[Editor’s Note: In 2011, Congressman Ron Paul sponsored legislation to audit the gold reserves of the United States and publish the results of that audit for public scrutiny. Thanks to opposition from the usual opponents of transparency and decent monetary policy in both parties, the bill was never passed. Below is the text of Congressman Paul’s opening statement on the legislation at the House Subcommittee on Domestic Monetary Policy and Technology. Paul was chairman of the committee. Paul notes that, at the time, the US gold reserves had not been audited in any form in 25 years. That was 2011, and no audit has been conducted since then meaning it has now been nearly 40 years since there has been even a partial audit of the gold reserves. Read the full record of the committee hearing.]
INVESTIGATING THE GOLD: H.R. 1495, THE GOLD RESERVE TRANSPARENCY ACT OF 2011 AND THE OVERSIGHT OF UNITED STATES GOLD HOLDINGS
Thursday, June 23, 2011
U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON DOMESTIC MONETARY POLICY AND TECHNOLOGY, COMMITTEE ON FINANCIAL SERVICES, Washington, D.C
The subcommittee met, pursuant to notice, at 9:31 a.m., in room 2128, Rayburn House Office Building, Hon. Ron Paul [chairman of the subcommittee] presiding.
Members present: Representatives Paul, Jones, Luetkemeyer, Huizenga, Schweikert; Clay, Maloney, and Green.
Chairman PAUL. This hearing will come to order. Without objection, all members’ opening statements will be made a part of the record.
I will start with my opening statement and proceed to anybody else who is anxious to do the same.
For far too long, the United States Government has been less than transparent in releasing information relating to its gold holdings. Not surprisingly, this secrecy has given rise to a number of theories about the gold at Fort Knox and other depositories.
Some people speculate that the gold has been involved in gold swaps with foreign governments or bullion banks. Others believe that the gold has been secretly shipped out of Fort Knox and sold. And, still others believe that the bars at Fort Knox are actually gold-plated tungsten.
Historically, the Treasury and the Mint have dismissed these theories rather than addressing these concerns with substantive rebuttals. No one from Congress has been allowed to view the gold at Fort Knox in nearly 40 years. Recent photographs of gold holdings seem to be hard to come by. And the Mint and the Inspector General’s audit statements contain only the bare minimum of information.
Because the Government has for so long refused to provide substantive information on its gold holdings, it is not surprising that so much confusion abounds, both within and without the Government.
The difference between custody and ownership, questions about the responsibility for U.S. gold held at the New York Fed, and that issue of which division at Treasury is ultimately responsible for the gold reserves are just some of the questions that have come up during the research for this hearing. In a way, it seems as though someone decided to lock up the gold, put the key in a desk somewhere, and walk off without telling anyone anything.
Only during the preparation for this hearing was my office informed that the Mint has in fact conducted assays of statistically representative samples of gold bars, and we were provided with a sample assay report.
This type of information should be reported, or at least tabulated and published, so that the public knows exactly how many bars of gold exist, what their fineness is, and whether they are encumbered in any way through loans or swaps.
While the various agencies concerned have been very accommodating to my staff in attempting to shed some light on this issue, it should not require the introduction of legislation or a congressional hearing to gain access to this information. This information should be published and available to the American people.
This gold belongs to the people, especially since much of it was forcibly taken from them in the 1930s, and the Government owes it to the people to provide them with the details of these holdings.
We would greatly benefit from a full, accurate inventory audit and assay with detailed explanations of who owns the gold and who is responsible for ownership, custody, and auditing.
While the Mint and the Inspector General trust the accuracy of the audits performed between 1975 and 1986, this still means that at least two-thirds of the gold reserves were last audited over a quarter century ago. Surely, a full audit every 25 years is not too much to ask.
I look forward to the testimony of the witnesses regarding the conditions of the gold reserves, the accounting audits that are regularly performed, and the inventories and assays that have been conducted on some of this gold over the years.
I am also very interested to hear the comments on the Gold Reserve Transparency Act, so that we may put forward a measure that provides the public with accurate and complete information on their gold.
