Gold Confiscation Order of 1933

Wednesday, 14 January 2009 09:16

This is a transcript of the Gold Confiscation Order of 1933.  President Roosevelt gave the public 25 days to turn in their gold or face a hefty fine and up to 10 years imprisonement.  After the transcript is a link to see the actual order in pdf format.

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UNDER EXECUTIVE ORDER OF THE PRESIDENT
Issued April 5, 1933
all persons are required to deliver
ON OR BEFORE MAY 1, 1933
all GOLD COIN, GOLD BULLION, AND
GOLD CERTIFICATES now owned by them to
a Federal Reserve Bank, branch or agency, or to
any member bank of the Federal Reserve System.

By virtue of the authority vested in me by Secion 5 (b) of the Act of October 6, 1917, as amended by Secion 1 of the Act of March 9, 1933 entitled "An act to provide relief in the existing national emergency in banking, and for other purposes", in which amendatory Act Congress declared that a serious emergency exists. I, Franklin D. Roosevelt, President of the Unitted States of America, do declare that said national emergency still continues to exist and pursuant to said section do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purpose of this order.

Section 1. For the purposes of this regulation the term "hoarding" means the withdrawal and withholding of gold coin, gold bullion or gold certificates from the recognized and customary channels of trade. The term "person" means any individual, partnership, association or corporation.

Section 2. All persons are hereby required to deliver on or before May 1, 1933, to a Federal reserve bank or branch or agency thereof or to any member bank of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them or coming into their ownership on or before April 28, 1932, except the following:

(a) Such amount of gold that may be required for legitimate and customary use in industry, profession or art within a rea- sonable time, including gold prior to refining and stocks of gold in reasonable amounts for the usual trade requirements of owners mining and refining such gold.

(b) Gold coin and gold certiicate in an amount not exceeding in the aggregate $100.00 belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins.

(c) Gold coin and bullion earmarked or held in trust for a recognized foreign government or foreign central bank or the Bank for International Settlements.

(d) Gold coin and bullion licensed for other proper trans- actions (not involving hoarding) including gold coin and bullion imported for re-export or held pending action on application for export licenses.

Section 3. Until otherwise ordered by any person becoming the owner of any gold coin, gold bullion or gold certificates after April 23, 1933, shall within three days after receipt thereof, deliver the same in the manner prescribed in Section 2; unless such gold coin, gold bullion or gold certificates are held for any of the pur- poses specified in paragraphs (a), (b), or (c) of Section 2; or unless such gold coin, or gold bullion is held for purposes specified in paragraph (d) of Section 2 and the person holding it is, iwth respect to such gold coin or bullion, a licensee or applicant for license pending action thereon.

Section 4. Upon receipt of gold coin, gold bullion or gold certificates delivered to it in accordance with Sections 2 or 3, the Federal reserve bank or member bank will pay therefor an equivalent amount of any form of coin or currency coined or issued under the laws of the United States.

Section 5. Member banks shall deliver all gold coin, gold bullion and gold certificates owned or received by them (other than as exempted under the provision of Section 2) to the Federal reserve units of their respective districts and receive credit or payment therefor.

Section 6. The Secretary of the Treasury, out of the sum made available to the President in Section 501 of the Act of March 9, 1931, will in all proper cases pay the reasonable costs of transportation of gold coin, gold bullion or gold certificates delivered to a member bank or Federal reserve bank in accordance with Sections 2, 3, or 5 hereof, including the cost of insurance, protection, and such other incidental costs as may be necessary, upon production of satisfactory evidence of such costs. Voucher forms for this purpose may be procured from Federal reserve banks.

Section 7. In cases wehre the delivery of gold coin, gold bullion or gold certificates by the owners thereof within the time set forth above will involve extraordinary hardship or difficulty, the Secretary of the Treasury may, in his discretion, extend the time within which such delivery must be made. Applications for such extensions must be made in writing under oath, addressed to the Secretary of the Treasury and filed with a Federal reserve bank. Each application must state the date to which the extension is desired, the amount and location of the gold coin, gold bullion and gold certificates in respect of which such application is made and the facts showing extenstion to be necessary to avoid extraordinary hardship or difficulty.

Section 8. The Secretary of the Treasury is hereby authorized and empowered to issue such further regulations as he may deem necessary to carry out the purposes of this order and to issue licenses thereunder, through such offices or agencies as he may designate, including licesnses permitting the Federal reserve banks and member banks of the Federal Reserve System, in return for an equivalent amount of other coins, currency or credit, to deliver, earmark or hold in trust gold coin and bullion to or for persons shoing the need for the same for any of the purposes specified in Paragraphs (a), (c) and (d) of Section 2 of these regulations.

