by Peter Schiff, Schiff Gold:
For all of economic history, gold has served as the preeminent money. Individuals holding gold could rest easy knowing they had a hedge against economic uncertainty, at least until President Franklin Roosevelt made it illegal to own the yellow metal. 50 years after this tyrannical edict was repealed, sound money advocates should thank Gerald Ford for restoring gold to its rightful monetary role.
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The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.
Gold enthusiasts can celebrate a golden anniversary on New Year’s Eve and simultaneously mark a market manipulation milestone. Fifty years ago, President Gerald R. Ford legalized private gold ownership, allowing Americans once again to stack the regal metal as a wealth-preserving asset and safe haven against monetary inflation and dollar depreciation. Gold futures trading and market meddling also began in the United States a half-century ago.
On December 31, 1974, Ford issued an executive order revoking President Franklin D. Roosevelt’s 1933 decree that criminalized gold hoarding and prohibited American citizens from owning more than $100 worth (about 5 troy ounces at the time) of the demonetized metal. President Ford signed the order without celebratory remarks or public fanfare. He simply released an official statement citing the legal authority he had to take the action.
While no confetti flew or champagne corks popped in the White House to mark the momentous occasion, repeal of FDR’s 41-year-old edict sparked the largely dormant gold industry and restored trading of the yellow metal as a commodity. Gold could be owned, bought, and sold domestically as an investment without risking a $10,000 fine and 10 years in prison. However, gold coins weren’t US legal tender at the time and bullion wasn’t used in official foreign exchange after President Richard Nixon delinked the dollar from gold in 1971.
As the nation’s only unelected president and vice president, Ford didn’t have a political or public mandate to legalize gold, nor was he a fervent goldbug or hard-money proponent. “Mr. Nice Guy,” as the nation’s 38th president came to be known, merely went along with a bipartisan measure passed by Congress four months earlier. The no-name bill—Public Law 93-373—permitted “United States citizens to purchase, hold, sell, or otherwise deal with gold in the United States or abroad.”
Introduced by Sen. James Fulbright (D-Ark.), the legislation was approved by a coalition of Democrats and Republicans following a grassroots movement led by James U. Blanchard III, founder of the National Committee to Legalize Gold. The measure’s passage was attributed to support from free-market gold advocates and its link to a foreign aid package promoted by Nixon. Ford signed the bill into law on August 14, 1974, six days after the partial-term Republican took the presidential oath following Nixon’s resignation over the Watergate scandal.
