The U.S. Goverment's Power To Confiscate

[Ardent Listener]

Posted - 11/01/2006 : 07:39:28
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http://www.freeliberal.com/archives/002363.html

October 17, 2006
The U.S. Government's Power to Confiscate

by Fred E. Foldvary

On August 12, 2006, a letter from the United States Department of the Treasury confirmed that the U.S. government has the legal authority to confiscate gold and silver from U.S. residents and prohibit their possession during wartime. The letter to the Gold Anti-Trust Action Committee also stated that the U.S. Government may, during wartime and declared emergencies, freeze the ownership of shares of mining companies. Moreover, according to GATA, the U.S. government in such cases has the authority to seize or freeze any financial instrument.

The U.S. government's power to confiscate goes back to the Trading With the Enemy Act of 1917 (12 U.S.C. Sec. 95a) and the International Emergency Economic Powers Act of 1977 (50 U.S.C. Secs. 1701-05), the latter authorizing confiscatory powers to the government even without a declaration of war. This is a far broader power to seize than that of eminent domain.

The United States of America is currently under a state of emergency, so the U.S. government could confiscate financial property at any time. President Bush issued a Declaration of National Emergency in September 2001, which states, "A national emergency exists by reason of the terrorist attacks at the World Trade Center, New York, New York, and the Pentagon, and the continuing and immediate threat of further attacks on the United States." In September 2006, President Bush issued an executive declaration, the "Continuation of the National Emergency With Respect to Persons Who Commit, Threaten To Commit, or Support Terrorism," which extends the 2001 state of national emergency for another year.

This power to confiscate raises several Constitutional issues. First of all, the U.S. Constitution authorizes to the U.S. federal government only those powers which are specifically inscribed in the Constitution, all other powers being left to the states and the people, a principle made explicit by the 9th and 10th Amendments. The U.S. Constitution does not provide the federal government with any power to confiscate or freeze property except by taxation, punishment for a crime, and, under the 5th Amendment, for public use with just compensation.

The power to seize precious metals or financial assets during an emergency or war is not ordinary taxation, nor punishment for a crime, nor for a public use with compensation. Thus there seems to be no Constitutional authority for such a taking. There is also no Constitutional authority for a declaration of national emergency.

Moreover, it seems to me there is no good economic or military reason for the government to confiscate or freeze gold or silver or other assets. During wartime, the U.S. government can obtain all the resources it needs from ordinary taxation. Gold and silver are no longer used as U.S. currency, so there is no particular reason why trading specifically with gold or silver should be a national danger.

Such government acts stems from a war mentality that allows government almost unlimited powers during times of war or warlike circomestances. Starting with the Civil War and continuing with World Wars I and II and the Korean and Vietnam wars, the U.S. government claimed the power of conscription, to draft men into the army by force. Given this maximal government power over the lives and bodies of citizens, any other powers seem secondary. The thinking goes, if the government has the power to draft a person into the army, how could it not have the lesser power to just confiscate property?

Well, the 4th Amendment to the U.S. Constitution recognizes the "right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures," and the 13th Amendment prohibits "involuntary servitude" other than for punishment for a crime. Perhaps it is reasonable to let the government confiscate any private property, and perhaps human existence is inherently evil so simply being alive and in U.S. territory constitutes a crime that subjects us to involuntary servitude. I don't know; I just live here.

This article first appeared in the Progress Report, www.progress.org. Reprinted with permission.

Dr. Fred Foldvary teaches economics at Santa Clara University and is the author of several books: The Soul of Liberty, Public Goods and Private Communities, and the Dictionary of Free-Market Economics.

[oroborean]

Thanks for this article, AL! I particularly enjoyed the part about how confiscation is blatantly unconstitutional and the supposed justifications for it actually make no sense at all except from the point of the view that the government has absolute authority. This nation is still a long way from standing up to the government in times of emergency, from mustering anything but a primal, emotional response, really, so we'll just keep getting what we deserve.

More specifically though, this whole confiscation issue is another part of why I repeatedly say that the economic meltdown I still see some gold and silver "bugs" cheering for is totally undesirable. Rather than return us to a monetized gold or silver system, doesn't it seem more likely that these metals will simply return to government stockpiles and be used to revitalize another generation of paper? I'd much rather profit from an orderly rise in metals and miners due to managed inflation of the money supply than face some kind of financial armageddon. I certainly hope they don't need something like that to get us into the next war... or else it'll probably happen. :wink:

[cremes]

As I lurk on these forums hoping to pick up solid tips on the silver trade, I often feel a little bit strange when I read posts like the article above. This fear of government confiscation, government intrusion and government conspiracy seems to be a very common theme amongst investors in precious metals. Frankly, I find this paranoia to be silly; also, it undermines the seriousness of the investment.

The government is NOT going to confiscate your silver and gold. If they tried, I can imagine a few folks rolling over and allowing it while following it up with a (successful) lawsuit. Plus, I can guarantee that many of the 100+ million guns that we Americans own would quickly teach gov't agents how foolish such a thing would be, particularly when so many survivalist-types hoard the metals. It's downright dumb to think the gov't would start doing SWAT-style raids on people's homes to confiscate their precious metals.

I suppose I need to get used to this type of talk if I'm going to invest in silver and other metals. However, it does give me pause and it will only make me more skeptical about the claims and prognostications made my people who study this market.

Am I alone in feeling this way? Or do you now think I am hopelessly naive?

[oroborean]

I don't think you're naive, cremes. But I also wouldn't put anything past the government. We might have said a few years a go that the army didn't torture people and that America wouldn't send prisoners to Cuba indefinitely without a proper trial. But we know both of these things are, in fact, happening. Similarly, confiscation is a particular concern for a lot of people who seriously invest in metals long term because it has already happened once before!! President Roosevelt issued an Executive Order in 1933 effectively making it illegal for American citizens to own gold and ordering them to surrender their bullion to the government. The order was in place until 1974 when Gerald Ford issued his own Executive Order repealing Roosevelt's.

I would agree that times are a lot different now and there might be a lot of people who would resist confiscation, but then again we can't, in calm, rational times, predict how the masses might react in a time of national emergency. I bet they would make it sound less like they were "confiscating" your gold and more like it was the patriotic thing to do. What do you think would have happened if, right after 911, instead of "go shopping" the president had asked for donations of gold and silver to support the US dollar? It's only a small step from there to an executive order or legislation effectively making it illegal to do anything else.

I'm sure the first time gold was outlawed there were some people who held on or went abroad, and those people probably made a ton of money. But there's a big difference between being an investor and being a criminal, and I guess most people want to know what they're signing up for before they get on board. As I said above, I find this whole topic undesirable and I honestly don't spend much time at all thinking about confiscation, but it would be irresponsible not to take somewhat into consideration, because it has happened before and, who knows, could possibly happen again.

[Bill]

This is why I will only buy physical silver and keep it in a safe, in my house, that is bolted to the floor. If the government want's our silver and gold, it would be easy enough to get it from our safety deposit boxes and freeze our stocks. But to think they will go door to door with warrants and actually search homes for the stuff is just ridiculous. It would take far too much man power for a task like that. And if times get so bad that the US decides to take our gold and silver again, I'm sure they would find better use for that type of man power else where. I'm not worried.

[cremes]

I looked up the Execute Order and found it pretty quickly: Exec Order 6102 http://www.the-privateer.com/1933-gold-confiscation.html

Correct me if I'm wrong, but the US was on the gold standard back in 1933 meaning that all US currency had physical gold backing it. It's not surprising to hear Nixon rescinded the order since he was the president who took us off the gold standard.

Luckily there is no "precious metal registration" requirement. And like Bill, physical is the way to go. Therefore, the possibility of the gov't enforcing any kind of confiscation would be minimal. Even in Roosevelt's time they ordered the citizens to bring it to them; it doesn't appear any gov't agents were dispatched to wrest away gold from any citizens.

Okay, so you do have history on your side to prove that it can and has happened before. But I think that 1) the lack of a gold/silver standard for currency, 2) no historical precedent for sending out gov't agents to confiscate said metal, and 3) lack of any paper or audit trail to identify "hoarders" makes the fear somewhat unfounded. Not totally unfounded, just somewhat...

Geez, you guys may make me paranoid yet. :)

[Ardent Listener]

Paranoid posts are always good for a discussion. :wink: If my goverment ever truly needs my silver and nickel I will be happy to provide it. That is as long as it is a goverment of the people, for the people, and by the people.

[Bill]

Haha! I guess that means you'd be hanging on to your silver as well.

[cremes]

Haha! I guess that means you'd be hanging on to your silver as well.I will neither confirm nor deny that I have any silver...

:roll:

[Ardent Listener]

Haha! I guess that means you'd be hanging on to your silver as well.

:lol: :wink:

[silver_surfer]

same here im holding on all mine................

[nuslvrkwen]

FIRST the government has to know I actually HAVE bullion and coins. I buy in small amounts all the time. I also buy shot/sheet/and wire from a Jewelry supplier. I'd be selling my bullion/coins and scraps to the supplier before any government being shows up asking.

I don't own a gun, but you're right there's lots who do - they'd be just waiting for this opportunity to use it on government forces/fools.

[Trvlr45]

As I lurk on these forums hoping to pick up solid tips on the silver trade, I often feel a little bit strange when I read posts like the article above. This fear of government confiscation, government intrusion and government conspiracy seems to be a very common theme amongst investors in precious metals. Frankly, I find this paranoia to be silly; also, it undermines the seriousness of the investment.

The government is NOT going to confiscate your silver and gold. If they tried, I can imagine a few folks rolling over and allowing it while following it up with a (successful) lawsuit. Plus, I can guarantee that many of the 100+ million guns that we Americans own would quickly teach gov't agents how foolish such a thing would be, particularly when so many survivalist-types hoard the metals. It's downright dumb to think the gov't would start doing SWAT-style raids on people's homes to confiscate their precious metals.

I suppose I need to get used to this type of talk if I'm going to invest in silver and other metals. However, it does give me pause and it will only make me more skeptical about the claims and prognostications made my people who study this market.

Am I alone in feeling this way? Or do you now think I am hopelessly naive?

I think you are naive to a certain extent although I do agree with you that they won't start doing gestapo raids to confiscate silver, gold and guns.

The problem is they just perform a gestapo raid and then say it is a botched "drug raid". It happens ALL the time. They search your house, steal your guns and silver and then say yoiu have to "prove" you earned the money to buy everything or you have to prove you own what they have stolen. That is un-constitutional since the constitution states the ACCUSER has to do the proving.

It just happened a while back to a retired couple down in Texas. An intruder broke into their hoiuse, the husband shot the intruder, the police showed up, figured out the shooting was justified, then searched the house and found $400,000 in cash because the guy didn't trust banks. They had ZERO proof that this guy and his wife were EVER involved in drug dealing.

The stole his life savings and accused him of not earning it. The FBI then showed up, took the money from the locals and told him he had to "prove" he earned it. Due to the fact that they had stolen his life savings he couldn't afford to get a lawyer. I don't know what the outcome eventually was.

The reason the "war on drugs" was created when there isn't one is to take away our rights and violate our 4th and 5th ammendment rights. Get caught driving down the road with $5000 in cash in your car and see what happens.

There is no "war on drugs", there is no "global warming" or "man-made climate change". What there is, is a government who uses the hegelian dialect to take away our civil rights.

They have a whole plethora of "reasons" to come and steal what you have anytime they want. I heard a report about 6 months ago about 50 gestapo raids classified as "bothched drug raids" but tuned in late and didn't catch where it happened. I think it was down in Florida because it was a Cuban who was being interviewed in the story I heard about.

Look at what the IRS does. No due process, no 4th ammendment rights, no 5th ammendment rights and they violate the 13th ammendment. Employees don't have an "income". They are compensated for their "labor" and the constitution gaurantees our right to the fruits of OUR labor. Income is derived from PROFIT, not labor.

They are already stealing whatever they want and they do it on a regular basis. Everything our government does is based on reducing our freedom and controlling our every move from what we say and think to what kind of car and lightbulb we can use.

And it is going to get MUCH worse. Most people who are buying silver and gold are doing so because they know what is coming fown the pike. All you need is a MINIMAL knowledge of past history they don't teach in the schools and you can see it coming. It amazes me how many don't see it when it is right in front of them. It's like looking up at the sky and saying you don't see it.

However, you are not the first to point out that there is too much "conspiracy" type talk on this forum and you are probably right. But for the most part, the most active threads are those that deal with our corrupt government and what they are doing to our economy and what criminal activity they may engage in down the road.

It IS, after all a silver forum but there are many reasons for WHY such a diverse group of people are buying silver.

[averagejoe]

Very well put Traveler!!

[ricm123]

Earlier post(s) said NWTM is turning out 40,000 oz of silver a day. I'm sure they keep electronic records of sales, as do all major PM suppliers.

If Big Bro wants to know who has acquired large quantities of PM's, they know right where to look.

As a small fry buyer, I'm not worried.

Gold was not exactly "confiscated". My grandparents took their gold coins to the bank and exchanged/redeemed them for paper bills of equal face value. (I think there was a certain redemption date announced so everyone had time to gather up their gold coins.) After the redemption date, stores no longer accepted gold coins, so most folks redeemed the gold so they wouldn't end up with "worthless" coins and also be in some violation of the law. Seems hilarious to us now, but a twenty dollar coin/bill would buy many meals back then.

My grandmother knew a few folks that held back a few coins for 'keepsake'. She never knew or heard of anyone being searched or arrested for failure to redeem all their gold coins. Some folks had jewelers melt the coins and make necklaces, bracelets, ashtrays, etc to circumvent the possession laws.

If only I had a time machine....

[One_of_Many]

I suppose I need to get used to this type of talk if I'm going to invest in silver and other metals. However, it does give me pause and it will only make me more skeptical about the claims and prognostications made my people who study this market.

Am I alone in feeling this way? Or do you now think I am hopelessly naive?

Naive, no. You just have one foot on the ground. But hop now and then. It can't hurt to be a little paranoid and it might just save your ass someday.

I don't believe the gov will ever try to confiscate pm's. As pointed out, its too impractical and there is too much lead in the way. They would simply declair a date by which we must all turn in our pm's and we would be paids a few FRN's for our trouble. After the turn in date pm's would have the same legal status as cocaine. Illeagle to posess and distibute.

[My Pants Are Cold]

It just happened a while back to a retired couple down in Texas. An intruder broke into their hoiuse, the husband shot the intruder, the police showed up, figured out the shooting was justified, then searched the house and found $400,000 in cash because the guy didn't trust banks. They had ZERO proof that this guy and his wife were EVER involved in drug dealing.

The stole his life savings and accused him of not earning it. The FBI then showed up, took the money from the locals and told him he had to "prove" he earned it. Due to the fact that they had stolen his life savings he couldn't afford to get a lawyer. I don't know what the outcome eventually was.

Do you have a link to this story? I've heard it before, but honestly, is sounds like "urban legend" to me. I'd like to read it for my self from a reputable source.

[Trvlr45]

Do you have a link to this story? I've heard it before, but honestly, is sounds like "urban legend" to me. I'd like to read it for my self from a reputable source.

I sure wish I did. I heard it reported on the Rollye James show on XM quite a while back. I turned on the show about half way through her reading excerpts from the story.

It is VERY possible it was a World Net Daily story since they are one of the few news organizations that reports on the type of stories the government doesn't want you to hear about. WND is the biggest news organization on the net and one of the most reputable.

I never looked it up because the people in this country only believe what they want to believe. Even if you showed them the story most would just say it was made up because they didn't see it on CNN, ABC or FOX.

I'll look around and see if I can find something on it. The reason I believe it is because I have heard stories similar to this off and on for years now.

[Trvlr45]

Do you have a link to this story? I've heard it before, but honestly, is sounds like "urban legend" to me. I'd like to read it for my self from a reputable source.

Here's a link to the CATO Institute. 103 pages in PDF discussing the subject of home invasions by police.

http://www.cato.org/pubs/wtpapers/balko_whitepaper_2006.pdf

Here's a link to the Cato Institutes "Botched Drug Raid Map"

http://www.cato.org/raidmap/

Here's a link to the story on the $400,000. You see if you can figure out who to believe. You just never know these days. Far be it from me to side with criminals but with what I KNOW our government is doing because I see it every day I'm starting to believe the "criminals" more and more. LOL

http://abcnews.go.com/TheLaw/FedCrimes/Story?id=4656671&page=1

[My Pants Are Cold]

Here's a link to the story on the $400,000. You see if you can figure out who to believe. You just never know these days. Far be it from me to side with criminals but with what I KNOW our government is doing because I see it every day I'm starting to believe the "criminals" more and more. LOL

A coin toss for sure. Nearly a pound of weed seems a bit much for personal consumption, but who am I to say. You'd think the ACLU would be all over this if the accused were "innocent". So, who knows.

[Trvlr45]

It is a toss up but they haven't charged them with anything which means they have no proof. Therefore, they shouldn't have his money. Besides, the government does more drug smuggling than anyone.

Look at what Bush did to our border patrol agents for shooting an illegal alien drug dealer and look at all his drug dealer pardons. Look at Bill Clinton and his past.

They have to have proof. Period.

[clr8ter]

Well, yeah, assuming there WAS a pound of weed in there, what did they think was going to happen? Everyone knows that when there is drugs involved, the govt. usually goes overboard. If I had 400 Large, or drugs, I would have hidden it better. And, if I had just shot someone, I would get rid of the weed ASAP. Everyone has a toilet.......

[clr8ter]

Isn't being found in possetion of weed proof that you have broken the law by the fact that you have it? And, isn't having more than a certain ammount considered to mean you're distributing?

[hiyosilver]

I would get rid of the weed ASAP. Everyone has a toilet.......


Most potheads think they're thinkers, but they just think so................(cough cough)........................here....

[Trvlr45]

Isn't being found in possetion of weed proof that you have broken the law by the fact that you have it? And, isn't having more than a certain ammount considered to mean you're distributing?

Yes, a certain amount does mean you are distibuting but how does anyone know there was a pound in there. The cops could have planted that to set him up. It happens. Furthermore, why has he not been charged? So far.

Asset forfieture without proof of a crime is illegal in this country. But they do it ALL the time. This guy could very well be a drug dealer but they have to prove it.

Some dirt bags may get off but I would rather have a few escape through the cracks than deal with what we are dealing with now where ANYONE can be hauled off for ANYTHING and your property can be stolen for ANYTHING.

Just look at the IRS.

[clr8ter]

That's all true. I'm not defending the govt. I don't trust them one bit, and I have heard of all the things they have done that they're not supposed to be able to do. I'm just saying, if the guy did have the weed........

[Trvlr45]

The reason I KNOW our government deals drugs is because of a case a lawyer told me about years ago.

He had a client who got caught red-handed with $20,000 cash in his house and around 20 lbs of speed.

His client was never indicted. After a couple of weeks he calls a friend of his at the FBI to see if he can find anything out for him.

His friend at the FBI almost falls off his chair laughing and tells him not to worry about it. He says the cash was probably divided up between the arresting officers and the speed had already been sold back onto the street.
His client was never indicted and that lawyer never heard a peep about the case ever again.

In another example out in California where I lived years ago I knew "someone" who always hung around with the dregs of society. He had a friend of his that was a former vice cop who was shot in a robbery attempt. He was now in a wheel chair and pals with a huge cocaine smuggler. They smuggled it into Nor Cal in cow intestines. He goes over there for a visit and see's a couple bricks of pure coke sitting on the floor. The former cop just tells him he's "watching" it for his buddy.

The same "someone" I knew worked at a staffing agency and the woman who ran it was married to a california politician in the Sacramento area. He gets invited to a party becaue his boss was trying to get into his pants and low and behold, there are some of the people he KNEW were in the drug biz having a grand old time with the local legislature.

This was about 20 years ago. I'm sure it is much worse now. And to think we all have to WORK for a living to pay these assholes.

[My Pants Are Cold]

The reason I KNOW our government deals drugs is because of a case a lawyer told me about years ago.

He had a client who got caught red-handed with $20,000 cash in his house and around 20 lbs of speed.

His client was never indicted. After a couple of weeks he calls a friend of his at the FBI to see if he can find anything out for him.

His friend at the FBI almost falls off his chair laughing and tells him not to worry about it. He says the cash was probably divided up between the arresting officers and the speed had already been sold back onto the street.
His client was never indicted and that lawyer never heard a peep about the case ever again.

In another example out in California where I lived years ago I knew "someone" who always hung around with the dregs of society. He had a friend of his that was a former vice cop who was shot in a robbery attempt. He was now in a wheel chair and pals with a huge cocaine smuggler. They smuggled it into Nor Cal in cow intestines. He goes over there for a visit and see's a couple bricks of pure coke sitting on the floor. The former cop just tells him he's "watching" it for his buddy.

The same "someone" I knew worked at a staffing agency and the woman who ran it was married to a california politician in the Sacramento area. He gets invited to a party becaue his boss was trying to get into his pants and low and behold, there are some of the people he KNEW were in the drug biz having a grand old time with the local legislature.

This was about 20 years ago. I'm sure it is much worse now. And to think we all have to WORK for a living to pay these assholes.

I've always considered legalization and taxation was a better way to regulate drugs.

[cugir321]

Who's the idiot with 400k in his mattress.....oh shoot, a seam split on mine. I'll get back to you....gotta go do some sewing.Do you have a link to this story? I've heard it before, but honestly, is sounds like "urban legend" to me. I'd like to read it for my self from a reputable source.

[Trvlr45]

I've always considered legalization and taxation was a better way to regulate drugs.

That's true but regulating them that way would take all the profit out of the equation. How would the government get the money to fund black projects congress won't fund if there was no drug trade.

I think our own government is running the global drug trade. Just my opinion but why is the poppy harvest in Afghanistan now so much larger now that OUR military is over there?

Our currency is backed by oil which is why we have the big lie about global warming and a phony oil shortage. If they produce more oil our dollar collapses. They launder drug money through Wallstreet.

There are a lot of reasons to not have a silver or gold backed currency and they are all in favor of everyone but us. It's corruption form every angle. They don't want anything regulated out in the open with transparency for all to see.