Seciton 9. Whoever wilfully violates any provision of this Executive Order or of these regulations or any rule, regulation or license issued thereunder may be fined not more than $10,000 or if a natural person, may be imprisoned for not more than ten years, or both; and any officer, director or agency of any corporation who knowingly participates in any such violation may be punished by a like fine, imprisonment or both.     This order and these regulations may be modified or revoked at any time.

FRANKLIN D. ROOSEVELT   
The White House
April 5, 1933

For Further Information Consult Your Local Bank

GOLD CERTIFICATES may be identified by the words "GOLD CERTIFICATE" appearing thereon. The serial number and the Treasury seal on the face of a GOLD CERTIFICATE are printed in YELLOW. Be careful not to confuse GOLD CERTIFICATES with other issues which are redeemable in gold but which are not GOLD CERTIFICATES. Federal Reserve Notes and United States Notes are "redeemable in gold" but are not "GOLD CERTIFICATES" and are not required to be surrendered

Special attention is directed to the exceptions allowed under
Section 2 fo the Executive Order CRIMINAL PENALTIES FOR VIOLATION OF EXECUTIVE ORDER
$10,000 fine or 10 years imprisonment, or both, as
provided in Section 9 of the order

Secretary of the Treasury

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Click here to see the actual Gold Confiscation Order of 1933.

 

Brock and Associates, LLC specializes in retirement, estate, tax, and business planning.

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How Big is the Bailout really? ...So far?

Written by Hank Brock, CPA, MBA, CLU, ChFC
Thursday, 04 December 2008 10:47

As more and more come to the Fed begging for cash, the costs are adding up... According to Barry Ritholz, author of The Big Picture, total federal aid (including the Citi bailout) now equals $4.6 trillion – making the credit-crisis rescue the largest government project in history.

Unfortunately, there are four major concerns I see with the analysis below. First, expenditures from the old "New Deal" of 75 years ago haven't ended yet, and so the figures below are grossly understated, and we are facing an expansion of them once again in economic policy. We still have the agencies, authorities, laws, programs, regulations, and other expenditures and drag on economic growth that has perpetuated since those days. Repeated economic studies have shown that The New Deal actually exacerbated the depth and prolonged the length of The Great Depression.

Second, when we consider where and how to deploy assets today, we must look at the period of increasing regulation and tax rates during the 1960's and throughout the 1970's, resulting in a stagnant economy for over 15 years. The increasing regulatory environment probably killed business growth more than did the high tax rates. This is pendulum swing-back is facing us again today.

Third, one program left out of the costs below would the the 2nd war launched by President Johnson, simultaneous with the War in Vietnam, and that is the War on Poverty. It would be interesting to see what the cost of these entitlement programs have totaled. Some would say the War on Poverty, along with Medicare and Social Security, are simply a continuation of The New Deal Keynesian economics, which ultimately blow-up because they are based on a pyramid scheme of ever-increasing newcomers into the bottom level of the pyramid. This worked fine after WWII, until the baby boomers stopped having children. Fortunately, the U.S. is not in the position of Europe and Japan, where their social programs are causing the government to go bust because there is a declining population, and the pyramid is inverted with more retirees at the top than there are workers to support them. 

Fourth, while this study attempts to equalize the cost of these programs by adjusting them into today's dollars, it would be interesting to see the cost of these programs if those dollars had been invested into the private sector, and instead of growing the dollars at the inflation rate, growing those dollars at the growth rate of the stock market, the businesses that create real wealth in an economy, and that hire and employ people off the streets. That might give a different cost to these items.  To this end, these expenditures need to be categorized into a column for investments (such as the Louisiana Purchase and perhaps NASA), versus wars which are purely consumptive (not to say they aren't necessary), versus expenditures that fall somewhere in the middle, like the Marshall Plan and the New Deal.            

At any rate, it is interesting to put the cost in perspective.  James Bianco of Bianco Research calculated the inflation-adjusted costs of other large government programs throughout history. The current bailout is bigger than the following nine programs... combined.  Total cost: $3.925 Trillion.

Program	Cost	Inflation-Adjusted Cost
Marshall Plan	$12.7 billion	$115.3 billion
Louisiana Purchase	$15 million	$217 billion
Race to the Moon	$35.4 billion	$237 billion
S&L Crisis	$153 billion	$256 billion
Korean War	$54 billion	$454 billion
The New Deal	$32 billion (est)	$500 billion (est)
Invasion of Iraq & War	$551 billion	$597 billion
Vietnam War	$111 billion	$698 billion
NASA	$416.7 billion	$851.2 billion
	Total Inflation-Adusted Cost:	$3.925 trillion
	Current Bailout Cost:	$4.6 trillion

Hank Brock is president of Brock and Associates, LLC, a financial consulting firm specializing in asset protection and generational wealth preservation.

