Protecting Us From A 'Terrorist' Who Made Pure Silver Coins: The Bernard von NotHaus Case

Our Constitution sets forth –- and limits — the government’s powers. Under Article I, Section 8, Congress is authorized to “coin money and regulate the value thereof” and also to “provide for the punishment of counterfeiting of the securities and current coin of the United States.”

Notice that no power is given for Congress to confer upon the government a monopoly in the creation of money. That matters because, prior to the drafting and ratification of the Constitution, private coinage was known and accepted, as we learn in this instructive Freeman article, “Private Coinage in America” by Brian Summers.

If the Founders had thought there was something wrong in allowing money to circulate besides that produced by the federal government, they would have granted Congress power to forbid that. They did not. As with almost every aspect of life, the people were to be left free to manage their affairs, including the freedom to produce money and accept whatever medium of exchange they desired. Only counterfeiting – that is, producing fake money or securities intended to deceive recipients – was to be illegal.

This history is pertinent to another of those increasingly frequent instances where the government has gone after a peaceful citizen on legally dubious grounds. The case involves Bernard von NotHaus, a man who produced and sold pure silver coins he called “Liberty Dollars.” He was arrested in 2009 and charged with violating federal criminal law, specifically 18 U.S. Code Sec. 486, which prohibits making coins “intended for use as current money.” The prosecution’s argument was that this statute gives the federal government the exclusive power to produce currency.

One more thing – the government also seized around $7 million worth of gold, silver, and other property from Mr. von NotHaus.

The jury thus had virtually no choice but to find the defendant guilty.

On Sunday, November 17, 1734 [Peter] Zenger was arrested and charged with seditious libel. After more than eight months in prison, Zenger went to trial defended by illustrious Philadelphia lawyer Andrew Hamilton. The case was now a cause celebre with public interest at fever-pitch. Rebuffed repeatedly by Chief Justice Delancey during the trial, Hamilton decided to plead his client's case directly to the jury. After the arguments for both sides were finished, the jury was retired, only to return shortly with a verdict of not guilty. Peter Zinger and Freedom of the Press
”Virtually” no choice is not no choice.

A direct threat to the federal government? Any opinions from those who were alive under Roosevelt?

From the wiki:

Rationale
The stated reason for the order was that hard times had caused “hoarding” of gold, stalling economic growth and making the depression worse.[1] The New York Times, on April 6, 1933 p. 16, wrote under the headline “Hoarding of Gold”, “The Executive Order issued by the President yesterday amplifies and particularizes his earlier warnings against hoarding. On March 6, taking advantage of a wartime statute that had not been repealed, he issued Presidential Proclamation 2039 that forbade the hoarding ‘of gold or silver coin or bullion or currency,’ under penalty of $10,000 and/or up to five to ten years imprisonment.”[2]

The main rationale behind the order was to remove the constraint on the Federal Reserve which prevented it from increasing the money supply during the depression; the Federal Reserve Act required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit (in the form of Federal Reserve demand notes) that could be backed by the gold in its possession (see Great Depression). If gold can’t be legally owned, then it can’t be legally redeemed. If it can’t be legally redeemed, then it can’t constrain the central bank.[3]

...

In 1934, Congress passed the Gold Reserve Act of 1934 which ratified President Roosevelt's orders. A new set of Treasury regulations was issued providing civil penalties of confiscation of all gold and imposition of fines equal to double the value of the gold seized. Louis Ruffino was one individual who was indicted on three counts purporting to charge violations of the Trading With The Enemy Act. Eventually, Ruffino appealed[15] the conviction to the Circuit Court of Appeals 9th District in 1940; however, the judgment of the lower courts was upheld based on the President’s executive orders and the Gold Reserve Act of 1934. Ruffino, a resident of Sutter Creek in California-gold country, was convicted of possessing 78 ounces of gold and was sentenced to 6 months in jail, paid a $500 fine, and had his gold seized.[16]

Foreigners also had gold confiscated, and were forced to accept paper money for their gold. The Uebersee Finanz-Korporation, a Swiss banking company, had $1,250,000 in gold coins for business use. The Uebersee Finanz-Korporation entrusted the gold to an American firm for safekeeping. The Swiss were shocked to find that their gold was confiscated. The Swiss made appeals, but those appeals were denied. The Swiss were entitled to paper money – but not their gold. Of course, after the gold was seized, there was a 1934 overnight increase of the price of gold from $20.67 per ounce to $35 per ounce. The Swiss company lost 40% of their gold's value.[17]

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