Confiscation: Gold as Contraband

Confiscation: Gold as Contraband 1933-1974 by Kenneth R. Ferguson was a pleasure to read. Ferguson writes well. I met Ken Ferguson in person at a coin show here in Austin. He speaks as intelligently as he writes. Our time together was enlightening. 

Few people ever get past citing Executive Order 6102. Even when they do point to that document, they most often stop short of fully citing and discussing it. This book delivers the facts. Ferguson tells the whole story, going past 6102 to the subsequent orders and laws. He lays out carefully and logically the many relevant details that highlight this singular event. He also examines the public response. I was impressed with his explanations of how and why Britain, France, and Switzerland returned to striking gold coins after World War II, using dies from previous years. 

This book carefully explains the intentions and consequences of the rolling orders and laws that redefined the monetary policy of the American government in the 1930s. On the first level, obviously, the goal was to get gold into the U.S. Treasury in order to meet foreign obligations. Moreover, the revaluation of the dollar did more than expand the money supply, though it did that. When the official price of gold moved from $20.67 per ounce to $35 per ounce, all of the paper profits went to the Treasury. Citizens who turned gold in were paid at the face value of the coins (or the equivalent for bullion), $20 for a $20 double eagle, not $33.86. 

As for whether surrendering gold was necessary, Ferguson demonstrates from several perspectives why it was not. Other nations made similar changes – demonetizing gold, going off the gold standard – without confiscating the private property of their citizens. That is a theme that Ferguson returns to often as he dissects the events and laws. If gold is money, then Congress (not the President) is authorized to define how much goes into what coins. That happened in 1834, for example. If gold is private property, then its uses as money are irrelevant in that context. Moreover, and most insightful (and damning) Ferguson shows that (1) Treasury stocks were not greatly improved by this law (though the Treasury did profit directly), and (2) the reason why is that half the gold in private holdings in the United States remained with its owners. People just ignored the law, as they had Prohibition earlier.

In 180 pages, this book provides a close and yet conversational examination of Franklin D. Roosevelt’s executive orders and the related Congressional acts that became laws. Ferguson identifies and explains the half dozen presidential orders and parallel banking acts, the criminalization of gold ownership, and the exclusions left open to numismatists. Turning to the international theater, the presentation builds on the official purposes of the Bretton Woods accords to illuminate the history of the 1950s and 1960s.  It was that context which provided the impetus for President Gerald Ford to lift all of those restrictions in 1974. 

From there, Ferguson considers the modern world, whether and to what extent gold is money, whether and to what extent it is an investment, and the prospects for a repeat of the draconian laws of the 1930s. That last is too often a springboard for ideologues who sell gold coins to harry the public into buying them. As a professional dealer in numismatic rarities, Ferguson shows more aplomb. 

Ferguson earned his master’s degree from the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. Since then, he was worked as a coin dealer. Those two facts explain why this book rests on careful research. His bibliography of 35 sources includes works by both John Kenneth Galbraith and Milton Friedman as well as authorities such as Q. David Bowers, John Craig, and Hans Schlumberger who are recognized within the numismatic community.

The weekend before, I attended a three-day seminar for authors on self-publishing. It was well worth the money. This book was published by the author and Ferguson did it right. The book is set in 11-point Garamond, which the user experience designers here in Austin assure me is the new standard in Roman (serif) fonts.  Of course, it is perfect bound. Ferguson told me that he turned for help to a professional editor. From the seminar I attended the weekend before, I learned how much he paid for the ISBN. It makes a difference in the professional presentation of any work that claims authority. Confiscation: Gold as Contraband 1933-1974 by Kenneth R. Ferguson adheres to that standard.

PREVIOUSLY ON NECESSARY FACTS

Objectivism and the Gold Standard 

Gresham’s Conjecture 

Electrum Sixths and the Treaty of Mytilene 

Numismatics: the Standard of Proof in Economics 

Soldiers of Peace

The military teaches the way of peace, said Paul K. Chappell, because they praise in public and reprimand in private. I heard Paul K. Chappell interviewed on an KERA’s “Think” with Krys Boyd, on March 20, 2018. A West Point graduate, Chappell left the Army as a captain and now works for the Nuclear Age Peace Foundation. I bought two copies of his book, Soldiers of Peace, and gave one to the director of our state guard officer candidate school. I finished reading it this morning. Overall, it was easy to find much to disagree with but Chappell argues well for finding other solutions to our social problems.

