Hoarding Gold Coins
Banks in North Dakota were in big trouble in the 1920s and early 1930s as the farm economy turned sour. Of 898 banks in in 1920, 573 went bankrupt by 1933, an appalling sixty-three-percent.
In those days, when a bank failed, those with savings accounts struggled to get deposits back, getting only one-fourth to one-half of their money, because there was no Federal Deposit Insurance Corporation.
Fear of banks and bankers intensified, and some North Dakotans withdrew their money, oftentimes demanding 20-dollar gold pieces instead of paper money. Those who kept the coins in teapots, mattresses, closets, attics, or in safety-deposit boxes, were denounced as ‘hoarders’ by bankers and government officials who worked to revive the economy. There had always been a class of people who mistrusted banks and had habits of burying or hiding their wealth, but treasure-hoarding became more widespread in 1930 and grew in frequency over the next three years.
On this date in 1932 Fargo hosted the 17th Annual Northwest Credit Conference, where financier E.B. Moran decried the “evils of hoarding,” launching a “stinging attack on the hoarder” who squirreled away money in fear, thus denying those funds for loans and investments. Nationally, President Herbert Hoover instigated an anti-hoarding campaign, urging citizens to put money back into the banks.
Fear overrode patriotism, helping Franklin Roosevelt win the presidency. In Roosevelt’s first presidential action, in March 1933, he declared a bank emergency, shutting down all banks for one week.
FDR ordered every American to stop hoarding, commanding citizens to bring gold coins and gold certificates to a local bank, exchanging those for paper money. Each person could keep $100 in gold, but any coins above $100 had to be surrendered. Violating this Executive Order was punishable by a $10,000 fine or 10 years in prison, or both.
In Bismarck, fear of punishment made many fearful hoarders bring their gold coins to the city’s newly-reopened banks. Most of these were five-dollar gold pieces.
However, not all hoarders gave up their coins, keeping them in secret hidden places. If you have an old house, someday you might unearth a stash of coins, carefully stacked in a jar and buried underneath your front-porch. Who knows what treasures you might find?
Dakota Datebook written by Dr. Steve Hoffbeck, MSU Moorhead History Department.
Sources: “Evils of Hoarding Described in Fargo,” Bismarck Tribune, February 22, 1932, p. 7.
“Government Issue New Rules for Gold,” Bismarck Tribune, May 1, 1933, p. 1.
Walter Lippman, “Hoarding,” Waco [TX] News Tribune, March 22, 1933, p. 4.
“Gold Still Hidden, Treasury Believes,” New York Times, February 23, 1936, p. E12.
“The New Banking Law,” Bismarck Tribune, March 15, 1933, p. 3.
“Re-Open Doors For Business Following Nine-Day Respite,” Bismarck Tribune, March 15, 1933, p. 1.
“New Gold Order Is Made By Roosevelt,” Bismarck Tribune, April 5, 1933, p. 5.
“Roosevelt Asks New Dictator Powers,” Moorhead Daily News, March 10, 1933, p. 1.
“President Hoover Declares War On Slacker Dollar,” Moorhead Daily News, February 4, 1932, p. 1.
“Hoarded Gold,” Winona Daily Republican, April 24, 1900, p. 2.
Elwyn B. Robinson, History of North Dakota (Lincoln, NE: University of Nebraska Press, 1966), p. 377.