The U.S. Government has the authority to prohibit the private possession of
gold and silver coin and bullion by U.S. citizens during wartime, and, during
wartime and declared emergencies, to freeze their ownership of shares of mining
companies, the Treasury Department has told the Gold Anti-Trust Action Committee.
But gold and silver owners aren't alone in such jeopardy. For the U.S. Government
claims the authority in declared emergencies to seize or freeze just about everything
else that might be considered a financial instrument.
The Treasury Department's assertions came in a letter to GATA dated August
12 and written by Sean M. Thornton, chief counsel for the department's Office
of Foreign Assets Control, who replied to questions GATA posed to the department
in January. It took GATA six months and some prodding to get answers from the
Treasury, but the Treasury's reply, when it came, was remarkably comprehensive
The government's authority to interfere with the ownership of gold, silver,
and mining shares arises, Thornton wrote, from the Trading With the Enemy Act,
which became law in 1917 during World War I and applies during declared wars,
and from 1977's International Emergency Economic Powers Act, which can be applied
without declared wars.
While the Trading With the Enemy Act authorizes the government to interfere
with the ownership of gold and silver particularly, it also applies to all forms
of currency and all securities. So the Treasury official stressed in his letter
to GATA that the act could be applied not just to shares of gold and silver
mining companies but to the shares of all companies in which there is a foreign
Further, there is no requirement in the law that the targets of the government's
interference must have some connection to the declared enemies of the United
States, nor even some connection to foreign ownership. Anything that can be
construed as a financial instrument, no matter how innocently it has been used,
is subject to seizure under the Trading With the Enemy Act and the International
Emergency Economic Powers Act.
Having just gone through a controversy about a Supreme Court decision about
government's power of eminent domain, most Americans may be surprised to learn
that the Trading With the Enemy Act and the International Emergency Economic
Powers Act could expropriate them instantly and far more broadly without any
of the due process extended to parties in eminent domain cases. All that is
needed is a presidential proclamation of an emergency of some kind -- and of
course Americans lately have been living in a state of perpetual emergency.
When the Trading With the Enemy Act was passed in 1917, gold and silver formed
part of the official currency of the United States and were essential to ordinary
commerce, so perhaps an argument could be made then against "hoarding,"
even if "hoarding" could not be well defined. That is no longer the
case; the United States has officially disavowed gold and silver as money and
they no longer have a meaningful role in commerce. (GATA is working on that.)
So gold and silver investors may want to ask their members of Congress to seek
repeal of the statutes that give the government the authority to interfere with
the private ownership of gold and silver, emergencies or not.
And ordinary citizens with no particular interest in gold and silver may want
to ask their members of Congress to reconsider these statutes simply for being
GATA's correspondence with the Treasury Department is posted on the Internet here: