In the 1930s the value of American currency dropped due to the Great Depression, and the demand for gold skyrocketed. Due to the gold standard, the Federal Reserve guaranteed that currency could be exchanged for equivalent values of gold. The demand was so great that the Federal Reserve’s gold stocks were emptied, and they were no longer able to exchange currency for gold.
To remedy this and to fight the out-of-control deflation, President Roosevelt suspended and then eventually eliminated the gold standard. The president then issued Executive Order 6102, which forced private gold owners to sell their gold to the U.S. government at a set price. This Executive Order forbade individuals from gold ownership, aside from a small number of coins with numismatic value. President Roosevelt resurrected the gold standard in 1934 and the gold ban was eventually lifted in 1979. However, the gold ban and the temporary dissolution of the gold standard had four long-lasting effects on the American market.
- Restored the value of currency
- Caused a surge of counterfeit coins
- Removed many denominations from the public
- Extreme rarity and value of the 1933 $20 double eagle
Restored the value of currency
When President Roosevelt eliminated the gold standard in 1933 and then restored it in 1934 with limitations, he sought to increase the value of American currency, as well as inflating the value of American products such as wheat and cotton. Most historians believe that these efforts were successful, and had a significant impact on America’s recovery from the Great Depression.
Caused a surge of counterfeit coins
When Executive Order 6102 went into effect, it forced Americans to sell their gold to the U.S. government at a set price. It therefore became illegal to keep gold bullion, and gold coins without numismatic value. Some Americans melted their gold bullion into counterfeit coins to pass them as legally owned. Many coins that were required to be sold to the government were instead stamped over by private collectors to make them appear legitimate.
These coins made from bullion or stamped over are often difficult to detect, because they are made of the right gold composition and appear to be the correct weight. Often, the best way to detect these coins is by their luster and by looking for particular indentation marks.
Removed many denominations from the public
Because the federal government required private gold owners to sell back to the government, many of the coins that were common at the time were melted down for storage. Those coins are now rare and are therefore more valuable.
Extreme rarity and value of the 1933 $20 double eagle
Because of the 1933 gold ban, the 1933 $20 double eagle was never officially released to the public. However, before the ban went into place, it is believed that some collectors were able to exchange their 1932 gold coins for 1933 coins. Therefore, a few legitimate 1933 $20 double eagle coins remained in private ownership.
Because so many were melted down as part of the ban, only thirteen of the 1933 double eagle coins survived. Only one of those coins remains in private ownership.
I have experience recognizing and identifying many types of counterfeit coins. If you would like me to look at any of your coins, or if you would like to learn more about this topic, please stop in and I'd be happy to talk.
Sources:
https://theconversation.com/how-the-us-government-seized-all-citizens-gold-in-1930s-138467
https://www.ngccoin.com/news/article/10645/counterfeit-detection-1915-Indian-Head-Eagle/
https://www.federalreservehistory.org/essays/roosevelts-gold-program