Golden Disobedience


This week, we’d like to post a fun article by our friend, Sandy Sandfort. Sandy is a wealth of interesting stories, and he has a new website in the works. If you’d like to be notified when it goes live, send a note to:

Inertia is a human frailty. Too often, we go along to get along. We conform. Because of this, those who claim authority can get most of us to do their bidding if it comes with a plausible justification and is only incremental. We get nickel-and-dimed to death, the death of a thousand cuts.

Back on April 5, 1933, His Majesty, Franklin Delano Roosevelt (FDR), had a pen and a telephone. So he issued Executive Order 6102, which made it a federal crime for Americans to own or trade gold anywhere in the world. There were some minor exceptions for some jewelry, industrial uses, collectors’ coins, and dental gold, but the vast majority of the gold had to be turned in.

My father instantly understood what was going on and he didn’t like it. “They’re going to devalue the dollar!” he predicted.

Roosevelt didn’t give much time to comply either. The deadline was May 1. And if Americans did not comply, they faced criminal prosecution under the Trading with the Enemy Act of 1917. Scofflaws were looking at a fine of up to $10,000 (1933 dollars, about a third of a million dollars today) and up to ten years in prison.

My parents made the conscious decision to become outlaws.

At every possible opportunity for the next three weeks (and substantially longer), my parents followed Gresham’s law (“Bad money drives out good.”), not federal law. They spent paper and collected gold. My father was a dentist, so he could own some dental gold, but that wasn’t enough. He wanted to covert as much paper into gold as possible. So he gave his patients discounts for payment in gold. “Sam,” a neighbor who was a banker, also helped collect gold for himself and my parents. They would repay his help later when they periodically ‘laundered’ gold for him and themselves.

Even after the deadline, gold still kept coming in. Mostly it was from people who didn’t have the time or the inclination to turn in their gold to the government. However, many feared prosecution and were happy to deal with my parents instead of FDR. Plus they got a better deal.

So where did they launder their tidy little nest egg? Why, “South of the Border, Down Mexico Way,” of course. Mexico had no Executive Order 6102.

My mother was born in the mountains above Albuquerque, New Mexico, and spoke fluent Spanish. She and my father loved traveling though the backwaters of Mexico. At first, they traveled alone, and later, after my brother and I came along, the whole family (including the dog) would go exploring in the land of mañana. (Somewhere there is a picture of me, age one, sitting on a portable potty, experiencing my first-ever bout with “Montezuma’s revenge.”)

My parents carried whatever gold they intended to sell, stashed in the car or on their person. The usual routine was to go to the section of town where casas de cambio were found. (Think of it as the “Street of the Money Changers.”) My mother – all 5’1” of her – would go down the street and show a gold double eagle to every money changer at every kiosk and storefront. In Spanish, she would ask, “How much will you pay for these?” When she found the best price, she would give my father the high sign. He would join her and they would conclude the deal. Sometimes the gold was theirs, sometimes, Sam’s. Sometimes they got pesos and sometimes dollars, depending on what they needed at the time.

So, the ‘illicit’ gold paid for a fun trip and got converted to ‘clean’ funds for themselves and Sam. What’s the crime in that?

And the Beat Goes On…

My family never showed much respect for government laws, per se. No victim, no crime, even if the government disagreed. The general ethical belief of the Sandfort family was pretty much in harmony with the Golden Rule. It had worked for cultures and religions for thousands of years and it worked for us. That was our law. Man-made laws either adhere to the Golden Rule (don’t murder people, duh) and so are unnecessary, or they violate it, such as “The War on (Some) Drugs,” so they were nominally complied with, ignored, or circumvented.

So, when wartime laws said that a seller had to follow certain rationing rules to sell his own products, many buyers and sellers simply conspired to make their own decisions. When my parents needed and could afford a new car for business, the local Chevy dealer was happy to ‘cook the books,’ take their money, and give them a new sedan.

