US Coins

Treasury secretary pays visit to Fort Knox gold

Steven Mnuchin’s Aug. 21 visit to the gold vaults of the Fort Knox Gold Bullion Depository in Kentucky was the first by a Treasury secretary in 69 years. It had been more than four decades since a senior Treasury Department official inspected the bulk of the nation’s gold reserves.

U.S. Mint Director Mary Brooks led a contingent of congressional representatives and journalists on Sept. 23, 1974, to take inventory of the nation’s gold reserves amid concerns some of the gold may be missing.

A subsequent audit accounted for all of the gold, with none recorded missing.

Mnuchin tweeted a message from his Twitter account, “Thanks to @usmintstaff for hosting at#FortKnox#USBD. First@USTreasury Secretary to visit since John Snyder in 1948. Glad gold is safe!”

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Mnuchin was accompanied on his Aug. 21, 2017, inspection tour of the gold reserves at Fort Knox by Senate Majority Leader Mitch McConnell, R-Ky.; U.S. Rep. Brett Guthrie, R-Ky.; and Kentucky’s Republican governor, Matt Bevin.

During Mnuchin’s visit, McConnell is reported to have held up one of the 27-pound gold bars that is among the more than 147 million troy ounces of gold held at Fort Knox.

The bars are made of .900 fine gold, fabricated predominantly from melted U.S. gold coins.

While Mnuchin declared the nation’s gold reserves at Fort Knox secure, Treasury Department officials gave no indication whether any full-scale audit would be conducted, as was done in 1974 after the visit by Brooks and her contingent.

The Fort Knox Gold Bullion Depository’s security and operation is overseen by the U.S. Mint, a Treasury Department bureau.

The Treasury Department’s Bureau of the Fiscal Service, in its most current report, dated June 30, 2017, indicates the “deep storage” gold at Fort Knox at 147,341,858.382 troy ounces.

The gold is carried on government ledgers at the statutory price of $42.2222 per troy ounce established in 1973, which does not fluctuate. At that price, the government’s book value of the gold is $6,221,097,412.98.

The market value of the gold reserves, using the London PM closing spot price on Aug. 21 of $1,292.90, would be $190,498,288,702.

When Brooks and the congressional delegation and journalists toured the Fort Knox vaults in 1974 it was the first time anyone other than authorized personnel was permitted entry.

The bullion depository was created by President Franklin D. Roosevelt in 1936. In 1933, Roosevelt’s Executive Order 6102 had outlawed the private ownership of gold coins, gold bullion, and gold certificates by American citizens, forcing citizens to sell their gold holdings to the Federal Reserve.

The bullion depository was needed because the nation’s gold reserves tripled and storage space was insufficient. When FDR inspected the vaults on April 28, 1943, it was “the one and only time a gold vault was opened by inspection for anyone other than authorized personnel,” Brooks said.

Her 1974 inspection tour was the first time photography was permitted inside the vault area.

According to the Annual report of the Director of the Mint for the Fiscal Year Ended June 30, 1975, there were 147,353,827.327 troy ounces of gold stored in 13 vault compartments at Fort Knox as of June 30, 1974.

Each of the vault compartments was secured with joint seals that, once broken, could not be reused, but had to be replaced. 

Documentation was required to detail the reasons for the seals being broken and it was required to be signed by senior officials involved.

A special settlement audit was initiated on Sept. 24, 1974, the day after Brooks’ visit, with the audit conducted by a team of auditors from the U.S. General Accounting Office and the Department of the Treasury.

A report released Feb. 10, 1975, by the Office of the Comptroller General indicated the total amount of gold documented as being in the Fort Knox vault as of June 30, 1974, was still there.

The audit also included inspection and documentation of gold held at the Philadelphia and Denver Mints, the New York Assay Office and San Francisco Assay Office, now the San Francisco Mint.

One of the recommendations from the 1974–1975 study was for the director of the Mint to require a cyclical inventory of each depository’s gold holdings as part of each facility’s annual settlement of accounts.

The congressional contingent that inspected the Fort Knox gold inventory on Sept. 23, 1974, was led by U.S. Rep. Philip Crane, R-Ill.

Crane initiated the inspection following a discussion with Treasury Secretary William F. Simon concerning rumors that some or all of the gold reserves at Fort Knox was missing.

Coverage in the Oct. 9, 1974, issue of Coin World, in a report by then Coin World editor Margo Russell — who was present when a vault was opened for inspection — indicated Crane was satisfied the gold was still there even before the public inspection was commenced.

The vault compartment that was opened in 1974 contained 36,236 gold bars weighing 11,837,837.179 troy ounces, according to Russell’s 1974 Coin World news coverage.

Prior to the 1974 visit, the last shipment of gold out of Fort Knox was in 1971 when $500 million in precious metal was delivered to the New York Assay Office.

That shipment required 33 15-ton trailers to haul the precious cargo.   

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