Hiding the Elephant: Fort Knox's Vanishing Act

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In one of Harry Houdini’s finest moments as a magician, he made a 6,000-pound, Asian elephant disappear – into thin air. Billed as the “world’s most incredible conjuring illusion”, Houdini swept onto the stage at the New York Hippodrome in 1918 and proclaimed “allow me to introduce Jennie, the world’s only vanishing elephant.”

The elephant was then escorted into a large colored cabinet. The doors were closed. The stage was set and the drum roll began. Moments later, with a flourish, Houdini flung open the doors of the box. Six thousand pounds of elephantine flesh had vanished into thin air. The crowd went wild.

In the years that followed, Houdini presented that trick to wide-eyed audiences of a million and more. Magic historian, Jim Steinmeyer, exactingly chronicled this – and other – conjuring tricks in “Hiding the Elephant”, an exposé of stage illusions.

In 1933, with America five-years deep into The Depression, the stage was set for a magic act of unprecedented proportions. History shows a wicked warlock at work.

On March 6, 1933, Executive Order (EO) 6073 was passed by Franklin Delano Roosevelt (FDR), the 32nd President of the United States in an attempt to solve the dire banking crisis. Executive orders have been around since 1789, allowing Presidents to issue legally binding orders unilaterally, without the consent of Congress. During his Presidential tenure, from 1933 to 1945, Roosevelt would issue 3,728 Executive Orders. This was his third and it was a doozy.

Just two days after Roosevelt was inaugurated as President, he proclaimed a “banking holiday”. From and including Monday, March 6, 1933 to Thursday, March 9, 1933 no bank “would pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold or silver coin or bullion or take any other action which might facilitate the hoarding thereof…” Sold to the American people as an attempt to control speculation and regulate interest rates, he closed America’s banks, thwarting customers from withdrawing their paper money holdings or converting their holdings to gold.

With a swish of his magic wand, Roosevelt mastered “complete control over America’s banking system”, expanding his Presidential powers exponentially in the process.

In his first “Fireside Speech” (which burned the backside of many Americans) on March 12, 1933 Roosevelt declared “Let me make it clear to you that the banks will take care of all needs, except, of course, the hysterical demands of hoarders, and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. It needs no prophet to tell you that when the people find that they can get their money – that they can get it when they want it for all legitimate purposes – the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress.”

On June 16, 1933, EO 6073 passed into legislation as the “Emergency Banking Act (EBA)”. After only 40 minutes’ debate in the House of Representatives, with an unknown author and no printed copies available for members of the House, the Bill was passed swiftly and without due process. The wand was waved again.

At the time, Congressman Lundeen, appalled at the reckless lack of due process involved in the passing of this Bill said “I want to put myself on record against procedure of this kind and against the use of such methods in passing legislation affecting millions of lives and billions of dollars. It seems to me that under this bill thousands of small banks will be crushed and wiped out of existence, and that money and credit control will be still further concentrated in the hands of those who now hold the power…. I am suspicious of this railroading of bills through our House of Representatives, and I refuse to vote for a measure unseen and unknown.”

Meanwhile, Executive Order 6073 paved the way for Executive Order 6102 on April 5, 1933.

This Executive Order (EO) made it a criminal act to possess gold coins, gold bullion and gold certificates within the continental United States and ordered that the hoarded gold be delivered to the Government on or before May 1, 1933. The official price of gold was raised from $20.67 to $35/ounce.

Although it is unknown just how much gold was confiscated by means of Executive Order 6102, numbers suggest that by January 1934, there were 195.1 million ounces and 227.9 million ounces by August 1934.

The Government had to have some place to hoard the confiscated gold. So, Executive Order 6102 paved the way to Fort Knox. The U.S. Treasury Department began construction of the United States Bullion Depository (USBD) in 1936. Completed in December of that year, at a cost of US$560,000, the Gold Vault sits in a 109,000-acre Army enclave in Fort Knox, Kentucky.

The U.S. Mint states that 147.3 million ounces of gold are now tucked into Fort Knox. Guarded by Apache helicopter gunships and tucked into a bunker with a bomb-proof roof and thick granite walls, you’d think that 147.3 million ounces of gold would be safe in the vault. While Treasury officials insist that the “gold is all there”, why the resistance to a public audit? Congress begs off, saying it will cost US$60 million to test the gold. Other figures bandied about suggest US$15 million. Other so-called experts contest both figures, stating that an independent audit and assay could be conducted for as little as US$15,000.

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