United States Bullion Depository
From Wikipedia, the free encyclopedia
The United States Bullion Depository is a fortified vault building located near Fort Knox, Kentucky which is used to store a large portion of United States gold metal holdings, as well as from time to time, other precious items belonging to, or entrusted to, the United States of America.
The United States Bullion Depository holds approximately 4,570 tons of gold bullion. This is exceeded in the United States only by the Federal Reserve Bank of New York's underground vault in Manhattan, which holds approximately 5,000 tons of gold in trust for many foreign nations, central banks and official international organizations.
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[edit] Context
Prior to the election of Franklin D. Roosevelt in 1932, gold coins had circulated freely in the United States as legal money, and gold bullion was owned by banks and other private entities. In early 1933, as part of the New Deal, the U.S. Congress enacted a package of laws which removed gold from circulation as money, and which made private ownership of gold in the U.S. (except for coins in collections or jewelry such as wedding rings) illegal. All gold coin in circulation was collected by the government and traded for other forms of money. Owners of gold bullion in the U.S. were also required to trade it for other forms of money. All of this left the government of the United States with a large amount of gold metal, and no place to store it.
[edit] History
In 1936 the U.S. Treasury Department began construction of the United States Bullion Depository at Fort Knox, Kentucky on land deeded from the military. The site is located on what is now Bullion Blvd. at the intersection of Gold Vault Rd. The 'Gold Vault' was completed in December 1936 at a cost of $560,000.
The first gold shipments were made from January to July 1937. The majority of the United States' gold reserves were gradually shipped to the site, including old bullion and more newly made bars made from melted gold coins. Some intact coins were stored, as well. The transfer needed 500 rail cars and was sent by registered mail, protected by the Postal Inspection Service.
During World War II the depository also held the reserves of a number of European countries as well as one of four known copies (exemplifications) of Magna Carta (which had been sent for display at the 1939 New York World Fair and when war broke out, was caught in America for the duration), and other key documents from Western history. It also held the original Declaration of Independence and Constitution during the war.
[edit] Construction and security
Below the fortress-like visible structure lies the gold vault, which is lined with granite walls and is protected by a primary blast-proof door that weighs 24.6 tons (22.3 tonnes). No single individual is entrusted with the combination to the vault. Various members of the Depository staff must dial separate combinations known only by them. Beyond the main vault door, numerous smaller internal "cells" provide further protection. The facility itself is ringed with several fences (perhaps electrified) and is under constant armed guard by officers of the United States Mint Police, who are authorized to employ deadly force. The Depository premises are part of the campus of Fort Knox, a United States Army post, allowing the Army to provide additional protection. In sum, the Depository is protected by numerous layers of physical secuity (fences, walls, doors), alarms, video cameras, armed guards, and thousands of nearby soldiers and their weapons (including tanks and helicopter gunships). Because of these measures of security, it is nearly impossible for the Depository's defenses to be breached and the vault's contents to be stolen, especially given the time and equipment it would take to remove even a fraction of the thousands of tons of material stored within the Depository.
[edit] Gold and coin holdings
Gold holdings peaked during World War II at 649.6 million troy ounces (20,205 metric tons or enough to make 100 pure gold Statues of Liberty). Current holdings are around 147 million ounces (4,570 t) in around 368,000 standard 400 troy ounce (12.4 kg or 27.4 lb avoirdupois) gold bars. The depository also holds monetary gold coins.
It also holds several specimens of Sacagawea Dollar coins made out of 22kt (91.6% pure) gold from blanks that are used to strike the $25 half-ounce American Gold Eagle bullion pieces made for an unknown project. The 1933 Double Eagle was also a temporary resident after transfer from 7 WTC before its sale in July 2002 for $7.59 million. Sometime in 2004, 10 stolen 1933 Double Eagle examples recovered from the heirs of Israel Switt were transported to Fort Knox for safekeeping.
Not all the gold bars held in the depository are of exactly the same composition. The mint gold bars are nearly pure gold. Bars made from melted gold coins, however, called "coin bars," are the same composition as the original coins. Unlike .999 fine gold coins minted for holding-purposes today, the coin alloy for pre-1932 coins, which were intended for circulation, was a much tougher and wear-resistant 22 karat alloy (this alloy is actually still used by law in modern U.S. American Gold Eagle bullion coins). The 22 karat coin bars are therefore only 22/24 = .9167 fine, or 91.67% gold.
[edit] Comparison to other countries' gold stores
The United States ranks approximately sixth or seventh in the world, with India far ahead of everyone else with an estimated 14,000 to 40,000 tons of 22kt to 24kt gold jewelry distributed amongst 1.3+ billion people. The United States by far holds the most gold bullion, with over 2.37 times that of the next leading country. (Germany)
[edit] In popular culture
As a symbol of an impregnable vault, the bullion depository has become a semi-common phrase (at least in North America) used when one describes how well protected an object or location is. The item is said to be "locked up tighter than Fort Knox."
The popular 1959 Ian Fleming-written James Bond novel Goldfinger, and the 1964 movie of the same name, are about a criminal plot to break in to the U.S. Bullion Depository at Fort Knox. In the book, Auric Goldfinger's plan is to steal the gold. In the movie, it is to render the gold contained in the Depository radioactive and useless, driving up the price of the gold Goldfinger already has.
The security around the Depository has in part led to a popular and recurring conspiracy theory, as alleged by Edward Durrell, Tom Valentine and others, that claims that the Vault is mostly empty, with most of the gold in Fort Knox removed to London in the late 1960s by Lyndon Johnson. [1] [2] [3] In response, on September 23, 1974, Senator Walter Huddleston of Kentucky, twelve congressmen, and about one hundred members of the news media toured the Vault and opened various cells and doors, each filled with gold. Radio reporter Bill Evans, when asked if it seemed like the gold might have been moved in just for the visit, replied that "all I can say is that I saw gold there" and that it seemed like it was always there.[4] Additionally, audits of the gold by the General Accounting Office (in cooperation with the United States Mint and the United States Customs Service in 1974 and the Treasury Department) from 1975-81 found no discrepancies between the reported and actual amounts of gold at the Depository. [5]. Approximately ten percent of the bullion is audited annually to ensure the amount and purity matches official records. The theory continues to persist, however.
[edit] Trivia
- All of the 4570 metric tons (4,570,000 kg) of gold in the depository, if pure, could form a cube 6 m (less than 20 ft) on a side. Such a cube would be difficult to support but not impossible, as the floor loading (12.5 ton/ft2) for it is exceeded by the footprint loading of many of the tallest skyscrapers.
- The depository holds about 3% of the total gold ever mined in the world, which is estimated at 145,000 metric tons (equal to a cube 20 m on a side).
[edit] See also
- Federal Reserve
- Federal Reserve Bank of New York
- List of attractions and events in Louisville
- Official gold reserves
