October 19, 1971
Congressional Record - Senate: Pages 36,644 - 36,645
By Mr. HATFIELD
S. 2709. A bill to permit American citizens to hold gold in the event of the removal of the requirement that gold reserves be held against currency in circulation. Referred to the Committee on Banking, Housing and Urban Affairs.
Mr. HATFIELD. Mr. President, I send to the desk a bill I am introducing today and ask unanimous consent that it be printed at the conclusion of my remarks.
Mr. President, since 1933, the price of gold in the United States has been fixed and the citizens of our country have not been allowed to own it, except under very limited conditions. President Franklin Roosevelt wanted to reduce the monetary role of gold and took the initial step to this end by supporting the proposition that citizens could not privately own it.
That goal has now been officially accomplished by President Nixon’s announcement in his August 15, 1971, address to the Nation on the economy.
For years, we have tried to maintain the price of gold at $35 per ounce. On the free gold market in London, however, the price of gold has vacillated around $58.50. As Congressman RARICK, who has introduced similar legislation in the House - as has Congressman PHILIP CRANE - has pointed out:
This means that our Government is allowing foreigners to deplete our gold reserves and still make a profit of about $23.50 per ounce.
Today, there are roughly 70 countries that allow their citizens to own gold, in either coin or in other form. Among these countries are representatives of every continent in the world including, United Kingdom, France, Japan, Israel, Egypt, Sweden, Switzerland, Taiwan, Turkey, Hong Kong, Brazil, Panama, Mexico, Canada, and the German Federal Republic. It might be noted that among these countries are some of the most successful economies in the world; allowing their citizens to own gold has not been a brake on their success.
Prof. Milton Friedman points to the historical reasons for taking gold out of private hands of U.S. citizens in a column in Newsweek magazine:
This nationalization was for one purpose and one purpose only: to keep private individuals from profiting by the rise in the dollar price of gold that the government deliberately engineered. Private holders of gold were required to turn their gold over to the U.S. Treasury at $20.67 an ounce when the market price was well above this sum.
This was an act of expropriation of private property in no way different in principle from Castro’s nationalization of U.S.-owned factories and other properties without compensation or from Allende’s nationalization of U.S.-owned copper mines in Chile at a price well below market value. As a nation, we do not have a leg to stand on when we object to these acts of expropriation. We did precisely the same thing to residents of the U.S.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.
SECTION 1. At any time when reserves in gold or gold certificates are not required by law to be held against currency in circulation -
(1) the Secretary of the Treasury shall sell any gold held by the United States to any citizen of the United States on demand at a price equal to that then being charged foreign governments, banks, firms, or individuals for gold purchased from the United States Treasury.
(2) the Secretary of the Treasury may purchase from any citizen in the United States any gold tendered at a price equal to that then being paid to foreign governments, banks, firms, and individuals for gold being purchased by the United States Treasury.
(3) no prohibition in the Gold Reserve Act of 1934 or any other law and no prohibition in any regulation, shall be effective to prohibit or restrict the acquisition, holdings, or disposition to prohibit or restrict the acquisition, holdings, or disposition of gold by any citizen of the United States.