the early 1970s, a group of “gold bugs” began to advocate private gold ownership rights and eventually they found the ear of some congressmen and senators who bought into their fairness theory and the claimed illegality of the gold seizures and recalls of the 1930s.

In a truly bizzare episode, they tacked a resolution allowing for private gold ownership onto the foreign aid package that the Nixon Administration wanted. Presidential vetoes were threatened and an alarmist attitude prevailed at the main Treasury building.

Into the middle of this stepped Mint Director Mary T. Brooks. In office since 1970, in 1973 she was promoting bicentennial coinage. I had an interview with her in which I asked her about the possibility of a gold commemorative coin for the bicentennial, and she was quite positive about it. That was real news.

A couple of hours later, I got a call from her key aide, Roy C. Cahoon, interdicting the entire conversation – unless I was willing to drop the gold coin remark. I did and the Republic was safe. But Mrs. Brooks made the same comment weeks later to Russ Rulau, a competitor, then editor of Numismatic Scrapbook, and he printed it. The Republic was still safe and, for me, a valuable lesson learned; the government didn’t always know what was best....

Standing up for the right to own gold and for the medallions was President of the American Numismatic Association Grover C . Criswell Jr. I accompanied him, and wrote his written testimony, in my capacity as ANA legislative counsel.

Criswell’s summary of five reasons why gold medallions were appropriate (it being obvious that Congress was at least several years away from authorizing gold coins): (1) it helps the balance of payments; (2) it provides clear domestic economic beneficial effects from the sale; (3) it denies $600 million in assistance to South Africa; (4) it returns gold to the people who gave it to the government in the first place – the American people; and (5) it raises more money than the government’s auction plans for gold bricks in $80,000 units and above....

The article opens with a description of how the gold price is fixed in London. Only five representatives of five firms are responsible for the fixing, and it's done by conference call now. Earlier, there was a physical meeting at the Rothschild bank.


The U.S. prohibition was pretty much confined to the U.S. It's always been legal to own gold in Canada, and the flagship store of the Hudson's Bay Company used to sell sovereigns for ten Canadian dollars back in the 1960s. Half-sovereigns were a fiver. Until the prohibition was overturned, the only North American exchange to trade gold futures contracts was the relatively minor Winnipeg Commodities Exchange. A 400 oz gold contract was introduced in 1972, prompting the Exchange to change its name from the Winnipeg Grain Exchange.