All that glitters is not gold, however, gold glitters and for centuries gold ownership has represented wealth and prestige throughout the world.
You can’t eat gold, drive it, live in it or use it for fuel or to cruise the internet but people have mined gold, horded it, worn it as jewelry, valued it, used it to trade for goods as raw gold and as currency. Gold has also been a significant factor in toppling some civilizations and catapulting other regimes into power.
The first sign of a cultural use for gold was in the Ancient Egyptian culture where gold was found in the tombs of Egyptian royalty as ornaments and jewelry. For thousands of years B.C., gold was valued, worn as jewelry and used as household items. The first coinage of gold for currency was in Rome, starting in the third century AD. Gold coins were printed with the image of the emperor and worn as jewelry.
Ancient civilizations buried wealth with the dead for their use in the underworld and that custom provided information about how ancient people used gold. When Christianity spread throughout Europe people stopped burying riches in graves so historians were no longer able to gain information from excavating burial sites.
A number of ancient civilizations had a great deal of expertise in gold crafting, using hammering, pressing, inlay and wax casting processes. Spanish conquistadors who invaded pre-Colombian civilizations took the gold and much of it was melted, which destroyed the art used in the gold crafting. Historians have been able to recover some pieces that were buried in pre-Colombian grave sites but the majority of the gold crafting has been lost.
Gold as a currency standard was first adopted in 1821s in Great Britain and served to stabilize the currency. Europe adopted the gold standard in the 1870s and the gold support to currency held in Europe until after WWI. The U.S. was the only country that remained on the gold standard after WWI. In 1933, the then U. S. President Roosevelt issued the Gold Confiscation Act of 1933, an executive order that confiscated the gold held by U. S. citizens. It ended the gold standard for U.S. currency because it became illegal for people to hold gold with very few exceptions.
U.S. citizens were allowed to own jewelry that was valued at $100 or less, which represented significantly more value that $100 represents today. U.S. citizens could also hold gold collector coins, rare coins and gold coins and bullion that licensed for export. U.S. citizens could also hold gold bullion that was held in trust for a foreign government or bank or gold that was used for international settlements.
The Gold Confiscation Act of 1933 did not completely confiscate people’s gold, U.S. citizens were paid $20.67 ozt, for their gold and if people did not comply with the act they were fined $10,000 for violations. Many U.S. citizens moved their gold to countries like Switzerland to avoid detection.
The reason for the Gold Confiscation Act of 1933 was to pull the United States out of the Great
Depression and provide relief for the U.S. nationwide banking crisis. After the Gold Confiscation Act of 1933 the price for gold was raised to $35 ozt. The profit from the increase in the value of gold provided the funds to begin the Exchange Stabilization Fund, which was established in another gold legislation, the Gold Reserve Act in 1934.
Understanding the history of gold and learning from those lessons is a valuable perspective. Today governments like India and China are taking steps to curb the accumulation of gold to slow the rate of export of their country’s currency into gold. Politics, power and gold are constant companions throughout history and that connection will likely continue.