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No Surprise With Newest Citi Bailout

Written by Hank Brock, CPA, MBA, CLU, ChFC
Tuesday, 25 November 2008 08:44

Do you remember the three big banks I named in the Brock and Associates’s “Making $ense” newsletter back in March-April?  (See our newsletter “Archives”.)  And the three banks that hold one-third of the $516 Trillion in derivative bets out there?  And all those derivative bets out there that were non-disclosed “off balance sheet” transactions?  Well, read below about Citibank, JP Chase Morgan, and Bank of America. 

For months I have been saying that it will take 2 years for the news to report all the “surprises” out there, and that until all the dirty wash is hung out to dry, the economy will not hit bottom. Well, there’s still a lot to come, and it will take a couple of years.

--Hank Brock

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The Citi Bailout:  What Do You Believe?

by FOX News Crews
By Adam Shapiro, FOX Business Network correspondent
http://onthescene.blogs.foxnews.com/2008/11/24/the-citi-bailout-what-do-you-believe/

It all boils down to one simple question: do you believe them?

The numbers count, but nothing is more important than the faith of consumers, investors and citizens to believe statements from Citigroup and the US government about the most recent bailout to save the financial system, western civilization and “Big Nick’s” on New York’s upper west side (which serves the best burgers north of “Times Square” and to my knowledge has not asked for a bailout).  Trust me, Big Nicks is a part of this, but regarding CITI and Uncle Sam, do you believe them? Standing outside CITI Group headquarters on a cold New York day and listening to all of the experts - remember it was the experts who got us in to this mess - my answer to the question is no, and I hope to be proven wrong.

The 306 billion dollar FDIC insurance plan to save CITI covers a pool of trading account assets, which CITI says totals 458 billion.  (See slide 17 from the CITI Town Hall Presentation given Nov. 17)

Here is the problem: the same trading account assets are 520 billion at JP Morgan Chase and 429 billion at Bank of America.  So, will they now knock on the bailout door? What is different about those trading assets at CITI compared to the assets at JP Morgan Chase and Bank of America? Do you believe the FDIC, FEDERAL RESERVE and US TREASURY - which issued a joint press release saying, “With these transactions, the U.S. government is taking the actions necessary to strengthen the financial system and protect U.S. taxpayers and the U.S. economy”? What do they know that we don’t about those assets at other banks? Or, do you think they will have to step in to help JP Morgan Chase and Bank of America?

CITI insists that its future losses will not exceed 29 billion dollars and that the FDIC will not have to spend one penny to save them.  Really?  Do you believe them? Just last week CITI said, “CITI has a very strong capital and liquidity position….”  Really? Then why did CITI just get an additional $20 billion from the US Treasury?  Did CITI fail to understand its own exposure, or did they simply forget to include the $29 billion in potential future losses from the nifty Nov. 17 town hall pep talk that CEO Vikram Pandit gave CITI employees. It was at this time he notified them that CITI was cutting 50,000 jobs. Great way to motivate the troops.  Seriously, can you believe this stuff is happening?

Finally, this deal does not address the $1.2 trillion off balance sheet assets that CITI insists pose no threat.  (Add loads of sarcasm here) REALLY? We’ve heard that before, and remember 667 billion of that off-book asset are mortgage backed securities. CITI CFO Gary Crittenden says “CITI has enormous capacity to absorb credit losses.” Those off balance sheet assets “are likely not to have a significant impact on CITI over time.” But FOX Business anchor Alexis Glick asked Crittenden what guarantees CITI could give us that those 1.2 trillion wont impact CITI’s balance sheet, and that was a question he did not answer.  So, do you believe them?

Which brings me to Big Nick’s on New York’s Upper West Side. I am really hungry, and a Big Nick’s burger right now would be a lot easier to swallow than what the FDIC, Federal Reserve US Treasury and CITI are serving the American public.

Visit FOX Business Network for the latest news and exclusive coverage on the CITI bailout.

 

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Hank Brock is President of Brock and Associates, LLC, a fee-based financial planning firm specializing in asset protection and generational wealth preservation.  For more information on how to protect yourself during these volatile times, schedule a free consultation.

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A Guide to the Alternative Minimum Tax (AMT)

Thursday, 20 November 2008 08:24

The purpose of the alternative minimum tax is to ensure that everyone pays a fair share of tax. Essentially, a flat tax rate is applied on alternative minimum taxable income in excess of an exemption amount.

The alternative minimum tax (AMT), the government’s attempt to keep people from taking too many tax breaks, went into effect in 1983 and with TRA 1986 the rules were tightened. The alternative minimum tax concept was developed out of the favored or preferred status Congress gave to certain types of income, so-called preference items. To prevent some individuals with large incomes from paying little or no tax, the AMT was introduced. The Tax Reform Act of 1986 made the alternative minimum tax tougher and extended its provisions to thousands of additional taxpayers. Subsequently the Revenue Reconciliation Act of 1993 increased the rates still further.

What constitutes “alternative minimum taxable income?” Generally, it is your adjusted gross income as determined for regular income tax purposes increased by certain tax preference items and decreased by certain itemized deductions.

After taking into account certain tax credits and adjustments, the alternative minimum tax is then computed.

However, the alternative minimum tax is payable only if it exceeds the taxpayers regular tax. Because regular taxes were generally lowered by TRA ‘86 and because the new laws tighten up the alternative minimum tax, many more taxpayers are now subject to the AMT’s bite.

AMT Formula

Basically, the tax is equal to the excess of a percentage of Alternative Minimum Income (less exemption) over the regular tax. The AMT exemption was increased by the Economic Growth and Tax Reconciliation Act. The Working Families Tax Relief Act of 2004 extended the relief and further fine-tuned the law. Most recently, the Tax Increase Prevention and Reconciliation Act of 2005, that became law in May 2006, extended the exemptions and raised the caps.

Exemption amounts of $45,000 (after 2007) on a joint return (or for a surviving spouse), $33,750 (after 2007) on a single return, $22,500 (after 2007) on a married filing separate return, and $22,500 on an estate or trust return, are available in calculating the taxable excess. These exemption amounts are reduced by 25% of the amount by which the AMTI exceeds $150,000 on a joint return, $112,500 on a single return and $75,000 on a separate return or in the case of an estate or trust.

For children subject to the “kiddie tax” the exemption is the lesser of the above amounts or the child’s earned income plus $6,400 (as indexed for 2008).

Alternative Minimum Income consists of one’s adjusted gross income; to which is added back many of the so-called tax preference items that were deducted in arriving at Adjusted Gross Income (AGI).

The Alternative Minimum Taxable Income definition is the AGI less alternative tax Net Operating Loss (NOL) less alternative tax itemized deductions less income from accumulated income distribution plus tax preferences.

To determine what, if any, one’s alternative minimum tax may be is an assignment for a tax professional, for there are many different additions, subtractions, deductions and adjustments to be made in computing the tax.

Triggering Events

Because of the effect on tax planning, you should be aware of what items might lead to the imposition of the alternative minimum tax. Understanding them might assist you in postponing or offsetting them whenever possible. These include:

1. Deducting net operating losses.
2. The excess of accelerated over straight-line depreciation of real estate or leased equipment.
3. Percentage depletion on oil and gas wells and similar projects.
4. Intangible drilling costs.
5. Exercising incentive stock options.
6. Deducting large amounts of non-refundable credits.
7. Deducting large amounts of state and local taxes.
8. Tax-exempt interest on nonessential function bonds.
9. Deductible passive losses.

You should get to know the alternative tax deductions. The 1986 changes were meant to tighten the deduction rules, not to simplify them.

Under these rules, you can deduct qualifying charitable contributions, casualty and theft losses and medical expenses that exceed 10 percent of your adjusted gross income and personal and estate taxes.

However, as mentioned above, you cannot deduct state and local taxes payable. However, Foreign Tax Credits are deductible against the alternative minimum tax after certain modifications. That is an important change to people in states with high taxes, such as California or New York. Until now, tax advisors have commonly told their clients to prepay state taxes to get a deduction.

Nor can you keep deducting certain kinds of interest. There are limits on the amount you can deduct for interest incurred in financing investments - stock purchases on margin, for instance, or limited partnership interests.

For more information on the alternative minimum tax and other year-end tax planning topics, download your free copy of the 2008-2009 Tax Planning Guide (a 36-page guide).

Brock and Associates, LLC is a fee-based financial planning firm specializing in asset protection and wealth preservation. Contact us for more information on how to avoid the alternative minimum tax and for other tax planning strategies.

 

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Remembering Our Veterans

Tuesday, 11 November 2008 08:18

The associates and staff at Brock and Associates would like to recognize and thank all the veterans that have served our great country.  We are grateful for the sacrifices that have been made to ensure our freedom and safety.

 

In Flanders Fields

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

- Lt.-Col John McCrae, May 1915

 

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