Chappell repeats his claims, which begin (easily enough) with the observation that 200 years ago, slavery was accepted and women could neither vote nor own property. But here we are today. So, what about us now will seem short-sighted to people 200 years in the future? Chappell calls his program “peace literacy.” It is a path, a way of life, not a formula or a checklist. Peace literacy includes empathetic listening, respect, integrity, and selfless service. Peace literacy depends on knowing how to calm yourself so that you can calm others. All of this takes discipline.

Soldiers of Peace: How to Wield the Weapon 

of Nonviolence with Maximum Force 

by Paul K. Chappell, 

Prospecta Press, 2017; 272 pages; $16.  

Chappell denies moral relativism and epistemological subjectivism. He says that the truth exists and we can know it. He warns against romanticizing the past, and even against romanticizing nonviolence. He calls himself a realist, and differentiates that from the common “realism” that is only cynicism. It is not surprising that he repeatedly cites Socrates, Lao-tze, Gandhi, and King. I did find it curious that he echoed Ayn Rand (though Rand is not cited anywhere). Rand found the basis for morality in our mortality. She posited an indestructible robot and explained that it could have no values. Chappell makes exactly the same argument. Like Rand, Chappell points out that humans have no instinctive, automatic modes of survival. Oak trees and caterpillars, he says, have no need for mentors. We do. And he provides many. Among them are Gen. Douglas MacArthur, the heroes of the Iliad, and Lt. Gen. John Schofield, the superintendent of West Point.

I never learned anywhere else that one impetus for Rosa Parks to resist segregation on the city bus line was her experience with the integrated transports at Maxwell Air Force Base where she and her husband both worked. In fact, Chappell says (at least twice) that his mother yelled at him when he announced that he was leaving the military because nowhere else in her world could a mixed race (African-American/Asian) person be treated fairly.

Chappell also speaks well of the discipline of martial arts that teaches respect for one’s opponent as the path to avoiding conflict in the first place. Contrasting that, he notes that during World War I, in the mad charges from the trenches, cruel officers were sometimes shot in the back. In the military, everyone is armed and trained to kill, so the social formalities reinforce respect.

It is salient that the military succeeds by training. Chappell cites Julius Caesar who recorded that the Gauls, Celts, and Germans made fun of the small stature of the Romans—until the battle was engaged. And in the military, failures in the field are traced back to failures of training. Learning the literacy of peace requires deep and extensive training, of course. And Chappell and the Nuclear Age Peace Foundation provide such classes (here) though he says nothing about them in this book. (His own website is here.)

Toward the close, Chappell says that the best use of the military would be for humanitarian aid and disaster relief. As killing the enemy still has not worked out very well, that seems hard to argue with.

Easier to take exception to are the very many glittering generalities, glib statements, easy oversights, and incomplete examinations that litter the book as Chappell wanders over the landscape of his personal life.

Just to take one point, the author asserts that women in ancient Athens were oppressed. It is the liberal, enlightened view. Women could not vote. They could not own property. Indeed, they were property. But so was everyone else. It is famous that the philosopher Diogenes was one of the very many who were captured on some voyage or on some road and were sold into slavery. Outside of your city, you had no protection. Even within the city, rights as we know them did not exist. Socrates is the most famous case in point, but not unique. On the other hand, Chappell at length cites Greek myths and Athenian dramas in which women were the driving force, the wise speaker, the effective agent. The god of war, Ares, was less powerful than Athena, the goddess of wisdom (and strategy). Beginning with the assumption that he seeks to prove, Chappell cannot reconcile that against the civil status of women.

A dozen other problems run through the book, repeated and restated, cast as assertions and reused as proofs.

