January 11, 2000 – My congressman got a reply from the Treasury Department, sort of. Here is what was sent to The Honorable John E. Sununu by Linda Robertson, Assistant Secretary, Legislative Affairs and Public Liaison.
Dear Mr. Sununu:
Thank you for your letter of December 1 concerning the inquiry from Mr. James Turk. We are working on this matter and will send a reply to your office as soon as possible.
Sincerely, Linda L. Robertson
Interesting response. They are working on this matter? Her comment could be interpreted a number of ways, but I will resist the temptation to do so. Let’s wait to see what she comes back with “as soon as possible”.
In the meantime, I have received plenty of email. Most of these had comments or suggestions. One of these suggested that I try to make the audit of Ft. Knox an issue in the debates leading up to the New Hampshire presidential primary taking place in about three weeks.
In fact, I did contact the Union Leader, the conservative newspaper in Manchester, which is New Hampshire’s largest city. I provided them with a lot of material. I thought that this topic about the Ft. Knox Gold might at least spice up what is otherwise a boring race with boring candidates. Unfortunately, they have yet to respond. I guess that was to be expected.
I have gone through all the email questions, and there were some that I thought would be of general interest. Many of the questions were on the same topic, so some of the questions below are an amalgamation of similar points.
Q. A gentlemen in the late 1970’s named Dr. Peter Beter also alleged that the gold in Ft. Knox was missing, although some of his other allegations seem a little far-fetched now. Do you know about Dr. Beter?
I am familiar with Dr. Peter Beter’s allegations. It is interesting that you say some of Beter’s “other allegations seem a little far-fetched now”. I never found Beter’s statements to be credible like those of Ed Durrell. Some claimed at the time that Beter was a government/CIA operative who attempted to undermine Durrell’s efforts by adding an element of farce to the accusations about whether or not the Gold was in Ft. Knox.
Even his name – Dr. Peter Beter – is somewhat farcical. The thinking I heard was that if Beter and his claims could be made to appear farfetched, then Durrell would be put into the same category, regardless how much more seriously and studiously Durrell addressed the matter. Therefore, I would take anything you read or hear about Beter with a grain of salt.
Q. Dr. Beter frequently referred to himself as an associate of Ed Durrell? Weren’t they working together?
As far as I am aware it was only Beter who considered himself to be an associate of Durrell, not the other way around. My view on this matter is that Beter was using the term “associate” loosely with a lot of poetic license.
Remember that Durrell was already making waves long before Beter ever entered the scene, adding credence to the theory that Beter was sent to discredit Durrell. And the closer that Beter could make his efforts to seemingly be part of Durrell’s (i.e., by calling himself an associate), then the easier it would be to discredit Durrell.
Q. Doesn’t the Federal Reserve own the US Gold Reserve?
The whole question of the ownership of the US Gold Reserves and whether they belong to the Federal Reserve or to the Treasury is an area that is not clear.
Regarding this issue, if we take balance sheets at face value, then the Gold is owned by the Treasury, which also stores nearly all of the Gold (some is actually stored in the Federal Reserve for the account of the Treasury). The Federal Reserve, however, owns US Treasury Gold Certificates. These are paper certificates (IOU’s really) that used to circulate as currency until 1933 when FDR confiscated Gold from US citizens. The certificates state that the Treasury owes the weight of Gold stipulated thereon to whoever is holding the certificate.
Further, these Gold Certificates obligate the Treasury to pay the weight of Gold noted on the paper on demand to whoever presents the Gold Certificate. Therefore, the Federal Reserve is owed the US Gold Reserve by the Treasury because the Federal Reserve holds the Gold Certificates.
It would therefore appear that the Federal Reserve could present these Gold Certificates to the Treasury and demand the 262 million ounces of Gold comprising the US Gold Reserve. I must admit though that I have read a lot of different interpretations on this issue of ownership.
Q. Is there a law that requires an annual physical inventory of the nation’s Gold reserves?
I don’t know for certain whether there is a law. I have searched Article 30 of the Code of Federal Regulations (the section that deals with the Treasury Department), and I couldn’t find anything. But regardless whether there is a law or not, common sense says a periodic audit should be completed.