Later, when my family traveled in that car and others, my mother would prepare food for us to eat as we drove. We stopped only for gas… and the agricultural inspection station at the California state line. Of course, we had items that we were required by law to declare, but if you hide them in your backpack or under the car seat and lie, you can save a lot of time and keep from having to throw away perfectly good food.

And then there was the time we smuggled a live Mexican iguana in a cigar box, but don’t get me started…

Paul Rosenberg

30 thoughts on “Golden Disobedience”

  1. Yes, I was brought up in that area near Texas and Mexico. I know how they operate. Kudos to your mom and dad. I really like them!

  2. If in the future President, say, Trump decided to order everyone to turn in greenbacks for a whole new currency called “redbacks” then the individuals who would hold to greenbacks would hardly be complaining that they own the greenbacks. In other words, greenbacks are the property of the U.S. Government. By the same token “FDR stole our gold” is wrong rather he was recalling the part of the U.S. currency which happened to be made of gold. After all, you point out your mother had a double-eagle – blatant U.S. property as opposed to, say, her grandma’s 24 carat broach. It clear the goldbugs were illegally holding on to U.S. property by defying the order.

    1. Absurd comment. Low information thinking with a strong emotional hostility to gold and/or sound money.
      The Constitution authorizes Congress, “To coin Money, [and] regulate the Value thereof”, and says that, “No State shall… coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts”. In plain English, Congress was authorized to coin a uniform currency and “regulate” (make regular) its value (weight, purity, etc…). In conjunction, states could not coin their own currency, could not issue paper money (like today’s federal reserve notes (which the implicit logic of the enumerated powers structure also prohibits the federal government from issuing)), and could not make anything other than gold and silver coin legal tender. Thus, the Constitution only authorizes gold and silver as legal tender and prohibits paper money.
      With that backdrop, the federal government, via its mints, were merely issuers of coinage. The federal government doesn’t own the money it issues into circulation. The federal government is a legal fiction, much like a corporation. Corporations issue shares to shareholders, public and private. Those shareholders are owners of those shares which represent a legal claim on the assets of the corporation. The corporation doesn’t own those issued and outstanding shares, unless the corporation buys those shares back (think Treasury Stock). Likewise, coinage issued by a government is no longer the property of the issuing government when the coinage is in circulation. Coinage ownership is just like stock ownership, except the coinage does not represent a claim on the assets of the government and there is no real counterpartly risk (as you might have with stocks, bonds, etc…).
      In today’s crazy, fiat currency world, there are all sorts of restrictions on what you can do with paper money. None of these restrictions are constitutional (since the paper money is itself unconstitutional), and none of these restrictions are consistent with property rights or the basic principles of a free society. People who did not surrender their own property (gold) to their arbitrary rulers should be commended for upholding the Constitution and defying the fiat decree of a dictator.

      1. KJ… Excellent exposition, but I suspect it will have little impact on such an appallingly dim mentality as oatwillie. I enjoyed it however, thank you for writing it.

    2. Boot licking imbecile…. Is it your belief that CITIZENS only “rent”money? From which they can be “evicted” at the whim of the landlord? Every so often, irrefutable evidence that people like you exist appears. It’s still always a shock.

      1. So why it illegal for you deface, destroy, counterfeit that which you own? If it yours you should be able to do with it what you wish, right?

        1. From the very inception of the US Mint, people were able to bring bullion to the mint in order to be converted into coins for a fee, with the resulting coinage being returned to its owners. How you get from this that those coins are the property of the government is definitely a mystery. Perhaps you could consult with whoever you paid to educate you on the subject and request a refund, as it appears you were badly misled.