In balance, Soldiers of Peace provides cogent reasons to re-examine our assumptions about war and peace. Chappell’s thesis includes the minor premise that nonviolence is not peace. Pacifism will not end war. Rage is an expression of pain, not of strength. Perhaps the most arguable and yet insightful assertion is that the threats to peace include disparities in wealth, rapid population growth in the cities, and climate change. Those threats were identified by the U.S. Army Sustainability Report (2009). “When the U.S. Army and the Occupy movement agree on something, I think we should pay attention.” 

PREVIOUSLY ON NECESSARY FACTS

Peace is More Powerful 

Armies Without Weapons

Shifting the Paradigm of Private Security 

Do You Know Your Military? 

Aaron Feldman:"Buy the Book Before You Buy the Coin"

BUY THE BOOK BEFORE THE COIN headlined an advertisement in the March 1966 issue of The Numismatist. Aaron R. Feldman offered 25 titles, some of which were classics then as now: Sheldon, Beistle, and Bolender. Don Taxay’s book on counterfeits (1964) was a new addition to our knowledge base. The Friedberg family was still in its first generation with Paper Money of the United States. 

(An earlier version of this article originally appeared in the Winter 2008 issue of the MSNS Mich-Matist and is archived at www.CoinTalk.com, here. )

Today, the self-styled "bibliomaniacs" of numismatics easily recognize Aaron R. Feldman (1894-1976) as an iconic literature dealer. He said, “I’ve always thought that if a man doesn’t own one coin, but has the knowledge that is in the books, then he’s a real numismatist.” However, Feldman himself owned many coins.

After returning from World War I with a mustard gas injury, he worked in his uncle’s millinery business. As an astute businessman, his serious collecting began during the 1930s. Like most, he began with standard U.S. issues but soon discovered the untapped markets in Civil War Tokens, Hard Times Tokens, and Presidential Inaugural Medals. He bought whole collections and became known to the dealers. Feldman then moved into paper money, assembling an admirable inventory of U.S. Large Size notes under the tutelage of George Herbert Blake (1858-1955) who was called “the dean of American paper money.” 

The depth of Feldman’s interest can be gauged by the fact that he wrote an article for Coin World (Dec. 22, 1961), “Irish Revolutionists Issue Freedom Bonds.” The sidebar called him an “avid paper student.” Whatever his other interests, this is the only article attributed directly to Feldman. His influence was personal.

He lugged his books to ANA conventions. He entertained customers at “the world’s smallest coin shop” amid the diamond merchants at 1220 Avenue of the Americas (which natives always have called “Sixth Avenue”). 

Q. David Bowers has fond memories of the little store. “He had a small cubicle in the NY Diamond Exchange just off 5th Avenue, where he went during weekdays. It probably measured no more than 8 feet square, with diamond dealers and jewelers all around him. I knew him well and visited many times.” 

In 1991, the Numismatic Bibliomania Society raised $3,000 for an endowment for the ANA convention exhibit awards. 

 Aaron Feldman was a member of the ANA, the ANS, the Empire State Numismatic Association and many other coin clubs over the years. Successful in business, Feldman could afford to indulge his passions. He was known to sell books at cost to beginning collectors.

Feldman endured Parkinson’s disease in his declining years. He closed his shop and did business by mail. When it came time to sell off his literature collection to meet his medical expenses, he was caught by bad timing.

His own favorite literature dealer was Frank Katen (1903-2001) who has been called “the pathfinder of American Numismatic Bibliomania” and the “Moses” of numismatic literature. Unfortunately, Katen could not handle Feldman’s collection immediately. So, impatient because of his failing health, Feldman consigned his library to Swann Galleries, another specialist in books. But Feldman was not impressed with Swann’s appreciation of numismatics as a specialty. Like many coin dealers, their auctions had, in fact, treated coin books as “throwaways." Nonetheless, George S. Lowry, president of Swann’s was happy with the results: the sale grossed $13,000 (November 29, 1973), which, relative to the price of gold or gasoline today would be like a quarter of a million dollars. However, for Feldman, it was a disaster.

 

Boxes of 19th century auction catalogues, back issues of ANS and ANA publications, cartons of catalogs and ephemera from Wayte Raymond, James Kelly, Morton and Jospeh Stack, and Max Mehl all went for fractions of the pre-sale estimates. The two-volume Saxonia Numismatica by Wilhelm Ernst Tentzel, written in German and Latin and published in 1708, sold for $275. Writing this in February 2008, I found the same books for sale from a German dealer for €350 (about $510-$520). Compared to gold and gasoline, these books remain greatly undervalued.