In any case, there are enough suspicions floating around that an audit would be a good idea just to clear the air. Nor is there any reason to think that an audit would be impracticable or unduly difficult. And if the Gold is there, why is there any objection to having a proper audit to prove it?
Q. Our federal government believes that it is above the law. Do you really expect to receive an answer from the Treasury?
I agree that the federal government frequently acts and talks as if it is above the law. But regardless of this issue, the feds have to at least give the pretense that they are law abiding and concerned about the best interests of Americans, rather than themselves and the special interests to whom they cater.
Therefore, I’m sure that my congressman will eventually get an answer, but it will probably be a non-answer. In other words, the Treasury willrespond but say nothing meaningful. Or they may try to pick apart my questions, for example, by saying that not every federal government asset is audited yearly. In this way, they will attempt to discredit my inquiry, thereby trying to deflect attention away from the issue I raised in my letter.
Q. Didn’t some congressmen and other government officials years ago visit Ft. Know in order to verify that the Gold Reserve was still there?
Because of the growing public comment at the time (circa 1975), several people were invited by the Treasury to have a visual inspection of the vault in Ft. Knox, including as I recall at least one congressman. I refer to this visual inspection in my letter to Mr. Summers. But a visual inspection is not an audit.
If the Gold is in Ft. Knox, there are some 655,000 bars (400 oz. each) in the US Gold Reserve. I doubt if anyone on that visual inspection was counting. Also, reports at the time said this group was only allowed access into a couple of chambers (there are several vaults within Ft. Knox), and were not permitted to see the entire facility.
Q. Why should an audit cost “millions”?
I used the word “millions” as an extreme case. Even if it were to cost a few million though, the money would be well spent, particularly because it would enable the Treasury to put all of the rumors to rest. It seems logical that the Treasury should be willing to bend over backwards (even spend millions if necessary) to stop once and for all the rumors about the Gold supposedly missing from Ft. Knox. So why don’t they get an audit?
Q. Surely the auditors don’t have to assay (as you suggested) every bar?
I only suggested that the auditors would assay bars selected at random, not every bar. The number of bars selected for assay would be determined by the auditors, based on normal procedures and their confidence of the bars from physically counting and weighing them, as well as their examination of the brand and the brand bar-number on the bar.
The Treasury says that it has about 262 million ounces, about 8,150 tonnes at 32,150 ounces per tonne. The standard good delivery bar weighs 400 ounces. So there would be about 655,000 bars, but not all of these are stored in Ft. Knox. The Treasury reports that only 56% of the Gold is stored in Ft. Knox, with the balance in other depositories. For a detailed list of the depositories, see
Q. I have heard this theory of the sale of the US gold stockpile a number of times since the 1970s, but I have wondered why there wouldn’t be more leaks about it if it were true?
I think this can be explained by saying that most people involved in moving the Gold did not realize what was going on. In 1960, the US Gold Reserve was 700 million ounces. Some 400 million ounces were legitimately removed and sent primarily to West Germany and France because they exchanged Dollars for Gold at the $35 rate then in place. Thus, it would be relatively easy to take more Gold (another 200 million ounces or so) out of Ft. Knox because there already was a massive operation underway to meet the legitimate requests for redemption. In other words, the truck drivers and everyone else on up thought they were acting for legitimate purposes.
Q. There must have been quite a few people involved in such a project, including the drivers of the “hundreds of Army trucks” carrying the gold. Have there been no anonymous leaks to the media or to well known “gold bugs” such as yourself over the past thirty years from sources in either the US or Britain?
See my comments to the question above. My view is that the underlings thought they were acting for legitimate purposes because Gold was leaving Ft. Knox at the time because West Germany and France were redeeming Dollars for Gold. I know of no anonymous leaks to the media, but even if there were, I don’t think they would have been printed. Recall my point about the dismissal of Gordon Tether from his post at the Financial Times of London after he published Durrell’s allegations.