In contrast to what is widely assumed, the gold in Fort Knox has not mainly been supplied by gold coins in circulation in the United States before the Great Gold Confiscation by President Roosevelt in 1933.
Whilst me and Mr. Manly are researching how much gold is left in the vaults in the United States – at the Federal Reserve Bank of New York (FRBNY) and at Fort Knox – I thought it would be useful to examine historic US mining, minting, refining and gold trade data as far back as possible. Through historic USGS Mineral Yearbooks, Federal Reserve Bulletins and US Mint Annual Reports I was able to find detailed information. Additionally I used the books Currency Wars, The London Good Delivery List 1750-2010 and War On Gold for references. Our investigation starts before World War II.
The Gold Standard
United States suspends gold standard-On April 19, 1933, closely following the bank holiday, March 6-13, for the second time in its history the United States was off the gold standard. Although Great Britain, followed by many other countries, was off the gold standard in September 1931 …
To get a better understanding of the monetary era we’re investigating it’s important to understand there are many varieties of thegold standard. For example, a gold coin standard, the classic gold standard, the gold exchange standard and Bretton Woods. Without exception it’s a monetary system whereby, at least a part, of the money supply is backed by gold at a fixed price; the monetary unit is tied to a certain weight of gold. Countries participating maintain these fixed prices by being willing to buy or sell gold to anyone at that price.
What was the weight in gold of one US dollar before World War II?
The act of February 12, 1873, provided that the unit of value of the United States should be the gold dollar of the standard weight of 25.8 grains and that there should be coined besides the following gold coins: A quarter eagle (2.5-dollar piece), a 3-dollar piece, a half eagle (5-dollar piece), an eagle (IO-dollar piece), and a double eagle (20-dollar piece) all of standard weight proportional to that of the dollar piece.
In 1932 the price of gold in the US was still fixed at $20.67. In the next screen shot from the USGS Mineral Yearbook we can see the historic data of the gold price in the US since 1792 and the value denominated in the $10 gold eagle coin.
The $10 eagle coin was 90 % (900 fine) pure gold, in total it contained 258 grains of which 232.2 fine grains of gold, each fine grain had a fixed parity to the dollar at $0.04306632 ($20.67183463 per fine troy ounce).
232.2 * 0.04306632 = $10
The $10 eagle weighed in total 0.5375 troy ounce, of which 0.48375 troy ounce was fine gold.
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