Literature is a tough sell. Coins are shiny; gold and silver are hard money. When you hold a 20¢ piece you can imagine what it bought in 1875. But if coins are “history you can hold in your hand” then without the history, all you have is a melted rock. The imagery, the iconography, the devices and legends, all lose meaning.

Collectors come to the bourse floor armed with price guides, Greysheets, Red Books, or armed with phones and tablets connected to the Internet. They want the best prices – and rightfully so. It is an immutable law of economics that price is a matter of supply and demand. With old coins, the supplies are more or less fixed. All that changes is the demand. Demand begins with literature. One collector writes an article for a magazine. Another collector creates an exhibit. Someone else gives a talk at an ANA convention. Eventually a book comes out. At every step, from original research, to the sharing of information, to the reading of good books, each aficionado enjoys profits not available to later buyers and sellers. The people with the price sheets are the last in line. They pay for the profits not realized in the sales of rare books.

It is perhaps unfair that collectible books are not prized more highly. The advantage is that almost any book at almost any price is a bargain. You cannot buy them much cheaper. The profits come from knowing what is between the covers. 

Sources

• Bowers, Dave, email to author, Wednesday, December 26, 2007 11:13 pm
• Feldman, Aaron, “Irish Revolutionists Issue Freedom Bonds,” Coin World, December 22, 1961, page 56.
• “Frank Katen, 1903-2001” The E-Sylum: Volume 4, Number 5, January 28, 2001, Article 2. http://www.coinbooks.org/esylum_v04n05a02.html
• Smith, Pete, “Names in Numismatics: Feldman Promoted Numismatic Literature,” The Numismatist, December 1998, page 1373.
• “Aaron Feldman dead at 81; famous for book advocacy,” Coin World, April 7, 1976, pg. 3. 
• Hamburger Antiquariat Keip GmbH, Grindelhof 48, 20146 Hamburg, Germany http://www.antiqbook.de/boox/ham/266999.shtml   
• "Aaron Feldman: Buy the Book Before You Buy the Coin," https://www.cointalk.com/threads/aaron-feldman-buy-the-book-before-you-buy-the-coin.129198/)

PREVIOUSLY ON NECESSARY FACTS

Numismatics: History as Market

Numismatic Truthseekers

Forgery and Fraud in Numismatics

For the Glory of Old Lincoln High

Numismatics: The Standard of Proof in Economics

Money as Living History

A Few Good Men: A Few Deep Flaws

Nominated for both an Academy of Motion Picture Arts and Sciences award ("Oscar") and a Hollywood Foreign Press Association (“Golden Globe”) award, the drama is compelling. The movie began as a Broadway play. Live theater is continuous rehearsal for the writer and director no less than for the cast. So, it came to the screen fully formed. But it does not stand up to repeated viewing. As a legal battle engaged in a courtroom, the intensity is irresistible. Contradicting that is the “naturalist” assumption that victory is impossible, that a draw is the best you can hope for.

Most of the $33 million in production costs went for salaries.  Tom Cruise got $12.5 million. Jack Nicholson was paid $5 million. Demi Moore accepted only $2 million for the chance to take on a “genderless” role. (One production insider wanted to know why if she is not going to sleep with the lead is the character a woman? Aaron Sorkin called that his worst experience as a screenwriter. That and more on Mental Floss here.) But any competent screen actors could have had the roles. In fact, Rob Lowe played the lead for a year on Broadway. Regardless of who played the parts, they would still have had to act like Sailors and Marines. Most of them failed at that and the fault lies with the director and producer, Rob Reiner.