        2. Gil wrote, “So why it illegal for you deface, destroy, counterfeit that which you own? ” Actually it isn’t for the most part. There is no law against lighting your cigar with a hundred dollar bill if you are so inclined, so you will have to drop “destroy” from your rant. “Counterfeiting” is completely orthogonal to this discussion. It is a form of fraud. So that leaves “deface.” In this case, “deface” is a word of art. If you draw Mickey Mouse ears on George Washington, you may be being disrespectful, but you have not legally “defaced” the one dollar bill. If however, you remove the corner number 10s from a saw buck and past them over the number 1s on a one dollar bill and pass it off as a 10-dollar bill, THAT is defacing it. Ditto for shaving gold or silver coins. You know Gil, it is always a good idea to actually do some research about those things you intend to spout off about so as not to appear ridiculous. Just a suggestion. Feel free to continue to say silly things if you like. :o)

      1. There is obviously no reasoning with this cretin. And a note to Disqus: FUCK you, for deleting my original comment to Gil. You pathetic bunch of schoolchildren..

  3. I don’t believe this sort of black market trading will be possible in the years to come thanks to all the new technology and spying and records kept on us. More importantly, we have lost the concept of innocent till proven guilty. How many times have we heard of police confiscating cash till it could be proven that it was NOT drug money?
    They are already limiting the use of cash in some state in pawn shops and garage sales.
    No. The day is coming when every transaction will be monitored and people will be too beaten down to participate in such a way.
    And ever notice how many stores won’t take a large bill any more? I think that is another way to make hidden cash harder to use.
    Hey one more rant. Think about this: right now we are printing trillions of dollars. Without a gold standard, a dollar really is just paper. So when the gov’t needs money, they print it. So why do they need the specific dollars that YOU or I hold. Why do we go thru the whole tax system any more, and allow the IRS to fine us if they think we did not give them enough of our “dollars” when they just print it ANYWAY.
    So maybe I get audited and cant find receipts to prove something and so I have pay $1000 fine. They don’t need “my” $1000 or THAT $1000. They’re printing it all day long!!
    This whole tax system is just holdover from the days of limited money supply when every paper dollar actually represented gold and “MY” dollars WERE important or an actual piece of an actual pie; a time when “MY” dollars DID represent wealth or value and taking my dollars DID represent an exchange of value. They don’t any more. So why all the effort to track them and take them from me.
    A counterfeiter creates something that LOOKED like something of value but it wasn’t. So he would exchange his “nothing” for “something”. Today the government is biggest counterfeiter in the history of the world. Today, ALL cash is “nothing”; so why does the government still want the specific ‘nothing’ in my possession?
    It looks like it makes sense, but it does not. Soon that will become apparent and the game will implode.

    1. A way to push back is to use legal tender laws to force companies to accept cash. I forced a mortgage company to accept cash payments from me, because if you take a witness and a company refuses to accept cash as payment the remedy is the debt not only can be forgiven but you are paid treble damages. I was the only person paying in cash at that mortgage company. Needless to sat they weren’t happy.

        1. It says it right there on the note, “THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE.” This law is necessary to force people to except fiat currency.

  4. Great story.
    One of the great tragedies of history is that Americans have so easily exchanged their freedoms and liberties for the lies of politicians and government bureaucrats.

  5. All the experts are telling you to hold gold and silver and the strategies for this. But few venture to describe real life events about what might become of it and how to make use of it. This was a fun and educational read. Glad to hear, also, that not all Americans let FDR pick their pockets without an ounce of push back.

  6. The only issue I have with this article is that E.O. 6102 says clearly that it applies to “Persons” and words have legal meaning. So, in this case, unless you were or are a U.S. Person, such words of art do not apply to you. Here’s what the law says:
    If one is not (a) a federal worker, i.e., an “employee”
    receiving “wages” and/or being engaged in a U.S. “trade or business”; or (b)
    receiving funds that come from the federal government; or (3) a citizen or
    resident of a federal jurisdictional area, such as the D of C, or has elected
    to be treated as such, then in the case of not being a target as described in
    “(3)” one cannot be a “U.S. Person” as defined below:
    (30) United States person
    The term “United States person” means—
    (A) a citizen or resident of the United States,
    (B) a domestic partnership,
    (C) a domestic corporation,
    (D) any estate (other than a foreign estate, within the
    meaning of paragraph (31)), and
    (E) any trust if—
    (i) a court within the United States is able to exercise
    primary supervision over the administration of the trust, and
    (ii) one or more United States persons have the authority to
    control all substantial decisions of the trust.
    The term “United States” appears in 3121 (e) (2) and 7701(9) and is
    defined below:
    (e) State, United States, and citizen
    For purposes of this chapter—
    (1) State
    The term “State” includes the District of Columbia, the
    Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
    (2) United States
    The term “United States” when used in a geographical sense
    includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and
    American Samoa.
    7701(9) United States
    The term “United States” when used in a geographical sense
    includes only the States and the District of Columbia.
    In 7701(30)(E) we find that under the definition of a
    “United States person” we find the following reference to “any trust”:
    (E) any trust if—
    (i) a court within the United States is able to exercise
    primary supervision over the administration of the trust, and
    (ii) one or more United States persons have the authority to
    control all substantial decisions of the trust.