Writer Aaron Sorkin and director Rob Reiner have no military experience and they apparently had no military support. So, the production projected an embarrassing lack of military bearing. Lacking US DoD support, Reiner apparently did not hire a military advisor. (Michael McClosky is credited as “Major Michael McClosky” but I found no corroboration for his military rank.) The most glaring evidence is in Demi Moore’s portrayal of LCDR JoAnne Galloway. We might accept LTJG Daniel Kaffee (played by Tom Cruise) whose hands are always his pockets in order to signal us that he is the cocky underachiever whose long string of successes came from plea bargaining. But there is no way that an investigator from the inspector general’ s office who is two grades above him would put up with that. Here is a rhetorical question: What do you do when you have your hands in your pockets? Answer: You better be taking something out of your pockets. It is completely unacceptable that LTJG Kaffee is eating an apple as he enters LCDR Galloway’s office. He might try it, but an IG investigator outranking him would give him a corrective interview immediately. Also unacceptable is her introducing herself as “JoAnne…, uh, Jo…”  On target is the reply from 1LT (MC) Jonathan Kendrick: “May I call you Jonathan?” “No, you may not. You may call me Lieutenant Kendrick because when we have to go somewhere to fight, you Navy boys always provide a nice ride.” That is a stock response, a cliché, and a fact of life. On the other hand, it was for the audience’s benefit that COL Jessep reprimands his executive officer, LTC Matthew Markinson. “Don’t ever contradict me in front of another officer,” is the kind of warning that (a) never would have needed to be said or (b) at worst, was settled between them three years ago.

Within the naturalist school of aesthetics, the universe is indifferent to human action. Technically, that is correct; and it is that which allows success. The universe is not hostile. However, aesthetic naturalism is disingenuous. The inherent indifference of the universe actually means that each victory must be balanced by an equal or greater loss: you can never win. It is not just that there is a cost. Of course, everything costs. But to naturalism the final costs always outweigh the temporary benefits. Therefore, in this story, the accused Marines are found not guilty of murder, but are dishonorably discharged. The slower of the two (LCP Harold Dawson) still does not understand the verdict as they are led away. In the final moment, as recompense, LTJG Kaffee tells PFC Downey that he does not need an armband (his chevrons) to have honor. In return, the Private calls himself to attention and salutes the officer—which he refused to do earlier when he felt that the Lieutenant was not honorable enough to defend him. But for the Private, the dishonorable discharge is the worst possible outcome at the moment. He and the Lance Corporal were willing to suffer life in prison rather than to betray the officers who ordered them to haze (and thereby accidentally kill) their barracks mate. They were willing to accept all of the consequence of following orders. The betrayals by those officers who gave the orders and sought to cover up the murder and their roles in it is not deeply explored but only held up to view for a moment. LTC Markinson’s suicide, hallmarked by a letter to the parents of the victim, would have been a better focal point for the drama. In the universe of aesthetic naturalism, no person or act is more important than another. Naturalism denies the heroic by trivializing it, and at the same time giving focus to the unimportant.

According to the media histories Aaron Sorkin based his screenplay on a real event at Naval Station Guantanamo Bay. Sorkin’s sister was in the JAG Corps, and she told him the story. After the play became a movie, four lawyers claimed that they were the models for the character of LTJG Daniel Kaffee.  (See “Four Lawyers Claimed …” New York Times, here.) See also the true story of the accused and exonerated Marine that came to light when his body was found in a riverbed (“Ex-Marine who felt 'A Few Good Men' maligned him is mysteriously murdered,” by Bill Glauber, Sun Staff Writer, Baltimore Sun, April 10, 1994, here).

Naturalism is supposedly an unvarnished, journalistic recounting. Fiction is a convenient medium for telling the truth. But that is not what happens. The truth is always complicated, and how you simplify it depends on who you are. The Romantic theory is that people come into conflict when their chosen values are opposed. Even the bad guys are purposeful. But evil is powerless. Therefore, the good guys win, even when (as always) victory is purchased at a cost. In the universe of Romantic fiction, that cost brings a value worth the price. In the universe of Naturalism, even if there are "a few good men" it is not clear who they are.

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More on The Forever War 

JAG: 10 Seasons of Military Bearing 

Firefly: Fact and Value Aboard Serenity 

Plenty of Time When We Get Home 

JAG: 10 Seasons of Military Bearing

Last week, Laurel and I viewed the final episode of the final season of the television series JAG. It took us about a year to work through the set. Laurel is a voracious reader, primarily of murder mysteries and computer documentation. As a writer and reader of non-fiction, I am informed by Ayn Rand’s theory of aesthetics expressed in The Romantic Manifesto. For being television, written, shot, and edited on a grinding production schedule by a large, changing staff of writers and directors, with the attendant holes in plot, character development, and theme, JAG held up well.

Ayn Rand based her theory of art on Aristotle’s maxim that fiction portrays people as they can and should be. Every work of art is “a selective recreation of reality according to an artist’s metaphysical value judgments.” (The Romantic Manifesto, Signet 1971, p. 19) An artist cannot present all of reality, so some aspect of it stands for the whole. Is the world hospitable or hostile or indifferent? Rand called this one's "sense of life."

Complicated pasts leave them internally
conflicted. Their moral lodestars are on
the far horizon. They eventually find home port.

“Art is a concretization of metaphysics. Art brings man’s concepts into the perceptual level of his consciousness and allows him to grasp them directly as if they were percepts.” (RM p. 20) 

"Since man lives by reshaping his physical background to serve his purpose, since he must first define and then create his values--a rational man needs a concretized projection of these values, an image in whose likeness he will re-shape the world and himself. Art gives him that image; it gives him the experience of seeing the full, immediate, concrete reality of his distant goals." (RM p. 38)

A biography of Abraham Lincoln’s life could run six volumes, chronicling every detail, but the characterization of President Lincoln in a Civil War drama will subsume and encapsulate all of that and deliver it to the audience, according to the intent of the artists--the actor, writer, director, and the others in the team. Ultimately, someone has artistic control of the final product and it is that person’s vision of life that we receive.

Petty Thief to Petty Officer
Zoe McLellan played
PO1 Jennifer Coates

In this case, the controlling artist was the executive producer, Donald P. Bellisario. A Marine Corps sergeant, Bellisario also created the original Magnum, P.I., Airwolf, and Quantum Leap. That last reveals the most about Bellasario’s view of your place in the universe. Is history inevitable? To what extent can you make your own life? In JAG, there is no doubt that we all make choices and accept responsibility for those decisions. Sometimes, the characters are in circumstances that are very constrained, but “I had no choice” is met with “You always have a choice.”

(I perceived a hidden undercurrent from Quantum Leap in the re-enactment episodes. The story is carried forward by the same actors, though in costume. Season 5 Number 11 “Ghosts of Christmas Past,” take place in the Viet Nam war. Season 6 Episode 23 “Mutiny” is a re-creation of the Somers Mutiny. Season 9 Episode 14 “Each of Us Angels” is set in World War II. Season 9 Episode 18, “What if?” offered alternate stories launched when they read fortune cookies at a restaurant. In the world of Donald P. Bellisario, you always have a choice. Tangentially, I followed the historical clues offered in Mutiny. Read here. )

Our viewpoint characters,
the normal couple.
Beset by life's hard losses,
they never lose their moral compass,
and so they persevere and thrive.

Of course, the show suffered from errors of fact and the fan base responded. You can read other foible finding on the  TVtropes.org wiki. Nonetheless, I benefited from keeping a handbook of military justice at the couch, just to help with the details. It is not the purpose of fiction to be didactic, but it is important not to make up everything, otherwise you are not even creating science fiction but are selling fantasy.

We bought most of the DVDs, borrowing a couple of seasons from the local library. We have not watched broadcast (cable) television since 2010 and we were never big consumers before that. But people recommend shows and we read about them. In this case, JAG was a back-filling of our NCIS collection. (NCIS was piloted in Season 8 of JAG.) We discovered NCIS sometime after 2006. We picked up Season 1 of The West Wing at a neighborhood Blockbuster just as that series was concluding. We eventually viewed Mark Harmon's portrayal of Secret Service Agent Simon Donovan and found it positive and realistic. That led us to NCIS. 

Just for contrast here, we did once watch most of an episode of CSI but could not tolerate more. In fact, we withstood two seasons of torture with 24, so we think we’re tough. As for politics, I did view half an episode of The Veep (reviewed here ) but I would rather clean the latrines after drill. 

PREVIOUSLY ON NECESSARY FACTS

Romantic Realism 

Ayn Rand and Star Trek 

The Art of Finance

Objectified 

Art and Copy