    1. Hardly anyone is a “US Person” but hardly anyone knows it, because the US govt. won’t correct their mistaken use of the term. In fact, it is common for the govt. to prosecute non-US Persons as US Persons, e.g., when collecting the income tax.

  7. We messed up as a country when Executive Orders from one person became law.
    Not for an emergency situation, but law from now on well after said person leaves office.
    Conveniently the Congress goes along with this because if it is politically unexceptable and using the President to make the law makes it okay because Congress is not at fault for making the unexceptable law.
    From a court standpoint, is this unconstitutional?
    Not if the court rules by convenience rather than law.
    We have many laws. So many that it is logistically impossible even for a lawyer to know them all.
    So the defense thrown away by judges that Ignorance of the law is no defence is really ridiculous because no one really knows what the law actually says.
    EPA law and regulation is a good example. It was fashionable to make EPA law.
    So now to read the law you would need at least ten semitruck loads of paper written law and regulation to even know what it actually says. Much of which probably contradicts one another.
    The IRS is in a parallel situation. This is an incredible complex law that when 10 agents answered questions years ago, 8 of the 10 were wrong!
    If this were zoning law, the obvious discrimination would have the courts throw the law off the books. To do so would create chaos in the government as they could not get paid. Lots of luck seeing the massive bureaus brought down by discrimination law.
    What the courts do is convenient for the courts and has little basis in actual previous law. Basically at this point in time, whatever is convenient is how the courts are likely to rule.
    We are ruled by lawyers in a Congress. Most have a licence to practice law.
    Or a degree in law.
    The fact is that lawyers make law for lawyers not anyone else.
    Blatant theft of property by seizure? Only a court set up by lawyers for lawyers would even consider this to be really legal.
    The only safe carry of cash is by means of credit cards! And I am not even sure that is safe any more.
    This country likes to think it was founded by puritans. And originally maybe it was.
    But starting with pirates in New Orleans, the Adams Family of smugglers (over 30 ships smuggling contraband bypassing England), The debauchery of Ben Franklin in Europe, that all changed.
    We are a nation of thieves. And the greatest of these thieves is a court system set up for thieves in the clan known as the Bar Association. Supported in part by the making of laws by lawyers in a congress in which 97% estimated are millionaires devoted to keeping the rich people rich.
    Think not? How many of you obeyed the speed limits in your town going down the street the last time you drove an automobile?
    Cops are told not to stop people unless they are substantially over the speed limit.
    Our laws are a working farce. So your Mom and Dad using Mexico to bypass the theft of a President? Good for them if they got away with it.

  8. “We messed up as a country when Executive Orders from one person became law.”
    Actually, we didn’t mess up, if you define we as individual citizens instead of lumping us all in with government employed moral retardates.
    Under the US Constitution, only Congress can make laws. Executive orders are actually only binding on elected or appointed officials and employees of the Executive branch. The rest of us should ignore those orders, as the president has no authority over civilians who aren’t employed by any of his departments.
    Obama has the authority to tell any of his flunkies to drop and give him pushups, but we can tell him to go jump if he orders any of us to do anything at all.

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